Analysts’ Confidence and Comparisons with Bitcoin
ETF analyst Eric Balchunas from Bloomberg is optimistic about the approval of an Ethereum spot ETF, estimating a 70% chance of approval by May. Balchunas draws comparisons between Ethereum and Bitcoin, stating that it is unlikely for spot Bitcoin ETFs to be approved while spot Ether ETFs are not. He emphasizes that Ethereum is closely tied to Bitcoin and believes that spot Ethereum ETFs “will be fine“. Balchunas’ 70% probability is significant as his approval odds for spot Bitcoin ETFs last year turned out to be accurate. Digital asset lawyer Joe Carlasare also expresses confidence in the approval of Ethereum spot ETFs this year.
Ethereum ETF Application Deadlines
Multiple asset managers, including BlackRock Inc, VanEck, ARK Invest & 21Shares, Fidelity Investments, and Invesco Galaxy, have filed applications for spot Ether ETFs. The SEC faces various deadlines ranging from May 23 to August 7 to make decisions on these applications. If one spot Ether ETF is approved, it may potentially lead to the approval of others, following the precedent set with spot Bitcoin ETFs.
Market Impact and Price Surge
The anticipation of Ethereum ETF approval is already impacting the market. Following the recent approval of Bitcoin ETFs, Ethereum experienced a surge of 7.92% in the past 24 hours and a notable 17% rally over the past week, according to data from CoinMarketCap. Additionally, Ethereum’s open interest increased by 11.52% to $7.81 billion, signaling increased trading activity and a bullish sentiment among investors.
Potential Implications for the Crypto Market
The potential approval of Ethereum ETFs could have significant implications for the crypto market. Ethereum has been gaining attention from both institutional and retail investors, and an ETF could provide a more accessible and regulated investment vehicle for these investors. It could also lead to increased liquidity for Ethereum and contribute to its further adoption in traditional finance.
Predictions and Caution for Approval Timing
While analysts express confidence in the eventual approval of Ethereum spot ETFs, there is caution regarding the timing of the approval process. Digital asset lawyer Joe Carlasare suggests that the approval process may take longer than expected as the SEC establishes a precedent for determining which digital asset ETFs can enter the market. Carlasare anticipates that spot Ethereum ETFs might not commence trading until the third quarter of 2024, contrasting with the optimism of some applicants who hint at potential trading as early as the second quarter. The exact timing of the launch remains uncertain, despite the relatively high approval odds.
In summary, analysts are confident in the approval of Ethereum spot ETFs, drawing comparisons with Bitcoin and citing positive signals from informal channels. The SEC faces upcoming deadlines for the evaluation of various applications, which could potentially have a positive market impact on Ethereum. However, caution is advised regarding the timeline for approval, as the SEC aims to establish a precedent for digital asset ETFs. Overall, the approval of Ethereum ETFs could have significant implications for the crypto market and further fuel the adoption of Ethereum.
Analyst comment
Positive news. The approval of Ethereum spot ETFs is expected to have a positive impact on the market. If approved, it could lead to increased liquidity and adoption of Ethereum in traditional finance. However, caution is advised regarding the approval timing, with uncertainty around the launch date.
