Ethereum
Ethereum ETFs have been approved – so why isn’t the price of Ether skyrocketing? – DL News
- The SEC approved Ethereum spot ETFs in almost official terms on Thursday.
- But the price of Ether is struggling to rise.
- This could be due to inflationary fears.
Even with the approval of Ethereum spot ETFs in the United States last week, Ether is struggling to reach new highs.
The second-largest cryptocurrency was recently trading at $3,840, about the same price as Thursday when the Securities and Exchange Commission approved Ethereum spot exchange-traded funds.
How come? According to Noelle Acheson, former head of market research at Genesis Global Trading, the price of Ether is bogged down by ongoing inflation fears.
Manufacturing sector drives up inflation
Much like Bitcoin, Ethereum is sensitive to global macroeconomic forces, Acheson wrote in its newsletter, “Crypto is Macro Now.”
On Thursday, as the crypto industry celebrated the SEC’s approval of Ethereum ETFs, the release of S&P Global’s Purchasing Managers’ Index – or PMI, an indicator that provides insight into manufacturing and services – showed “pretty astonishing” figures.
“It appears the U.S. economy is expanding, with manufacturing joining services to keep inflation high,” Acheson said.
This is a problem for Bitcoin and Ethereum. The Federal Reserve has maintained relatively high interest rates in an effort to combat inflation.
High rates deter investors from risky investments, like crypto and tech stocks, because they can earn high returns through risk-free Treasuries.
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“It looks like rates are really going to be ‘higher for longer,'” Acheson wrote, noting that expectations of lower rates have moved further away from two weeks ago.
Quinn Thompson, founder of crypto hedge fund Lekker Capital, also said This crypto mania won’t happen until the US dollar weakens – which will likely happen when the Fed cuts rates.
Crypto market players
- Bitcoin is down 2.9% in the last 24 hours, trading at $68,000.
- Ethereum fell 2.3% over the same period to $3,840.
What we read
Tom Carreras is a markets correspondent for DL News. Do you have a tip on Bitcoin ETFs? Contact us at tcarreras@dlnews.com