Ethereum, the second most capitalized cryptocurrency, showed the most significant growth since the beginning of April
Our experts, believe the rise of the second cryptocurrency is due to the market's wait for the US Securities and Exchange Commission (SEC) to approve spot exchange traded funds (ETF) on Ethereum.
According to unconfirmed reports, Ethereum ETF issuers held a meeting with SEC officials. This information comes from the co-founder of hedge fund Parataxis Capital. And which specializes in digital assets, Edward Chin and has not yet received official confirmation.
Following the debut of a group of bitcoin spot ETFs in the U.S., several management companies, including BlackRock, Fidelity. And Ark Invest, have filed applications with the SEC to create spot ETFs on Ethereum. The regulator could approve such funds as early as May this year. And according to estimates from S&P Global and ETF market analysts at Bloomberg.
Analysts at brokerage Bernstein published a report estimating the probability of Ethereum-ETF approval before May at approximately 50%.
However, on March 20, the SEC postponed the deadlines for reviewing ETF launch applications from asset managers Ark 21 Shares. And Hashdex to May 24 and May 30, respectively. And after that, Bloomberg analyst James Seyffarth said the chances of an Ethereum-based exchange-traded fund being approved in May have diminished significantly.
According to Jeffrey Kendrick, head of currency and digital assets research at Standard Chartered, the price of ETH could rise to $4k on expectations of Ethereum-based spot exchange-traded funds (ETFs) approval.
While bitcoin is recognized as a commodity in the U.S., the Ethereum cryptocurrency wants to be recognized as a security.
In March, the SEC launched an investigation into ETH. And demanded documents from the Ethhereum Foundation, a non-profit organization associated with the cryptocurrency.
The reason for the investigation was the transition of the Ethereum blockchain to a staking mechanism instead of mining. Many of the crypto-assets, the issuance of which is carried out by staking (proof-of-stake algorithm), have already been equated to unregistered securities in June 2023 in lawsuits against major crypto exchanges. $ETH