Ethereum spot ETF was launched on 7/23, but Ethereum did not rise but fell.
In the early morning of July 23, Taiwan time, the U.S. Securities and Exchange Commission (SEC) officially approved the S-1 documents of multiple Ethereum spot ETFs. You can see BlackRock and Fidelity as soon as tonight. Waiting for seven products to be launched.
Since the Ethereum spot ETF was approved just the day after Biden announced his withdrawal from the election, some analysts linked this to political factors. For example, eToro analyst Josh Gilbert believed that it was a "victory for crypto assets." The higher Trump's winning rate, The better for crypto assets.
However, after the news of the Ethereum spot ETF’s approval for listing settled, the price of Ethereum ($ETH) did not rise but fell, falling from around $3,500 to as low as $3,422, and as of this morning’s writing, it was back to $3,489 .
Source: Google Finance data
Ethereum ($ETH) fell instead of rising after the news that the Ethereum ETF was about to be listed.
Why did Ethereum fall instead of rising? Experts reveal 4 major reasons
The good news that the Ethereum spot ETF is about to be listed has not yet driven Ethereum to continue to rise. In addition to the possible situation of "buying when rumors come out, selling when facts come out (Sell The News)", the three crypto institutions also benefited from derivatives, The volatility perspective shares the reasons for not being bullish.
1. Ethereum spot ETF expected low capital inflows
Cryptocurrency market maker Wintermute predicts that the Ethereum spot ETF will attract up to US$4 billion in capital inflows, far lower than the US$4.5 billion to US$6.5 billion predicted by most analysts. The Bitcoin spot ETF has attracted US$17 billion in funds since its listing. inflow.
2. There is no pledge service for Ethereum spot ETF
Wintermute also pointed out that because the U.S. SEC does not allow Ethereum spot ETFs to provide pledge services, it loses competitiveness compared with Ethereum spot, because investors who directly hold it can participate in pledges and obtain income.
3. Ethereum’s implied volatility rises sharply
Cryptocurrency research firm Kaiko noted that Ethereum’s implied volatility rose sharply over the weekend, jumping from 59% to 67% for contracts approaching expiration (July 26). This represents a weakening of the market’s confidence in Ethereum, with traders willing to pay a higher premium to hedge their bets.
4. Ethereum futures demand is sluggish
Greg Magadini, director of derivatives at blockchain data provider Amberdata, pointed out that before the news came out, the market demand for Ethereum futures was sluggish, contrary to the previous situation where the Bitcoin spot ETF was about to be listed. Therefore, the performance of the Ethereum spot ETF may make People are disappointed.
Counter View: Grayscale Mini Ethereum Trust Could Help Gains
However, Billy Luedtke, CEO of Ethereum authentication protocol Intuition, expressed the opposite opinion. He believes Grayscale’s Mini Ethereum Trust ETF could help drive up the price of ether. More inflows are expected as the product offers investors tax-free ETF trading options and a more attractive fee structure.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice. The analysts’ views are for reference only. Users should consider whether any opinions, views or conclusions in this article are consistent with their specific circumstances. Invest accordingly and do so at your own risk.
