Ethereum soars as chances of its ETF increase

The price of ether (ETH), the native cryptocurrency of the Ethereum network, rose more than 12% in the last 24 hours.

At the time of this publication, as can be seen in the CriptoNoticias Price Calculator, each ETH trades for $3,528 on the main exchanges.

The following graph, provided by the TradingView platform, shows the ether price movement during the last 7 days, period in which the price increase was more than 20%.

This increase in the price of the cryptocurrency occurs after Eric Balchunas, one of the most recognized specialists in investment funds worldwide, announced through a publication on the social network There would be high chances of approval for ether ETFs in the United States.

“James Seyffart and I are increasing our ether ETF approval odds to 75% (up from 25%), hearing rumors this afternoon that the SEC could be doing a 180 on this (increasingly political) issue.” ), so now everyone is rushing (just like us, everyone else assumed they would be rejected).”

Eric Balchunas, senior analyst at Bloomberg Intelligence

Eleanor Terret reached similar conclusions, a Fox Business journalist who on several occasions had access to inside information regarding bitcoin ETFs (which were approved by the SEC in January 2024). She wrote, also on the social network X:

“A broadcast source tells me about the development of the ether ETF: ‘Things are evolving in real time.'”

Eleanor Terret, Fox Business journalist.

On the other hand, as reported by the newspaper Coindesk based on supposedly confidential sources, “the SEC would be requesting the exchanges to update the 19b-4 filings in an accelerated manner.” This suggests “that they could be taking steps to approve these applications before a deadline this Thursday.”

As CriptoNoticias has reported on several occasions, in general, Until this morning there were negative expectations for the Ethereum cryptocurrency spot ETFs in the United States. Many assured that the SEC would finally reject, at least on this occasion, the proposals that 8 companies made to it.

The reason that led to thinking that the SEC would give a negative verdict is that the regulator has not held numerous public meetings with the companies that requested approval of the ETFs. This way of proceeding is different from what he had shown last year when he constantly met with those who asked for permission to launch a bitcoin ETF (permission that was finally granted).

But, it should also be taken into account that many issues related to digital asset ETFs, in general, were already discussed prior to the launch of bitcoin ETFs (for example, how custody of the cryptocurrencies that back the fund will be carried out). Therefore, it may also be thought that so many meetings would not be necessary.

For now, The market is still waiting for what the SEC’s final decision will be.. The regulatory body usually takes until the last day before giving a definitive response, so it would not be unusual for its final decision to be made public on Thursday, May 23, the day of the deadline to define whether or not the ETF is approved. of ether requested by the VanEck company.

What would the approval of spot ETFs in the United States mean for ether?

Approval of Ethereum cryptocurrency spot ETFs triggers bullish expectations on ETH. The fear and greed index for ETH shows right now that the market is extremely greedy:

These ETFs (unlike futures ETFs) are backed by the underlying asset, in this case, ether. This means that if there is high buying pressure for these financial products, direct demand for ether will increase, because The companies that manage the ETFs must go to the market to acquire ETH with which to back the funds. That, due to the simple law of supply and demand, ends up being bullish for the price of the cryptocurrency.

Besides, ether ETFs would give expanded access to investors who do not wish to directly purchase the cryptocurrency and “store” it in a self-custody wallet, but simply want to be exposed to the volatility of its price. This is especially attractive for institutional and corporate investors who seek exposure to ETH and prefer to do so through mechanisms regulated by the SEC, the entity that controls the stock market in the United States.

In recent days, there has been significant institutional and corporate adoption of the bitcoin ETFs approved in January. Even large banks are making million-dollar investments in these funds. This leads to speculation about a potential similar effect on ether ETFs, raising market expectations.