As a seasoned crypto investor with a few years under my belt, I’m not entirely surprised that Ethereum’s (ETH) price hasn’t rallied significantly following the SEC’s approval of Spot Ethereum ETFs. The market often reacts in unexpected ways to major news events, and this could have been another instance of ‘selling the news.’
It’s unexpected that Ethereum‘s (ETH) price hasn’t experienced a notable rise after the Securities and Exchange Commission (SEC) gave its green light to Spot Ethereum ETFs. This approval was widely anticipated to ignite a substantial price increase for the second-largest cryptocurrency.
Why ETH’s Price Has Failed To Rally
As a crypto investor, I’ve observed that Ethereum’s price didn’t surge as much as expected following the news of potential approval. It’s important to note that earlier in the week, Ethereum’s price had already experienced a significant jump of nearly 20% after Bloomberg analysts upped their approval odds from 25% to 75%. This strong reaction suggested that the market had already factored in the likelihood of approval.
Based on the current market situation, this event could have easily become a “sell-the-news” occasion, with numerous traders cashing out their earlier Ethereum investments. According to NewsBTC, Ethereum whales acquired approximately 110,000 ETH ($341 million) between May 19 and 20, in anticipation of any news regarding the approval of these funds.
As a seasoned crypto investor, I’ve noticed that historical trends suggest ETH‘s price dip could be anticipated. This is due to Bitcoin (BTC) undergoing a substantial correction after the announcement of approved Spot Bitcoin ETFs.
While Bitcoin ETFs commenced trading right after the Security and Exchange Commission (SEC) gave their approval, the case is different for Ethereum Spot ETFs. The SEC has only endorsed the exchange applications (19b-4s), but still needs to sign off on the registration filings (S-1s) before these funds can start trading.
As a researcher studying the cryptocurrency market, I’ve noticed that the delay in the trading of Ethereum ETFs could be one reason why Ethereum’s price hasn’t surged in response to this news. Since the approval of these filings is still pending and may take several weeks or months, it could be a missing piece needed to fuel another rally for Ethereum and potentially other altcoins as well.
As a researcher examining the cryptocurrency market trends, I’m excited to note that Ethereum (ETH) has experienced a significant surge of more than 28% over the past week. This is an impressive gain, particularly when considering Ethereum’s recent lackluster performance compared to other major-cap crypto tokens.
Another Reason To Be Bullish On Ethereum
As an analyst, I would interpret the SEC’s approval of Spot Ethereum ETFs as a sign that the regulatory body no longer views Ethereum as a security, contrary to previous speculation suggesting otherwise.
According to a post on X, formerly known as Twitter, by TuongVy Le, the General Counsel at Anchorage Digital, funds with over 40% of their assets in securities should not use Form S-1 for registration but instead opt for either Form N-1A or Form N-2.
If the Securities and Exchange Commission (SEC) classified Ethereum (ETH) as a security, it would have denied the S-1 filings submitted by numerous fund issuers such as BlackRock. This is because these Ethereum Exchange-Traded Funds (ETFs) primarily hold ETH as their primary assets.
At the time of writing, ETH is trading at around $3,803, according to data from CoinMarketCap.
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2024-05-24 17:12