Ethereum
Seven experts on what an Ethereum ETF nod means for crypto prices – DL News
- What will an Ethereum ETF mean for the markets?
- Mike Novogratz of Galaxy and Joe Lubin, co-founder of Ethereum, are among the experts speaking.
Ethereum soared this week amid optimism over U.S. approval of exchange-traded funds that track the cryptocurrency.
The reasoning behind this sudden turnaround is up for debate, but market observers generally agree on what a nod from the regulator would do for Ethereum and other cryptocurrencies.
Asset manager VanEck is the first Ethereum ETF application on the Securities and Exchange Commission’s stack, due May 23.
Here’s what the experts say.
Galaxy’s Mike Novogratz
A “widespread” pivot in Washington over the last 24 hours has just shaken up the Ethereum ETF game, said Mike Novogratz, CEO of Galaxy Digital.
If the SEC’s change of heart was politically motivated, “this is a seismic shift,” Novogratz said.
“If this is what actually happened, prices will be much higher than here.”
Joe Lubin of Consensys
Expect a “deluge” of demand for Ether, which will likely lead to a supply crunch and drive up prices, according to Joe Lubin, co-founder of Ethereum and founder of crypto infrastructure company Consensys.
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Institutions that have already had exposure to Bitcoin ETFs “will likely want to diversify into this second approved ETF,” Lubin said. DL News.
“There’s going to be quite a lot of natural and pent-up pressure to buy Ether” through ETFs, he said. He added a caveat that there will be less supply to meet this demand than when spot Bitcoin ETFs were approved in January.
Matt Hougan of Bitwise
“Crypto is going mainstream and these advancements will push crypto to unprecedented heights,” Matt Hougan, Bitwise’s chief investment officer, wrote in a blog post this week.
But Hougan suggested the catalyst wasn’t sudden optimism about ETFs.
“Something remarkable happened in Washington: a bipartisan group of senators and representatives passed the first pro-crypto bill in Washington history.”
He referenced the bill to repeal SEC Policy SAB 121 which imposed strict crypto custody rules.
“This new support for crypto in Washington DC – whether or not we get one-time approval of Ethereum – is the latest evidence,” Hougan said.
Timo Lehes of Swarm
Timo Lehes, co-founder of blockchain platform Swarm, sees “significant capital inflows” into Ethereum once an ETF is approved.
“Once you invest in Bitcoin, you also turn to something else as part of portfolio diversification,” he said. DL News. “Naturally, investors are choosing eth as the next largest crypto asset.”
Although inflows will likely pale in comparison to those of the Bitcoin ETF when it launches in January, “it will still be enough to move its price action.”
Kaiko
Options traders who “rallied” around bullish options are now eyeing gains, said Adam McCarthy, an analyst at Kaiko.
But investors should be careful, Kaiko said: “Hong Kong ETFs have not seen much demand and have had a mixed few days with several days of net outflows already. The lack of staking is also a big factor and likely has a further impact on demand.
He suggested monitoring Grayscale’s $9 billion ETHE product, “if it experiences significant capital outflows, it would have a significant impact on prices.”
Bernstein
Approval of spot Ethereum ETF will lead to 75% surge to $6,600, says estimates produced by Gautam Chhugani and Mahika Sapra, analysts at the Bernstein research firm.
They noted that the SEC’s approval of similar Bitcoin products in January led to a 75% surge in the following weeks.
“We expect similar price action for ETH,” Chhugani and Sapra said in a report this week.