News regarding the approval of Ethereum (ETH) ETFs, which could trigger a new bull run in the cryptocurrency market, with the United States SEC playing a crucial role.
Let’s see all the details below.
The SEC at the center of the wait for spot ETFs on Ethereum (ETH): latest news
As anticipated, Ethereum ETFs are considered a possible spark for a new bull run, but the approval of the US SEC is crucial.
The regulatory authorities, traders, and investors are eagerly awaiting the presentations of the form S-1 for the spot Ethereum ETFs, which are expected to be available by the weekend.
Today, the entities that have applied for ETH ETFs, including BlackRock, 21Shares, Fidelity and Grayscale, will submit the S-1 forms to the SEC after making the requested changes.
The first half of 2024 was dominated by the issue of Spot ETFs on Bitcoin. Now, the attention has shifted to ETFs on Ethereum.
Nate Geraci, co-founder of the ETF Institute, tweeted:
“the amendments to the ETF S-1 of the spot ETF should be made tomorrow… How quickly will the SEC be able to reverse course?”
Geraci emphasizes the importance of commissions, adding that the issuers might be ready to launch the products in the coming weeks.
Bitwise, an asset management company, has recently updated its S-1 registration with the SEC to list and trade shares of ETH ETFs.
The CIO of Bitwise, Matt Hougan, predicts that ETH ETFs will attract at least 15 billion dollars in net flows by 2025. Hougan, in particular, states the following:
“Everyone wants to know how much the exchange-traded product (ETP) of ether spot will attract in terms of net flows. My answer: 15 billion dollars in the first 18 months. It is not a random guess. It is what the data suggests.”
Focus on the price of Ethereum
At the moment, Ether has slightly recovered from last week’s drop, trading at around $3,042. The price has increased by 0.7% in the last 24 hours, but remains 12.2% lower compared to seven days ago.
The recent history of Bitcoin shows how the approval of the Spot BTC ETF led to a 58% surge in just a few months. On January 10, the day of the approval of the Spot ETF on BTC, the price of Bitcoin was $46,105, rising to $73,097 in March.
The approval of the Spot ETF on Ethereum could bring the markets back into the green. Based on historical data, the approval of a Spot ETF on ETH could push the price of Ethereum above $4500, assuming a 50% increase.
In any case, the 1-hour chart of ETH/USD showed a recent bullish trend that started at $2,803, highlighted by a significant bull candle that reached $3,096 before a slight retracement.
A bullish engulfing pattern indicates a possible continuation of this trend, although the recent declines suggest a consolidation phase. The volume analysis reveals a peak during the bullish movement.
However, the decreasing volume during the consolidation suggests that, if the volume were to increase again, the bull trend could resume.
On the 4-hour chart of ETH/USD, Ethereum has confirmed a downward trend recently bouncing from the low of $2,803. A strong increase on July 8 indicates a significant bull movement, potentially suggesting a short-term reversal.
However, the recent candles with small bodies and reduced shadows also highlight a certain degree of uncertainty in the market. The volume analysis supports this bullish movement with higher volume, indicating a genuine buying interest.
The daily chart shows a clear downward trend in the last month, with ETH falling from around $3,889 to a low of $2,803.
Contradictory forecasts: analysts divided on the future of Ethereum ETFs
With the imminent launch of spot exchange-traded funds (ETF) on Ethereum, the financial community is divided on the possible consequences of this debut.
If the Bitcoin ETFs have led to a significant increase in the price of BTC, analysts are not sure that Ethereum will follow the same path.
Ryan Lee, chief analyst at Bitget Research, expressed skepticism regarding the impact of ETFs on Ethereum compared to those on Bitcoin, stating:
“Bitcoin and Ethereum are two assets with different fundamentals and a distinct market appeal. When ETFs on Ethereum start trading, ETH will capture about 2.5% of its market capitalization. If this bull scenario were to materialize, the spot ETF on Ethereum could see $11.55 billion in assets under management.”
On the other hand, Galaxy Research predicts that inflows into Ethereum ETFs will be slower compared to those into Bitcoin.
Charles Yu, vice president of research at Galaxy, has estimated that “Ethereum spot ETPs will see about 5 billion dollars in net inflows in the first five months of trading.”
Despite the moderate expectations of some, other observers are very optimistic about the future of Ethereum post-launch of the ETFs. Steno Research predicts that ETH could reach at least $6,500 by the end of the year, thus surpassing the previous all-time high of ETH by 33%.
Standard Chartered offers an even more bullish forecast. Specifically suggesting that the approval of spot ETFs on Ethereum could lead to up to 45 billion dollars of inflows within the first 12 months. Potentially pushing the price of ETH to $8,000 by the end of 2024.
However, not everyone shares this optimism. Jupiter Zheng, partner of the Liquid Fund of HashKey Capital, predicts a short and modest initial rally followed by a strong “sell-the-news” event.
Event in which investors might sell their positions after the launch of the ETFs, leading to a price correction.