Bitcoin and Ethereum Dropped Despite US Approval: Here's Why!

Although the US has approved spot Ethereum ETFs, the cryptocurrency market has not met expectations for now.

The approval of key regulatory documents for the listing of Ether-based exchange-traded funds (ETFs) in the US has created a great deal of excitement in the cryptocurrency market.

However, despite this positive development, the prices of Bitcoin and Ethereum have fallen in the last 24 hours. In particular, it was noteworthy that Ether experienced a 4% decrease after approval. While this decline was described as typical behavior of speculators, there was an increase in the number of those who interpreted it as "buy the expectation, sell the news".

Making a statement on the subject, FxPro's senior market analyst Alex Kuptsikevich noted that it would not be surprising if the Ethereum price dropped to $ 3,000:

We should not be surprised if the price retreats back to the 3000$ area and turns into a significant consolidation area. At these levels, large institutional investors can start to create positions in ETFs. We saw the same following the approval of the Bitcoin ETF in January; The Bitcoin ETF dropped 19% in price before a spectacular comeback over the next two weeks.

First of all, the analyst stated that this approval of the SEC only covers the 19b-4 filings, and the fact that the S-1 filing approvals have not yet arrived was cited as a reason for the market to remain calm.

On the other hand, if the Ethereum ETF process goes smoothly, a large cash flow is expected in the medium term.

If Ether ETFs become available for trading, significant institutional capital inflows are expected. Notably, Standard Chartered projects an inflow of $45 billion in the first 12 months.