SEC Approves Eight Ethereum ETFs
24 May, 2024 ● Crypto News
On May 23, the U.S. Securities and Exchange Commission (SEC) green-lighted eight spot Ether ETFs for listing on various exchanges.
Before this announcement, Ether's price dropped by 3.4% but subsequently recovered by about 5%. Currently, ETH is trading at $3,806.
Crypto commentator Zach Rynes suggests that the modest price movement might be due to market anticipation, as "everyone who wanted to buy the approval already did."
Ether had previously risen by 29% in the week leading up to the approval, fueled by speculations that the SEC was shifting its stance on ETF approvals.
Rynes, among others, also pointed out that although the ETFs have received approval, they are not yet launched.
The launch depends on an approved S-1 filing, a detailed document that includes information about the firm’s finances, risk profile, and securities offerings.
VanEck has recently submitted its amended S-1 filing to the SEC, and analysts predict it could take weeks to months to receive S-1 approvals.
Rynes anticipates that the next significant price driver for Ether will be the inflow of ETF investments once trading commences.
“ETFs haven’t actually launched yet, so net new capital inflow is still to come,” Rynes stated, a sentiment echoed by crypto research firm Second Mountain.
“Expect a massive capital inflow in the first week, potentially reaching billions,” Second Mountain predicted in a May 23 X post just before the SEC's approval.
However, some analysts believe this might not immediately result in a price increase.
Following the approval of spot Bitcoin ETFs on January 10, Bitcoin’s price fell 15% and only began to recover 30 days later, reaching $51,870, according to CoinMarketCap.
Concerns also persist that Grayscale’s announcement about converting its Grayscale Ethereum Trust (ETHE) into a spot Ether ETF could lead to significant withdrawals—similar to what occurred with the Grayscale Bitcoin Trust (GBTC) following the approval of spot Bitcoin ETFs in January.
“Grayscale also re-filed the ETHE registration they’d withdrawn. Remember GBTC outflows? Now it’s $11B+ ETH that’s been trapped for 7 years,” noted pseudonymous crypto trader Rho Rider in a May 23 X post.
Since the trading of spot Bitcoin ETFs began on January 11, GBTC has lost a total of $17.6 billion in assets, as reported by Farside data.
“ETH is stupidly undervalued,” remarked Sassal, an independent Ethereum educator, arguing that the market has had only three days to "price in the ETF approval."
Meanwhile, after the announcement, Bitcoin experienced a slight dip of 1.2% to $67,362 but has since risen to $67,706.
Simultaneously, Pepe reached a new all-time high of $0.00001531, marking a 5% increase within the hour following the approval news.
Sources:
https://cointelegraph.com/news/ether-etf-approved-ethereum-price-sluggish
https://x.com/secondmountainx/status/1793585712442310948
https://x.com/ChainLinkGod/status/1793781010724983068
https://x.com/Grayscale/status/1793758056301691329
https://x.com/sassal0x/status/1793787651495239803
https://x.com/lex_node/status/1793761121335218188
https://x.com/RhoRider/status/1793798021777592737
