Ethereum
Experts weigh in on how high Ethereum could reach with ETF approval
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Tomorrow is the final deadline for approval of VanEck’s spot Ethereum exchange-traded fund (ETF) in the United States, and expectations are high. James Seyffart, analyst at Bloomberg ETF sharing that an approval movement “is happening,” despite regulatory indicators pointing in the opposite direction through Monday.
As a result, Ethereum (ETH) surged 21% in less than 48 hours and is only 22% higher than its all-time high of $4,878.26. according to to data aggregator CoinGecko. Bitcoin (BTC) surged 96% in two months before the first spot Bitcoin ETF was approved in the United States and hit its all-time high two months later.
James Davies, co-founder and CPO of Crypto Valley Exchange, points out that Bitcoin’s case was different. “In this case, however, everything came together – the ETFs, the bitcoin halving, and the significant decrease in global inflation – and lined up to boost Bitcoin. Ethereum has already seen a crypto cycle and increase in global market sentiment,” he shares.
Although Davies believes that Ethereum ETF inflows will have a substantial impact, propelling ETH to new all-time highs, it could be difficult for Ethereum to replicate BTC’s movement after funds are approved. “This does, however, present a nice steady growth story for the remainder of 2024.”
Ruslan Lienkha, Head of Markets at YouHodler, also shares the view that an Ethereum ETF could trigger a sharp increase in the price of ETH. Additionally, this move may not be fully priced in, and there is still significant upside potential to be observed. “If so, it will be a powerful boost for the entire crypto market and a stimulus for the growth of other coins,” Lienkha added.
Bitfinex analysts believe that an Ethereum ETF spot approval could play out similarly to the Bitcoin ETF spot approval, which was “a sell-off event before a long-term bullish outlook term is triggered, causing a rally over several months. As for inflows, they expect a similar level consistent with the ETH market capitalization.
The current move from below $3,000 to $3,800 is the result of the market pricing in higher probabilities of ETF approval. Importantly, market participants often anticipate and assess ratings as absolute – implying that a 75% approval probability by Bloomberg analysts could potentially be rated at 100%.
Marko Jurina, CEO of Jumper.Exchange, highlighted that BTC increased by almost 65% following spot Bitcoin ETF trading in the United States. Thus, a similar move would propel ETH “well beyond its previous all-time high.” Zentner also believes that the approval could trigger growth in the crypto market for the second half of 2024.
And if…?
Despite the optimism regarding the approval of the Ethereum ETF, there is still a slight risk of rejection. Moreover, as Underlines According to Seyffart, a good portion of investors misunderstand the current movement since approval does not translate into immediate negotiation. These two scenarios could then upset investors.
However, in light of recent developments, these events are now undervalued, says James Davies of Crypto Valley Exchange. On the other hand, Marko Jurina from Jumper.Exchange believes that both possible negative events are already taken into account.
“When BTC spot ETFs first hit the market, there was actually a brief sell-off where some took profits before the rally resumed. Additionally, given the volatile nature of the market, both good and bad news give market makers plenty of opportunities to create more violent price swings, so blood in the streets is entirely possible. More problematic for the ETH community (in the absence of approval) would be the loss of a narrative as a catalyst,” Jurina added.
Additionally, a slight decline followed by a period of consolidation is also a possibility, shares Ruslan Lienkha of YouHodler. “The approval of the Ethereum ETF is only a matter of time. The SEC will approve it sooner or later after the status of ETH is clarified, and it doesn’t matter if it is recognized as a commodity, security or something else. For now, basically nothing will change for ETH. It will remain the second crypto in the sector even without an ETF.
Even if an unlikely rejection occurs, Bitfinex analysts describe a “tiered” scenario, which could result in a “hard rejection” or a “soft rejection.” A hard rejection would involve ETH being considered a security, while a soft rejection would be limited to ETF proposals.
“The first could be very bearish, leading to a retracement of the entire current upward movement. The latter could lead to more speculation about future recall approval,” Bitfinex analysts concluded.
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