The SEC will decide this week whether to approve an Ethereum spot ETF. In response, Joseph Lubin, co-founder of Ethereum, stated that if it is approved, Ethereum may face a supply shortage, leading to an increase in the price of the coin.
(Background:
Last chance to buy ETH at a discount? Grayscale Ethereum Fund ETHE continues to narrow its discount, lawyers believe SEC will not consider ETH as a security)
(Additional background:
Important Sign》VanEck, Franklin Ethereum Spot ETF already listed on the DTCC! ETH surges to $3800)
The approval of an Ethereum spot ETF by the U.S. Securities and Exchange Commission (SEC) this week is the most anticipated issue in the cryptocurrency market. With more and more signs emerging, investor sentiment is gradually rising:
Bloomberg ETF analysts have raised the probability of approval for the Ethereum spot ETF (Form 19b-4) from 25% to 75%.
The latest list from the Depository Trust & Clearing Corporation (DTCC) shows that the spot Ethereum ETFs launched by asset management giants VanEck and Franklin Templeton have been included in the active and pre-market lists.
Six spot Ethereum ETF applicants have submitted revised Form 19b-4 documents, including VanEck, Fidelity, Franklin, Ark Invest, Grayscale, and Invesco Galaxy.
Will Ethereum face a supply shortage?
In this context, Joseph Lubin, co-founder of Ethereum and CEO of Consensys, also predicts that if approved, Ethereum may face a supply shortage for the following three reasons:
First, Joseph Lubin stated:
Furthermore, on-chain data shows that over 27% of the total Ethereum supply has been staked on the Ethereum network.
Third, the continued activity of the Ethereum DeFi ecosystem.
Lubin believes that the combined effect of these three reasons will further reduce the Ethereum supply. At the same time, he mentioned that since Ethereum’s market value is lower than Bitcoin’s, this will make the price of Ethereum more sensitive to capital inflows, implying that it may be easier to drive up the price of ETH.
Whether the Ethereum spot ETF will be approved by the SEC is still unknown. However, if it becomes a reality, it can be expected that there will be more institutional demand shifting towards Ethereum, and a price surge similar to Bitcoin’s after its approval cannot be ruled out. However, it is important to note that the volatility of ETH may be significant in the near term, so investors should exercise caution.
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