Ethereum Soars to Two-Month High Amidst U.S. ETF Approval Anticipation
Summary:
Ethereum's price leaped by 24.50%, hitting a two-month high of $3,790 on May 21. This increase could be linked to probable U.S. approval for a spot Ethereum exchange-traded fund and a judgment by the Department of Justice reducing Ethereum's chances of being recognized as security. Furthermore, the Ethereum Futures' open interest and funding rates saw a significant upswing. Applying technical rules to the Ethereum chart, its predicted price could reach around $4,120 by end of May.
Over the past 24 hours, Ethereum's price rate soared by around 24.50%, reaching an all-time high of nearly $3,790 in two months as of May 21. Outperforming the overall cryptocurrency market's gains which were around 11%, Ethereum held firm its position as the second-largest crypto. The impetus behind this unexpected hike in Ethereum's worth lies in two critical factors. Firstly, the U.S. is likely to give a green light for a spot Ethereum exchange-traded fund (ETF), and secondly, a recent declaration by the Department of Justice reduces the probability of Ethereum being branded as security.
The U.S. Securities and Exchange Commission (SEC) has been in touch with a prospective spot-Ether ETF issuer as well as at least one cryptocurrency exchange to revise their corresponding 19b-4 filings. Fidelity Investments, one contender for the ETF, already trimmed down its application, eliminating its Ethereum staking schemes. Following this update, Eric Balchunas, a Bloomberg ETF analyst, and James Seyffart, a research analyst, boosted their prediction of a spot Ether ETF being accepted from 25% to an impressive 75%.
In the meantime, Geoff Kendrick from Standard Chartered prophesies that the SEC will rubber-stamp this financial instrument within the week, thereby attracting an inflow ranging from $15 billion to $45 billion in its initial year. These developments have made Ethereum a hot favorite among investors for the short term, mirroring the situation in the Bitcoin arena before its ETF acknowledgments in January.
The recent surge of Ethereum is also powered by a freshly unsealed indictment by the Justice Department on May 15. The indictment revealed charges of wire fraud and money laundering against two persons for exploiting the Ethereum blockchain. The indictment gives clarity by highlighting Ethereum as a decentralized blockchain that functions independently of any trusted intermediary. Following this, the court also recognized that Ethereum smart contracts facilitate transactions without any requirement for a trusted go-between, thereby increasing investors' confidence in Ethereum, mainly after the SEC handed a Wells notice to Robinhood for alleged security violations linked with crypto listings.
Orlando Cosme, CEO of Lexproof, stated that judgment possibly disrupts the categorization of Ethereum as security, indicating it wouldn't require any management or efforts from other businesses.
Additionally, Ethereum's price rise comes hand in hand with a huge hike in its open interest (OI) and funding rates. Ethereum Futures OI escalated by more than $3 billion, marking at $14.68 billion on May 21, while the funding rate touched a monthly peak of 0.567% p/week.
Finally, from a technical perspective, Ethereum's benefits today can be attributed to a breaking out of a falling-off wedge stage. The theoretical rules applied to Ethereum's map project a target price of roughly $4,120 by end May, marking an increase of about 10% from its current rates. But remember, every investment comes with risks, so bear that in mind before making your decision.
Published At
5/21/2024 4:16:47 PM
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