Possible Approval of Ethereum ETF by July Anticipated
According to analysts, the Securities and Exchange Commission (SEC) may grant final approval for Ethereum exchange-traded funds (ETFs) by July. This comes after the approval of Bitcoin and Ethereum futures ETFs. Nate Geraci, President of ETF Store, predicts that the SEC will finalize the approval within the next 2-3 months, while Eric Balchunas from Bloomberg suggests July 4th as a potential date. The approval of Ethereum ETFs has significant implications for investors and the market.
Market observers are closely watching how Grayscale’s Ethereum Trust (ETHE) will respond to the potential approval. Following the approval of Bitcoin ETFs, Grayscale Bitcoin Trust (GBTC) experienced outflows of $6.5 billion in January. With $11 billion in assets under management, ETHE could also face substantial outflows. Kaiko estimates that daily outflows could average $110 million if ETHE follows GBTC’s trend, amounting to 30% of ETH’s daily volume on Coinbase.
However, James Van Straten, a crypto analyst, downplays the likelihood of significant outflows. He points to Grayscale’s low-fee Mini Trust ($ETH) as a mitigating factor. Unlike GBTC, investors don’t need to take any action with the Mini Trust, which could help retain investors and prevent excessive outflows.
The potential approval of Ethereum ETFs in July 2024 could have a significant impact on the cryptocurrency market. The SEC’s earlier approval of spot Bitcoin ETFs resulted in $12 billion in net inflows and a 78% increase in Bitcoin’s price over six months. However, the market response to the initial announcement of Ethereum ETF approval has been more subdued, with Ethereum experiencing a slight drop despite a 58% increase in 2024.
On the 4-hour chart, there is a bearish RSI divergence, indicating a possible price pullback. The RSI is showing lower highs while the price is reaching higher highs, suggesting that ETH may decline to its 50-day moving average around $3,705.1 or the support zone near $3,600 before rebounding to the resistance at $4,000. Such divergences often indicate temporary weakness in the price trend, signaling potential short-term volatility.
Currently, Ethereum is trading at $3,840.4, down 0.41% in the last 24 hours. Its market cap is $465.75 billion, with a 24-hour trading volume of $19.07 billion. With a circulating supply of 120,137,632 ETH, Ethereum holds significant market presence and activity, highlighting the potential impact of ETF approvals on its trading dynamics.
If approved, Ethereum ETFs could enhance liquidity and accessibility for investors, further integrating cryptocurrency into traditional financial systems. However, regulatory challenges related to staking and the market’s response to the approval will be crucial factors to monitor.