Ethereum price surges on hopes that Bitcoin ETF breakthrough will open the door for ETH ETF

Following the approval of spot Bitcoin ETF (exchange-traded fund) in the United StatesThe possibility that an Ethereum ETF could be next has sparked a wave of investment into the ETH market.

ETH, the second-largest cryptocurrency by market capitalization, has surged 13.5% in the past 24 hours to trade at $2,596 at 12:21 PM ET. Interest in Ethereum-based projects and Layer 2 (L2) projects has also surged.

This is best seen in the performance of L2 tokens such as Arbitrum (ARB), Optimism (OP), Polygon (MATIC), Immutable X (IMX), SKALE (SKL), and Mantle (MNT).

Martin Lee, a Nansen analyst on Telegram, said the “largest smart money inflow” has flowed into the Ethereum ecosystem in the past 24 hours.

So will the ETH ETF be next?

Bloomberg Intelligence analyst Eric Balchunas said there was a 70% chance of approval for a spot Ethereum ETF, while Steven McClurg, chief investment officer at Valkyrie Funds, said on Bloomberg TV that he wouldn’t be surprised if an ETH ETF hits the market.

“The SEC’s approval of the Bitcoin ETF opens the door for other cryptocurrencies,” said Lucy Ho, senior analyst at Metalpha.

🚨News: @ValkyrieFunds chief investment officer @stevenmcclurg He said he wouldn’t be surprised to see Ripple ($XRP) and Ethereum spot ETFs hitting the market now. @SECGov Approval for Bitcoin is expected to be approved soon. pic.twitter.com/EBcwvbgChs

— Eleanor Terrett (@EleanorTerrett) January 9, 2024

The Ethereum ETF Competition Has Begun

The Ether ETF campaign is in full swing, with BlackRock, Fidelity, VanEck, Ark 21Shares, Hashdex, Grayscale, and Invesco Galaxy already submitting applications.

#Bitcoin ETF = ✅#Ethereum ETF =❓

Spot deadlines are as follows: $ETH Apply for ETF.

The first final deadline is May 23rd. #Ethereum Immediately after ETF approval #Bitcoin bisector? 🤔

Can this year be any better? LFG ✌️ pic.twitter.com/22C0UcV1uu

— Crypto Land (@crypto_rand) January 11, 2024

Still, the Securities and Exchange Commission can be a formidable obstacle to such approval. Chairman Gary Gensler said yesterday that approval of a spot Bitcoin ETF “in no way signals the Commission’s commitment to approving standards for listing crypto asset securities.”

And Gensler has previously said he considers all cryptocurrencies except Bitcoin to be securities. However, there may be hope because in a 2018 speech, William Hinman, the regulator’s former director of corporate finance, said that Ethereum may not be a financial security given its decentralized nature.

The next deadline for an SEC decision on the spot Ether ETF is May 23.

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