SEC to Decide on Bitcoin ETF: Implications for Ethereum
The U.S. Securities and Exchange Commission (SEC) is set to announce its decision on a spot Bitcoin ETF today, January 10. The market is eagerly awaiting this historic event, with hopes that the SEC will approve the Bitcoin ETF. Such a decision could have far-reaching implications for the cryptocurrency market, including the second-largest cryptocurrency, Ethereum (ETH). Investors and analysts are particularly interested in how Ethereum could benefit from a positive BTC ETF decision.
Potential Benefits of a Positive BTC ETF Decision for Ethereum
The entry of a spot Bitcoin ETF into the market would establish a regulatory precedent, potentially paving the way for other crypto ETFs. This means that if a Bitcoin ETF is approved, it could lay the groundwork for the approval of other cryptocurrencies, including Ethereum. Many experts believe that the SEC’s approval of a Bitcoin ETF would involve establishing a framework that could be applicable to other cryptocurrencies. This would be a significant development for Ethereum, as it would increase the likelihood of a spot Ethereum ETF being approved in the near future.
Could a Bitcoin ETF Approval Pave the Way for an Ethereum ETF?
Last month, the SEC postponed its decision on several Ethereum ETF applications, pushing the decision date to May 2024. This includes applications for the Grayscale Ethereum Futures ETF, the ARK Invest and 21Shares spot Ethereum ETFs, the Hashdex Nasdaq Ethereum ETF, and the VanEck spot Ethereum ETF. While the delays are seen as part of the SEC’s process, which involves gathering public opinion, they also come at a time when the regulator is attempting to classify some proof-of-stake (PoS) cryptocurrencies as securities. However, the SEC has not named Ethereum as a security in any recent lawsuits targeting crypto exchanges, nor has it challenged Ethereum’s classification through the ETF registration process with the Commodity Futures Trading Commission (CFTC).
Given these circumstances, there is a possibility that a spot Ethereum ETF could be approved in the U.S. by May 2024. This would be a significant boost for Ethereum prices, as it would open the doors for more institutional investors to enter the market.
Delays in Ethereum ETF Applications: What Does it Mean for ETH?
The delays in the approval of Ethereum ETF applications can be seen as part of the SEC’s thorough review process. The regulator is likely taking its time to gather public opinion and carefully consider the implications of approving these ETFs. However, some market observers believe that the delays may also be a result of the SEC’s attempt to classify PoS cryptocurrencies as securities. Nonetheless, the fact that the SEC has not challenged Ethereum’s classification through the ETF registration process with the CFTC is a positive sign for the future approval of a spot Ethereum ETF.
Spot Ethereum ETF Approval Potential Boost for ETH Prices
From a technical standpoint, Ethereum’s price is currently trading above the resistance horizontal of its ascending triangle pattern, ahead of the Bitcoin ETF decision. The negative divergence from the Relative Strength Index (RSI) suggests that the bears are still trying to push the price lower. If there is a delay or denial of the Bitcoin ETF approval, the price of Ethereum could correct towards the lower trendline of the triangle pattern, which is near $2,330. However, if the Bitcoin ETF is approved, it could validate Ethereum’s ascending triangle setup and potentially trigger a rising wedge reversal pattern. In this case, the triangle’s upside target would be near $2,615 in the near term, representing a 10% increase from current price levels. The upward movement of both the exponential moving averages (EMAs) and the RSI suggests that there is still bullish momentum in the Ethereum market, with more buyers than sellers.
Analyst comment
Positive news: The SEC’s decision on a spot Bitcoin ETF could have far-reaching implications for the cryptocurrency market, including Ethereum. If a Bitcoin ETF is approved, it could pave the way for the approval of an Ethereum ETF. The delays in Ethereum ETF applications could be part of the SEC’s thorough review process, and the fact that the SEC has not challenged Ethereum’s classification is a positive sign. From a technical standpoint, if the Bitcoin ETF is approved, it could validate Ethereum’s ascending triangle setup and potentially trigger a rising wedge reversal pattern, leading to a 10% increase in price.
