Since the market started to pick up at the end of last year, Ethereum, the second largest cryptocurrency, has always underperformed Bitcoin and Solana in terms of price performance. Even though we may be in the middle of a bull market, ETH players are relatively indifferent.
We all know how Ethereum holders have felt in the past few months, watching other ecosystem users revel and crying alone with their full ETH warehouses. But the upcoming launch of the Ethereum spot ETF may reverse this dilemma!
Will the Ethereum spot ETF be open for trading? How much will it rise after listing? Will it bring the altcoins up with it? These are probably the issues that everyone is concerned about. Let’s analyze them for you.
What is the progress of the Ethereum spot ETF? If it has been approved, why hasn’t it been listed yet?
On May 24 this year, the SEC officially approved the 19b-4 application documents for Ethereum spot ETFs from eight institutions, allowing institutions to list Ethereum spot ETFs on various exchanges in the United States. However, the applicant institutions cannot start trading until they obtain the required S-1 registration statement approval.
Simply put, the Ethereum spot ETF has been approved and its listing is a foregone conclusion, but the entire process has not yet been completed and it is only a matter of time before it is opened for trading.
When can you start buying and selling Ethereum spot ETF: Early July at the earliest, late September at the latest
We may get the latest progress on the Ethereum spot ETF on July 2. According to the revision feedback given by the SEC to various institutions, there may not be many parts that need to be adjusted, so it is possible to get news of approval for listing at any time.
According to the latest statement, the Ethereum spot ETF should complete all preparation procedures and be approved for listing before the end of this "summer". In other words, the Ethereum spot ETF can be traded on the US stock market around September this year at the latest.
Will the Ethereum spot ETF rise after listing: The market is indeed bullish
After the Ethereum spot ETF is listed, it will be equivalent to providing a legal and regulated investment channel for Ethereum. Funds from traditional financial institutions and investors can flow into the market in a way that is considered relatively safe, which may have the opportunity to drive up the price of Ethereum.
On the other hand, with regulatory guarantees, coupled with the liquidity and transparency of ETFs, the market’s trust and visibility in Ethereum will be enhanced. In particular, the characteristics of Ethereum itself and on-chain DeFi, which can obtain additional income through staking, may further attract more investors who are not satisfied with the traditional market.
How high could ETH rise after the Ethereum spot ETF is listed?
Ethereum spot ETFs are expected to see inflows between $3 billion and $4.8 billion in the first five months of listing, showing strong market demand. This estimate is based on ETH AUM's relative global market share of BTC at 28%, and CME's ETH OI compared to BTC's current 23%. Comparing these weights to the cumulative spot BTC ETF inflows of $13.8 billion, ETH net inflows range from $3.1 billion to $4.8 billion.
Research suggests that the newly launched ETF will absorb 750,000 to 1,000,000 ETH, equivalent to 0.65-0.85% of ETH's circulating supply.
Various signs indicate that although Ethereum's growth has been lower than Bitcoin's since the beginning of this year, its performance in the second half of the year has the opportunity to outperform Bitcoin after the spot ETF is opened for trading.
Other potential positives for Ethereum in the future: weakening regulatory pressure and good performance of ETP inflows
SEC concludes investigation into Ethereum
In April this year, Consensys, a blockchain technology company that has been focusing on developing applications and infrastructure in the Ethereum ecosystem for many years, such as MetaMask, Infura and Truffle, filed a lawsuit against the SEC, accusing the SEC of trying to identify Ethereum (ETH) as a security and abusing regulatory power to suppress specific tokens. Consensys believes that Ethereum should be regarded as a commodity rather than a security, which is consistent with the U.S. Commodity Futures Trading Commission (CFTC).
Two months later, after the Ethereum spot ETF was approved, Consensys sent a letter to the SEC asking it to confirm whether the ETF approval was equivalent to positioning Ethereum as a commodity. This request eventually led the SEC to decide to end its investigation into Ethereum. It also led to a rebound in the price of Ethereum tokens.
The inflow of ETH ETP in the market is higher than that of BTC
Despite the recent overall market downturn, the flows of ETH and BTC investment tools are in sharp contrast. Driven by optimistic expectations for the launch of the US Ethereum spot ETF, global ETH ETPs had a net inflow of 16,911 ETH, marking the fourth consecutive week of net inflow. In contrast, BTC ETPs had a net outflow of 12,523 BTC last week, the third largest weekly outflow to date.
In the past 4 weeks, Ethereum spot ETFs in other regions have had a net inflow of 86,472 ETH, equivalent to $300 million. The flow status of ETH ETP is similar to the performance of BTC ETP in November 2023 (before the US BTC ETF spot was passed), with a monthly net inflow of $1.25 billion.
By comparison, it is shown again that under the best circumstances, the inflow of US Ethereum spot ETF is likely to reach about 10 billion US dollars, which is about 25% of the flow scale of US BTC spot ETF.
Therefore, after passing the test, the probability of Ethereum reaching 5,000 is still very high. For those who have spot goods, the vast ocean of stars will be theirs if they can endure this tiring market situation.
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