Ethereum’s momentum in Q1 2024 promised continued growth, supported by historical trends and positive analyst forecasts. However, regulatory uncertainties, particularly surrounding the approval of an Ethereum exchange-traded fund, have posed obstacles to its upward trajectory.
The trend in 2024 was expected to be in the bullish phase that the crypto market had been waiting for since June 2022. Along with the rest of the market, Ethereum was also expected to see an upward trend due to one factor – the recent approval of spot Bitcoin ETFs. As Bitcoin is expected to target its all-time highs in 2024 amidst potential interest from institutional investors, Ethereum is expected to play its role as the “silver to gold” and will likely push other altcoins higher as well.
Asset managers are already watching Ethereum ETFs, and this clearance would set a precedent for them as well. Three other investors have already applied for a spot Ethereum fund: VanEck, ARK Invest, and BlackRock.
However, delays or regulatory hurdles in the process have disrupted the market and created uncertainty. Contributing to the range of speculation are different views from industry professionals. While at the beginning of the year there was a 70% chance of an Ethereum fund being approved in May, there is now a more negative outlook, with the probability dropping to just 25%. The doubts are rooted in the absence of data from the SEC, which points to a bleak outlook for the approval process.
The risk that the SEC poses to ether prices is twofold:
The commission continues to receive ETH tokens classified as securities.
Additionally, regulators may delay approval of an Ethereum fund for Wall Street investors.
This is a big problem because VanEck believes that Ethereum funds could outperform the Bitcoin fund once they are approved.
Meanwhile, the Securities and Exchange Commission is “actively pursuing a legal campaign to classify Ethereum, the second most popular cryptocurrency, as a security,” according to the latest crypto news.
The commission has issued subpoenas to a number of companies to investigate their dealings with the Ethereum Foundation, sparking speculation that the SEC will prosecute acquisitions of Ethereum tokens classified as securities.
Developments related to this possibility represent a continued risk to Ethereum long positions and headwinds for asset prices, leading to less bullish revisions to Ethereum forecasts and price predictions for 2024.
This seems to be one of the driving factors behind the bullish Ethereum forecast for Q2 2024.
#BinanceTurns7 #AirdropGuide #MarketDownturn
