Recent market activity indicates investors are anticipating the potential approval of Ethereum spot ETFs after the approval of the hyped spot Bitcoin ETF approval. The recent surge in interest surrounding Bitcoin spot ETF approvals has created speculation about the next potential development in the cryptocurrency world.
All signs point to Ethereum becoming the next major digital asset in focus for ETF providers seeking regulatory approval
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Is Ethereum ETF approval coming next?
Ethereum has notably outperformed Bitcoin in recent trades, experiencing a surge of over 10% compared to Bitcoin following the false news of a BTC spot ETF approval earlier this month. According to data analytics firm IntoTheBlock, traders are seemingly assuming that Ethereum will be the next cryptocurrency to receive approval for a spot ETF.
This assumption aligns with the SEC’s reasoning for approving Bitcoin spot ETFs. The SEC, in its approval order, indicated that potential manipulation affecting Bitcoin’s spot markets could similarly impact related futures markets.
Considering Ethereum already has a futures-based ETF trading in the US, regulators may apply the same logic to a spot ETF directly tied to Ether.
Market enthusiasm extends beyond Ethereum itself, with traders flocking to other crypto assets associated with Ethereum’s ecosystem. This includes layer-2 tokens related to Ethereum’s scaling solutions and tokens linked to liquid staking protocols. With the belief that spot ETF approvals can significantly influence prices, the broader community is positioning for a green light on an Ether spot ETF.
The likelihood of approval may have increased following comments from BlackRock CEO Larry Fink, who expressed the value in an Ethereum ETF. BlackRock has initiated the application process for such a product.
Major financial entities like Fidelity, Ark Invest, and VanEck have also submitted filings for spot Ether ETFs. VanEck, in particular, faces an early decision deadline from the SEC on May 23rd, with some analysts estimating a 70% probability of approval by that date.
Market Experts Opinion
Despite the optimism, there are notes of caution from market experts. TD Cowen predicts potential delays, with the SEC likely adopting a cautious approach even after Bitcoin approvals. The key question revolves around whether regulators will classify Ether as a commodity or a security like Bitcoin, introducing complexity in applying standards for exchange-traded products. Despite potential delays, the growing options for institutional and retail investment gaining SEC approval paint a positive picture for the future.
To conclude, after the Spot Bitcoin ETF approval, is the Ethereum ETF coming up next? The answer to this is that Ethereum ETF appears destined to arrive sooner rather than later, potentially acting as a greater stimulant for growth and mainstream adoption than Bitcoin has experienced. As the crypto community shifts focus to the next milestone, Ethereum’s journey to emerge from Bitcoin’s shadow and solidify its position as the leading smart contract platform holds significant stakes.
Note: It’s a research based article not a financial advice.
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