Bitcoin
Ethereum Price Rises 22% as ETF Approval Odds Rise, Bitcoin Record Possible
- Ethereum has jumped in the last 24 hours as chances of an imminent ETF approval have increased.
- Positive signs have come from the SEC, which needs to make a final decision on two proposals this week.
- The approval could also be a catalyst for bitcoin to reach new records, according to Standard Chartered.
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Ethereum soared 22% on Tuesday on rising confidence that cryptocurrency-linked ETFs could be approved as soon as this week.
Just as was done for Bitcoin In January, efforts were made to establish an Ethereum spot exchange-traded fund, making the cryptocurrency available to a wider range of investors.
Although investors have long expected regulatory resistance, the Securities and Exchange Commission recently asked potential issuers to update their registrations, Bloomberg reported. That’s a positive sign ahead of decision deadlines for at least two spot ETFs, one from VanEck and the other from Ark 21Shares.
The odds of approval, according to Eric Balchunas, an ETF analyst at Bloomberg Intelligence, jumped from 25% to 75% in a single day on Monday. Meanwhile, the chances of approval by May 31 increased from 10% to 61% in the Polymarket betting platform.
According to Geoff Kendrick, head of foreign exchange research at Standard Chartered, the ETF approvals would cement Ether’s chances of reaching $8,000 by the end of this year.
The optimistic forecast has been maintained since March, arguing that approval of the funds would generate inflows of US$15 billion to US$45 billion into the token. Eventually, Ether could reach $14,000 by the end of 2025, he reiterated in new research on Tuesday.
Furthermore, ETFs would largely avoid the same situation as bitcoin funds, which have seen outflows and considerable price swings after an initial period of expansion, he added.
On the one hand, Kendrick says inflow volatility will be minimal because Ether lacks investment alternatives that can compete with ETFs, such as an Microstrategy equivalent. This company’s huge inventory of bitcoins means its shares move in line with the token.
Secondly, large exits are also less likely to be a problem for Ether, Kendrick highlighted. This was a challenge for bitcoin after its ETFs hit the markets, as the funds became Bitcoin’s main competitors. Pre-existing Grayscale Bitcoin Trustleading to a wave of sales.
“The ETH Grayscale Trust is smaller by percentage of market capitalization than BTC, so any forced selling, as occurred with BTC after the ETF was approved, should be less important,” Kendrick said in written comments.
Once Ether funds are established, the high prices they could reach bode well for Bitcoin, Kendrick added. The apex token has already jumped 6.7% this week due to Ether gains.
“An approval of the ETH ETF will further legitimize the sector and therefore also be positive for BTC. I would expect a new all-time high in BTC over the weekend (up to the $73,798 level from March 14),” Kendrick wrote.