Ether ETF Approved, Why Aren’t We Rich Yet?
There may be two main reasons why the price of Ether (ETH) has barely budged despite the landmark approval of a spot Ether exchange-traded fund (ETF) in the United States.
On May 23, the Securities and Exchange Commission approved eight spot Ether ETFs for listing on their respective exchanges. Ethereum fell 3.4% just before the news, but recovered about 5% immediately afterward and is currently trading at $3,806.
Crypto critic Zach Rynes argues that the lack of movement reflects the notion that “everyone who wants to buy tokens has already done so.”
Ethereum has already surged 29% in the past week following reports that the SEC may have shifted its stance toward approving an ETF.
Rynes and many others also point out that ETFs have been approved but not yet approved for launch and require an approved S-1 filing, a comprehensive document containing details about a company’s financial and risk profile. And the same goes for the securities they are offering.
VanEck just sent the revised S-1 filing to the SEC, and analysts say it could take weeks or months to get S-1 approval again.
Rynes believes the next major price driver for Ether will be ETF inflows once trading begins.
“Net new capital inflows are still likely to come as ETFs have not actually launched yet,” Rynes wrote, while cryptocurrency research firm Second Mountain expressed a similar opinion.
“We anticipate significant capital inflows in the first week, potentially reaching billions of dollars,” Second Mountain said in a post on May 23, shortly before the SEC approved the ETF.
However, some say it may not lead to an immediate upward trend.
Bitcoin price fell 15% after spot Bitcoin ETF trading was approved on January 10th. It took 30 days for the price to surge 30% to $51,870, according to CoinMarketCap data.
Related: Ether surges 18% on renewed hopes for approval of a spot Ether ETF.
If Grayscale announces plans to convert ETHE (Grayscale Ethereum Trust) into a spot Ether ETF, there will be a significant outflow of funds, similar to the case with GBTC (Grayscale Bitcoin Trust) following the approval of the spot Bitcoin ETF in January. There still remain concerns that this could happen.
“Grayscale has also resubmitted its ETHE registration, which it had withdrawn. Remember the GBTC leak? There is now over $11 billion of ETH that has been locked up for 7 years,” warned anonymous cryptocurrency trader Rho Rider in a May 23 X post.
Since the spot Bitcoin ETF began trading on January 11, GBTC has lost a total of $17.6 billion in assets, according to Farside data.
Calm down, Ether is undervalued, it’s called maxis
“ETH is ridiculously undervalued,” Sassal, an independent Ethereum educator, added, claiming the market was just three days away from “ETF approval pricing.”
Meanwhile, Bitcoin (BTC) fell slightly by 1.2% to $67,362 following the announcement, but has since recovered to $67,706 at the time of writing.
Around the same time, PEPE (PEPE) hit another all-time high, rising 5% to $0.00001531 an hour after news of the approval broke.
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This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.
