This is the latest phase of a two-step process. In May, the SEC approved 19b-4 filings from several stock exchanges that requested rule changes to allow the listing of these instruments. Now ether ETFs have the green light to list, more than seven months after spot Bitcoin ETFs were launched.
Market impact
The approval of ether ETFs has already been largely priced in by the market, according to Michael Anderson, co-founder of crypto venture capital firm Framework Ventures. Ether is trading at $3,516.10 on Tuesday, climbing 0.5% ahead of the start of trading on Wall Street.
Once ETFs are launched, their flows could have a significant impact on the token price, Anderson added. However, the consensus is that these instruments will see much less inflow than their Bitcoin counterparts.
While BTC spot ETFs saw inflows of $13.8 billion in the first 100 days of trading, Ether is expected to see between $4.8 billion and $6.4 billion over the same period, according to analysts at cryptocurrency trading firm Wintermute.
Ether Market Cap
This could be partly due to the lower market capitalization of the second-largest cryptocurrency, which was around $417 billion on Monday, roughly a third of Bitcoin’s market cap of $1.3 trillion, according to data from CoinMarketCap.
Investor Reactions
Meanwhile, the feeling in the market is that some wealth managers and advisors who allocated capital to the crypto space when Bitcoin ETFs were launched in January, They didn’t assume they were going to get an ethereum ETF so soon.
These investors may have already reached the limit of what they would like to allocate to the crypto market, which could temper some of the initial enthusiasm for the Ether ETF. These investors are also unlikely to sell some BTC ETFs to buy Ethereum ones, as they would want to avoid the short-term capital gains tax, which is based on profits from the sale of an asset held for a year or less.
List of Ether ETFs
Many e+Ether spot ETFs will begin trading on Tuesday, after receiving final approval from the SEC. It should be noted that Ether (ETH) is the underlying cryptocurrency of the Ethereum network, the second-largest crypto network measured by market capitalization. As of Tuesday morning, the following ether spot ETFs had effective prospectuses, which means that the SEC had authorized them to trade:
- 21Shares Core Ethereum ETF (CETH)
- Bitwise Ethereum ETF (ETHW)
- Fidelity Ethereum Fund (FETH)
- Franklin Ethereum Trust (EZET)
- Invesco Galaxy Ethereum ETF (QETH)
- iShares Ethereum Trust ETF (ETHA)
- VanEck Ethereum ETF (ETHV)
- Grayscale Ethereum Trust (ETHE)
- Grayscale Ethereum Mini Trust (ETH)
Optimism and exexpectations in the market
Bitcoin spot ETFs that began trading in January have boosted demand for Bitcoin (BTC) and were partially responsible for driving BTC to all-time highs in March, so the question arises as to whether the same will happen with Ether.
Iñaki Apezteguia, Co-founder of Crossing Capital, analyzes in statements to Ambit that, “There are nine funds that have applications that will be able to generate the activation of spot ETFs.” With this, “The expectation regarding this is high“. Although he warns that since it was announced on Monday night, “the price of Ethereum has risen slightly, standing above $3,500.”
Apezteguia analyzes that if this is compared to what happened with Bitcoin when spot ETFs were approved in January, in the first week, “the price of Bitcoin fell between 5% and 8%, and then, after two months, reached its maximum price of $74,000.”
“So you could say that Ethereum could follow a similar path.“. The important thing, the analyst recalls, is that Bitcoin never returned to the initial price at which the spot ETFs were launched, which was close to $45,000. Therefore, if the Ethereum spot ETFs are launched now, we could think that $3,500 would be a strong floor that Ethereum would not touch again, in case of repeating Bitcoin’s path a bit. “This could fuel the search for the maximum price of Ethereum in the coming months, triggering an altseason or a bull market..
For analysts, spot Ether ETFs are expected to see between 20% and 25% of the flows that spot Bitcoin ETFs saw in their first few months of existence, Bloomberg Intelligence analyst James Seyffart previously said in a press note, echoing Apezteguia.
The political context in the US: a driver for the next bull market
Adrian SirioCEO of Ettios.io, explains to this medium that the evolution of Donald Trump towards a pro-crypto stance has generated a huge impact on the market, generating debate and speculation around the implications of its support for Bitcoin and cryptocurrencies.
His change of heart, marked by his declaration that Bitcoin is one of the greatest technological innovations and his emphasis on US leadership in the crypto space versus China’s influence, creates a new dynamic in the market, Sirio says.The announcement of its possible desire to turn Bitcoin into a strategic reserve asset for the United States during the upcoming Bitcoin 2024 conference in Nashville has fueled speculation about the potential economic and financial impact of this vision.
“This, in turn, could set the stage for widespread growth and potentially trigger the next bull market in the crypto space,” he adds Appezteguia to the words of Sirius.
For Sirio, the vision of a Trump presidency A more crypto-friendly country could bring greater confidence in the crypto market and potentially boost diverse projects.
Therefore, it is likely that projects that focus on innovation and technological development, as well as those with a clear orientation towards sustainability and financial security“get a nice rally in this scenario.” Trump’s foray into the world of cryptocurrencies and his plans to dive deeper into this space appear to have the potential to change the global financial landscape, he concludes.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
