Ether Price Stays Steady Despite U.S. Approval of ETFs: Impact on Hold until Official Launch
Summary:
Despite the recent U.S. approval of eight Spot Ether ETFs, Ether's (ETH) price has remained relatively stagnant, leading cryptocurrency analyst Zach Rynes to suggest that most interested investors have already purchased ahead of the approval. With major firm VanEck having submitted its updated S-1 filing, the official ETF launch awaits, potentially leading to price changes due to significant investment inflow. However, concerns remain over Grayscale's possible conversion of its Ethereum Trust into an Ether ETF, potentially triggering significant outflows.
Despite the groundbreaking American approval of Spot Ether exchange-traded funds (ETF), Ether's (ETH) price has remained relatively stable. This development occurred on May 23rd, when the U.S. Securities and Exchange Commission approved listings for eight Spot Ether ETFs. Preceding the announcement, Ether's price declined by 3.4%, but showcased a 5% rebound shortly after, with its current trade value being $3,806.
Cryptocurrency analyst Zach Rynes suggests that this price stagnation can be attributed to the majority of interested investors having already purchased Ether in anticipation of the approval. Prior to the announcement, Ether had seen a 29% value increase in the past week due to speculations of the SEC shifting its approach towards ETF approvals. Nonetheless, despite the approval of these ETFs, their official launch awaits the clearance of their S-1 filings. These documents provide comprehensive details on a company's financial position, risk factors, and the securities they plan to offer.
VanEck, a major player in the space, has recently submitted its updated S-1 to the SEC. The approval process for this filing, according to experts, might last a few weeks or even months.
Rynes anticipates the launch of the ETFs and subsequent investment inflow to significantly impact Ether's price. He opined, "ETFs haven't officially launched yet, so the influx of new capital is still pending", a sentiment echoed by the crypto research firm Second Mountain. They predicted a massive "capital inflow in the first week, potentially touching the billions."
However, not all believe that this will lead to an immediate upward trend. History shows that Bitcoin's price declined by 15% after the approval of its Spot ETFs in January. It took one month after listing for its value to increase by 30% to $51,870.
Moreover, fears persist that Grayscale's intentions to convert its Grayscale Ethereum Trust (ETHE) into a spot Ether ETF might trigger major outflows, mirroring the outcome for Grayscale Bitcoin Trust (GBTC) following the approval of Bitcoin spot ETFs. As per a pseudo-crypto trader Rho Rider, following the approval of Bitcoin spot ETFs in January, GBTC has dropped a total of $17.6 billion in assets.
Sassal, an independent Ethereum educator, believed that ETH is significantly undervalued and stated that the market only had three days to adjust to the ETF approval news. Meanwhile, Bitcoin experienced a slight 1.2% drop to $67,362 post announcement but has since risen to $67,706. Simultaneously, PEPE (PEPE) reached another all-time high of $0.00001531, marking a 5% increase post-approval.
This news does not constitute investment advice or suggestions. All investments come with risks and it's crucial for investors to conduct their own research before making decisions.
Published At
5/24/2024 5:27:07 AM
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