The Security and Exchange Commission approved Ethereum exchange-traded funds on Thursday, May 23, 2024, a move that is predicted to give Ether its latest bull run, with some experts expecting the crypto to surge 500% this cycle. BTC had a 75% rally after the SEC approved ETFs early in the year, and ETH could be next. Despite its smaller market size, the price of Ether has been on the rise in recent months, setting a new resistance in March at $ $4,150.
Although crypto has yet to break resistance, the recent approval of Ethereum exchange-traded funds is projected to climb between $15,000 and $22,500, which is a 500% rally. Crypto experts also expect the decision to open doors for coins like Solana to get their ETFs approved in the future, but companies like JPMorgan doubt that will be the case. Here’s an overview of how the Ethereum ETF approval will affect prices and other cryptocurrencies:
Ethereum Prices Picking Up Pace
As the second most popular cryptocurrency, Ethereum has always lived under the shadows of Bitcoin, with prices barely breaking the $4,000 mark. However, the crypto’s all-time high is $4,878 and Ether is accepted in almost all places where Bitcoin is used. For instance, online gamers use ETH to purchase gold coins and explore sweepstakes casino games like slots, roulettes, and poker. Real money gaming sites also accept Ether deposits and withdrawals, with some even offering exclusive bonuses for deposits made with Ethereum wallets.
Ether current prices rallying around the $3,800 mark, combined with the advantage of ETH ETF approval, means a bull run is all but expected. ETFs provide another crypto asset for investors who don’t want to buy and hold Ethereum directly while providing a simpler process through conventional brokerage. After the ETFs are officially launched in exchange sites, investors will be able to purchase shares as they do with other digital assets. This addition could potentially rally the prices of Ethereum upward.
Ether prices have already been up by more than 60% since the beginning of the year but have struggled to break resistance due to whales selling huge chunks of their portfolio in recent weeks.
How ETH ETFs Will Affect Ether Prices
SEC approved forms 19-4bs from eight different companies, among them BlackRock, Fidelity, Ark 21Shares, Bitwise, Van Eck, Invesco Galaxy, Grayscale, and Templeton. The commission initially refused to approve the forms and asked the companies to amend them. All nine applicants, except for Hashdex, resubmitted amended forms by Wednesday, a day before the SEC announced approval of the first spot Ethereum ETFs. The approval had an immediate impact on the market, with Ether prices moving up 22% amid investor confidence in the cryptocurrency. If the bull run Bitcoin experienced after BTC ETF approval is mimicked, Ethereum prices are about to shoot up.
Standard Chartered expects the crypto’s short-term gains to close above $8,000 by the end of the year. Other industry experts and pundits predict prices will double within the current cycle. ETH EFT approval is also expected to result in more institutional inflows, which will affect the market’s liquidity and stability. When more institutions invest in ETFs, prices will become more stable and less affected by the actions of retail investors. The ETFs also give Ethereum a form of legitimacy and attract investors who previously shied away from the asset because of regulatory uncertainties and security issues. Prices are generally expected to rise, but nothing is certain, especially with other crypto assets emerging.
Will SEC Approve Other Crypto ETFs?
The approval of Ethereum ETFs was a surprising U-turn by the SEC, one that might have been influenced by a letter penned by a bipartisan group of congressmen. The letter penned to the chair of the SEC urged the commission to approve ETH ETFs and use the same guidelines used to approve BTC ETFs. After the approval, some crypto pundits and experts pointed out to the possibility of future crypto ETFs. However, companies like JPMorgan don’t foresee this outcome unless policymakers amend the legislation to declare some cryptocurrencies as non-securities. For experts at JPMorgan, ETH, and BTC, ETFs might be the only options available for a long time.
Rumors emerged about the possibility of cryptocurrencies like Solana being considered for ETFs now that the top coins, BTC and ETH, are out of the way. While these suggestions are more plausible today than a year ago, most are doubtful, given the current situation with Ethereum is still shrouded with ambiguity. The decision to classify Ethereum as a security isn’t final, and the SEC already has a strong position that all crypto tokens outside Bitcoin and Ethereum should be legislated as securities. The only way Solana or other crypto token ETFs would exist is if USA policymakers declassify them as non-securities. At the moment, such legislation doesn’t exist, making it difficult to foresee new crypto ETFs.
Key Takeaways About Ethereum ETFs
With the SEC’s approval of Ethereum ETFs in the rearview, eyes will shift to the day when these assets become available to investors. This will probably take weeks or months since the SEC must also approve S-1 forms before exchange sites can launch the ETFs. Nonetheless, the approval is already making an impact as more people are becoming interested in Ethereum and other cryptocurrencies. Prices are expected to continue rallying upwards as approved exchange sites prepare to bring these products to investors who want to diversify their portfolio or gain crypto exposure without holding the coins directly.
