Ethereum
Don’t Expect an Ethereum ETF Boom Overnight: Here’s Why
Do you think the SEC has fully approved ETH ETFs? Well, you are wrong.
Ethereum exchange-traded funds (ETFs) are making a lot of noise in the crypto space. But let’s set the record straight: Although the SEC has given the green light to Form 19b-4 for eight Ethereum ETF issuers, including big names like BlackRock and Fidelity, full approval is still pending. This news has sparked both excitement and caution in the crypto sphere, prompting many to wonder when Ethereum (ETH) will reach new highs.
A step forward, but not quite yet
Key factors for approval
Approved 19b-4s, not S-1
The SEC’s recent green light only covers Form 19b-4, not the more comprehensive S-1 registration statements. This means that progress is being made, but the final push that everyone is waiting for has not yet arrived. Investors are optimistic but aware that crucial approvals are still pending. As @JSeyff says so well,
“TO BE CLEAR: This does not mean they will start trading tomorrow. This is simply a 19b-4 approval. We also need to approve the S-1 documents, which will take time” ~
Navigating Uncertainty
Unlike the Bitcoin Spot ETFs, which took a different path to approval, the Ethereum ETF got the green light through the Division of Commerce and Markets with “delegated authority.” But this does not exclude possible challenges from the commissioners within 10 days, which adds to the uncertainty.
And let’s not forget the looming possibility of political hurdles, keeping the finality of approval in suspense.
Control expectations: registration ≠ purchase
While the approval for listing of Ethereum ETFs marks a significant milestone, it is crucial to understand that this does not mean immediate buying opportunities. This distinction has so far limited significant price upside, as institutional investors wait for the green light to trade ETH. Once this happens, a flood of institutional investment should spark an uptrend.
But regulatory complexities and political dynamics are slowing the process, prompting cautious optimism amid broader uncertainties.
Price forecast
On the technical side, Ethereum has overcome many obstacles, supported by relatively low network fees that could spur more activity. However, surpassing the $4,000 mark could take time.
History reminds us that ETF approvals don’t always lead to an instant surge; Bitcoin saw a brief decline after spot Bitcoin ETFs got the green light earlier this year before rebounding.
Everyone is asking me about your tweet. Here is:
-> S-1s will be approved, don’t be stupid
-> so what? This is how many of them are approved
-> they will not contest in any meaningful way. it will not be refused.
-> It was probably not possible to understand that the IMO approval in BC was already integrated based on…– Eric Balchunas (@EricBalchunas) May 23, 2024
Balancing optimism with reality
Despite Ethereum educator Sassal’s confidence that ETF approval has not yet fully sunk in, the market remains cautiously optimistic. Although Ethereum has shown resilience this month, the full impact of the ETF approval may take some time to materialize. Recent market movements, such as a brief 1.2% drop in the price of Bitcoin followed by a 5% rise in cryptocurrencies like Pepe following the news, highlight the complex factors at play.
The market has spent the last few months pricing in an ETH ETF rejection
The market has only had 3 days to evaluate the ETF approval, and ETFs likely won’t even begin trading for at least a few weeks.
ETH is stupidly undervalued
— sassal.eth/acc 🦇🔊 (@sassal0x) May 23, 2024
And after?
VanEck has submitted a revised S-1 to the SEC, with analysts expecting clearance in the coming weeks or months. Crypto analyst Zach Rynes believes that once ETF inflows begin, Ether prices will see a significant increase.
The SEC’s decision on Ethereum ETFs is a positive step, but will it be enough to fuel a sharp rise in prices? Share your thoughts.