ETH ETF Approval Speculations Drive ETH Price Surge
The cryptocurrency market is buzzing with speculation as the US Securities and Exchange Commission (SEC) hints at the possibility of approving ETH exchange-traded funds (ETFs). Ether, the second-largest cryptocurrency by market value, has been eagerly awaiting regulatory approval to enter the ETF space.
Since the news of potential approval broke, ETH price has soared by nearly 26% since May 20, reaching $3,839 on May 21. This marks the highest price level for the token since March 15 earlier this year.
The SEC’s stance on ETH ETFs has shifted recently, with agency staff indicating a leaning towards approving several Ether ETFs. This departure from earlier expectations of rejection has caught the attention of market participants. The SEC has provided comments on applications from firms such as BlackRock and VanEck, suggesting that prompt issue resolution could lead to approvals as early as May 25.
The urgency is further emphasized by the looming deadline for VanEck’s spot Ether ETF application on May 23, with similar deadlines for other major players like ARK Invest, Grayscale, and Fidelity in the coming months.
Craig Salm, Grayscale’s chief legal officer, had previously speculated that operational aspects discussed for Bitcoin ETFs are directly applicable to Ether ETFs. This includes procedures for creation and redemption, authorized participants, and custody issues.
If the SEC approves Ether ETFs, it could open the market to institutional investors. The impact is expected to mirror the launch of spot Bitcoin ETFs, which attracted billions in investments and contributed to significant price gains for Bitcoin in 2024.
The anticipation of SEC approval has already influenced the market, with Ether prices experiencing significant growth, while Bitcoin also saw a 5% increase, reaching $70,350.
Additionally, following the news of potential SEC approval for ETH ETFs, the token’s 20-day EMA (red wave) and 50-day EMA (purple wave) formed a bullish pattern known as the golden cross. Traders consider this pattern as an indicator of bullish market sentiment.
However, despite the hype surrounding the likely SEC approval for an ETH ETF, the token’s price failed to surpass $3,900. Any further uptrend may face resistance near $4,000 and $4,310, while a reversal could see the ETH price testing support levels near $3,570 and $3,340.
Furthermore, the approval of Ether ETFs could benefit existing products such as the Grayscale Ethereum Trust, which currently trades at a discount to its Ether holdings. Converting this trust into an ETF would eliminate this discount, offering immediate returns to investors and potentially increasing the fund’s appeal.