Despite the groundbreaking approval of spot Ether exchange-traded funds (ETF) in the United States, the price of Ether has remained relatively unchanged, which could be attributed to two main factors.
On May 23, the U.S. Securities and Exchange Commission (SEC) gave the green light to eight spot Ether ETFs to be listed on their respective exchanges. Just before the news broke, the price of Ether (ETH) experienced a 3.4% decline, but it quickly recovered by approximately 5% shortly after. As of now, ETH is being traded at $3,806.
Zach Rynes, a prominent crypto commentator, suggests that the lack of significant movement in the price of Ether signifies that “everyone who wanted to buy the approval already did.” Prior to this announcement, Ether had already surged by 29% in the past week due to reports indicating a potential change in the SEC’s stance towards ETF approvals.
Rynes and several others also note that although the ETFs have received approval, they have not yet been cleared for launch. This requires an approved S-1 filing, which entails a comprehensive document containing details about the firm’s financials, risk profile, and the securities they plan to offer. VanEck recently submitted its amended S-1 filing to the SEC, and experts predict that it could take anywhere from weeks to months to obtain the necessary approvals.
According to Rynes, the next major catalyst for the price of Ether will be the inflow of capital once the ETFs start trading. “ETFs haven’t actually launched yet, so net new capital inflow is still to come,” Rynes wrote, and crypto research firm Second Mountain expressed a similar sentiment, stating that a “massive capital inflow” is expected in the first week, potentially reaching billions.
However, some experts caution that the approval of ETFs may not immediately result in an upward trend. When spot Bitcoin ETFs were approved for trading on January 10, the price of Bitcoin experienced a 15% drop. It took 30 days for the price to surge by 30% to $51,870, according to CoinMarketCap data.
Furthermore, concerns linger regarding Grayscale’s announcement to convert its Grayscale Ethereum Trust (ETHE) into a spot Ether ETF, which could lead to significant outflows similar to what happened to Grayscale Bitcoin Trust (GBTC) after spot Bitcoin ETFs received approval in January. A pseudonymous crypto trader named Rho Rider warned of potential outflows, stating that “now it’s $11B+ ETH that’s been trapped for 7 years.”
Since spot Bitcoin ETFs began trading on January 11, GBTC has lost a total of $17.6 billion in assets, according to Farside data.
Despite the current state of affairs, some Ethereum enthusiasts remain optimistic about the future of Ether. Independent Ethereum educator Sassal believes that “ETH is stupidly undervalued,” arguing that the market has only had three days to factor in the ETF approval.
Meanwhile, Bitcoin experienced a slight stumble of 1.2%, dropping to $67,362 following the SEC’s announcement. However, it has since recovered and is currently being traded at $67,706. At the same time, Pepe (PEPE) reached a new all-time high of $0.00001531, representing a 5% increase within an hour of the approval news.
Disclaimer: This article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.