The U.S. Securities and Exchange Commission (SEC) officially approved the 19b-4 filing for the Ethereum spot ETF this morning. However, the price of ETH did not experience significant changes. Can we predict its trend based on the approval of the Bitcoin spot ETF at that time?
(Previous Summary: After the Ethereum spot ETF is approved, will Solana be next? Which other stocks have potential?)
(Background Supplement: What is an Ethereum spot ETF? Differences with futures, investment methods, advantages and disadvantages, issuance methods… Complete analysis)
Around 5 am this morning, the U.S. Securities and Exchange Commission (SEC) officially approved the 19b-4 filings (exchange rule changes) for eight Ethereum spot ETF applications, including BlackRock, Fidelity, Grayscale, etc.
However, unlike the swift listing of the Bitcoin spot ETF at that time, issuers still need to wait for the SEC to approve their S-1 registration statement before they can officially begin trading. It is currently unclear how long this process will take, but analysts speculate that it may take several weeks to two or three months.
What’s the future of Ethereum?
Currently, it seems clear that the Ethereum spot ETF will be listed in the middle of this year. However, investors may be more concerned about the future trend of ETH.
Today, Ethereum experienced slight fluctuations. It briefly dropped to $3,523 due to rumors online about the “SEC delaying the decision on the Ethereum spot ETF for 6 hours” and briefly reached $3,900 after the review results were announced. The volatility can be said to be not particularly significant, and both long and short positions seem to be brewing their next moves.
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Take a look at the trend of the Bitcoin spot ETF at the beginning of the year
Although the situations are different, we can refer to the price trend of the Bitcoin spot ETF after its approval and gain some insights.
After it was approved on January 10, 2024, the Bitcoin spot ETF began trading the next day. However, after a brief surge, it fell from $47,000 to $38,000 and continued to decline for nearly two weeks before starting a significant upward trend.
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Trend of Bitcoin spot ETF during its listing
During that period, the biggest selling pressure mainly came from Grayscale’s GBTC. The correction of the negative premium and higher transaction fees made investors choose to take profits or transfer their positions. This time, when the Ethereum ETF is listed, Grayscale’s ETHE may also experience a similar situation.
According to statistics, as of May 22, the fund size of ETHE was about $10.9 billion. Although not as large as GBTC at the beginning, it may still bring a certain level of selling pressure. Additionally, the market bulls may want to clear out leverage from other investors first and obtain sufficient liquidity before pushing the price up (a tactic of pushing down first then pulling up).
Dynaremind investors to do their own research (DYOR) and risk management, as market changes are always difficult to predict.
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