The US SEC approved eight Ether exchange-traded funds (ETFs) this month. Through ETFs, investors can get involved in Ether trading through traditional stock markets – instead of having to use the crypto exchange ecosystem. Interested members of the investor community will be able to check the ETH ETF listings on Nasdaq, CBOE and NYSE. The development marks another landmark decision for the crypto sector as it awaits regulatory acceptance and legal adoption as part of the global fintech industry, experts say.
US approved ETH ETFs by Grayscale, Bitwise, Blackrock’s iShares, VanEck, Ark 21Shares, Invesco Galaxy, Fidelity and Franklin.
As for the investor community, the approval of these Ether ETFs in the US has diversified the investment and liquidity tools for small and large investors. The decision, furthermore, comes with benefits for the Ether ecosystem that presents it as a recognized crypto asset alongside Bitcoin.
Speaking to Gadgets360, Raj Kapoor, who serves as a regional committee member for the US SEC, highlighted some of the immediate implications this development could have for the crypto industry.
“The primary effect would be to open up opportunities for traditional investors, thereby increasing demand and liquidity. ETFs would now also offer a regulated and familiar investment vehicle, potentially reducing the perceived risks associated with cryptocurrencies, thereby attracting more institutional investors. This in turn would give confidence and validation to the much maligned sector,” said Kapoor.
Kapoor predicted an increase in the market capitalization of the crypto sector, which currently stands at $2.58 trillion (roughly Rs. 2,14,27,183 crore) according to CoinMarketCap, in the coming weeks.
ETH ETFs have boosted investor sentiment towards cryptocurrencies while pushing Ether, the second most valuable cryptocurrency after Bitcoin, on an upward trajectory in terms of price. This idea, in line with Kapoor’s prediction, was shared with Gadgets360 by Sergey Gorev, risk manager at the Swiss Web3 platform YouHodler.
“We predict that the new all-time high price of ETH will exceed $5,000 (roughly Rs. 4.15 lakh) in the next twelve months. Over the past few weeks, a lot of money has flowed into the crypto market via the Ether network, especially after news of its potential ETF approvals began to circulate. Looking ahead, with these developments such as crypto ETF approvals, our long-term estimate is that the crypto market will exceed the current gold market cap of $16 trillion (roughly Rs. 13,29,68,800 crores),” Gorev said.
Notably, Ether’s price action has indeed seen a four percent drop following the approval of the ETF, mirroring the trend seen following the approval of the Bitcoin ETF earlier this year. As of Monday, May 27, Ether was trading at $3,911 (roughly Rs. 3.24 lakh) on foreign exchanges after the price rose by 2.54 percent. Meanwhile, on Indian exchanges, ETH is moving above the price point of 4128 (roughly Rs. 3.42 lakh).
Ahead of the US presidential election, a number of senators and asset management companies have expressed positive outlooks for the future of the crypto sector.
“SEC approval of spot ETF for Ether is the latest sign that cryptocurrencies are being embraced as a mature asset class,” Senator Cynthia Lummis commented on the development on Twitter.
.@SECGovThe approval of the spot ETF for Ether is the latest sign that cryptocurrencies are being embraced as a mature asset class and underscores the need for Congress to adopt a regulatory framework to protect consumers and provide clear ground rules for the industry.
— Senator Cynthia Lummis (@SenLummis) May 24, 2024
“SEC OKs Ethereum ETFs The SEC’s landmark approval of spot Ethereum ETFs marks a pivotal moment, classifying ether as a commodity and increasing its legitimacy. Despite facing $80 million (roughly Rs. 664 million) in liquidations, Ethereum price rises following SEC approval of ETF, fueling market optimism,” Greythorn Asset Management said in its X post.
:earth_africa: The most important weekly news (21/05 – 27/05/2024) :globe_with_meridians:
1/ :tada: SEC favors Ethereum ETFs
The SEC’s landmark approval of spot Ethereum ETFs marks a pivotal moment, classifying ether as a commodity and increasing its legitimacy. #Ethereum #ETF2/ :us: Trump’s crypto obligations… pic.twitter.com/W8nmycBAqH
— Greythorn Asset Management (@0xGreythorn) May 27, 2024
There are currently over 120 million Ether tokens in circulation, according to CoinMarketCap and the infinite supply of tokens. While Bitcoin remains the dominant asset on the crypto chart, market analysts see an expansion in Ether’s ecosystem now that ETFs linked to the asset will be available on the Nasdaq, CBOE and NYSE.
A blog by Jonas Gross, president of the Digital Euro Association (DEA), cited estimates from Bloomberg’s Eric Balchunas and James Seyffart claiming that ETH ETFs could take up 10 percent to 20 percent of the assets under management seen in Bitcoin ETFs in the coming months.
