Analysis: Uncertainty Looms Over Ether's Price Following Launch of Spot ETFs
Summary:
This article discusses predictions about Ether's value following the launch of Ether spot exchange-traded funds (ETFs), with traders expressing uncertainty due to what happened with Bitcoin's value after its own spot ETFs trading began. The article also outlines concerns about Grayscale's potential decision to convert its Ethereum Trust into an ETF, which could lead to selling pressure and impact Ether's price.
Market watchers are uncertain about the prospect of a drop in Ether (ETH) value following the debut of Ether spot exchange-traded funds (ETFs), a trend witnessed with Bitcoin (BTC) after the introduction of Bitcoin spot ETFs. Cryptocurrency trader Matthew Hyland shared his belief on May 24 on X, suggesting a smaller chance of a drop post-ETH ETF as compared to post-BTC ETF. He pointed out that, unlike Ether, Bitcoin didn’t face a price drop in the pre-approval phase of spot Bitcoin ETFs on January 10. Hyland noted that Bitcoin's selling pressure started with the listing of the Grayscale ETF on the next day. Subsequently, following the launch of spot Bitcoin ETFs, Grayscale Bitcoin Trust (GBTC) saw a significant loss of assets amounting to $17.6 billion, according to Farside data.
By May 20, Ether had dropped by 15% over the course of two months. However, after rumors suggested a potential softening in SEC's stance toward ETF approvals, Ether experienced an upsurge of 29% in just three days. As of the moment of publication, Ether is valued at $3,752, per CoinMarketCap data. Year-on-year, Ethereum has increased by 110.44%.
Yet, there are worries about the possible impact of Grayscale deciding to turn its Grayscale Ethereum Trust (ETHE) into an ETF, a move that could cause selling pressure and affect the Ether price. Hyland noted the similarities both Grayscale products share and pointed out that the Grayscale ETF led to selling pressure for Bitcoin. He suspects a similar outcome for the ETH ETF once it's listed.
However, Hyland anticipates a positive future for Ether's price as it hit "local highs" of $4,092 in March this year without the good news of spot Ether ETF approval. This peak was reached shortly before ETF analyst Eric Balchunas lowered his approval expectations for spot Ether ETFs to 25%.
At the same time, Michael van de Poppe, founder of the MN trading consultancy, expressed a similar wait-and-see attitude until Ether spot ETFs actually start trading. He believes that the inflow after the listing will determine whether there's a strong upward continuation.
On May 23, the SEC granted approval for spot Ether ETFs. The market's response to this news has been mild, leaving Sassal, an independent Ethereum instructor, to argue that Ether is significantly undervalued as the market has had only three days to incorporate the ETF approval news into the price.
Published At
5/25/2024 11:38:58 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.