Ethereum ETFs Expected by July, SEC Filings Hint
In A Nutshell
Analysts anticipate the final approval and commencement of trading for Ethereum (ETH) Exchange-Traded Funds (ETFs) potentially by July, marking a significant development in the cryptocurrency market. This projection is based on the recent approval of spot ETH ETFs’ 19b-4s filings by the Securities and Exchange Commission (SEC), with expert opinions suggesting that the S-1s (registration statements) could receive the green light within 2-3 months. A spotlight is also on Grayscale’s Ethereum Trust (ETHE) as the market speculates on possible outflows following the approval, similar to those observed with Grayscale’s Bitcoin Trust (GBTC).
Timeline for Ethereum ETF Approval
Nate Geraci of ETF Store and Bloomberg ETF analyst Eric Balchunas have both projected that the SEC’s final approval of Ethereum ETFs could occur in the near future, with July posited as a probable date. These projections come after the SEC’s green light on spot ETH ETFs’ 19b-4s filings, indicating a forward momentum for Ethereum in the investment sphere.
Impact on Grayscale’s Ethereum Trust
The market’s focus shifts to the response of Grayscale’s Ethereum Trust, especially in consideration of past trends where the approval of spot Bitcoin ETFs led to significant outflows from GBTC. In January, GBTC experienced $6.5 billion in outflows. Analysts speculate whether ETHE will face similar trends, with projections suggesting possible outflows amounting to $110 million on a daily average, equating to 30% of ETH’s average daily volume on Coinbase. However, the potential launch of Grayscale’s low-fee Mini Trust for Ethereum may counteract significant outflows.
Technical Outlook for Ethereum
Ethereum’s price analysis shows a bearish RSI divergence on the 4-hour chart, indicating a possible pullback. The digital currency might retrace to its 50-day EMA around $3.68K or find support near $3.6K before potentially rebounding to the resistance zone and daily bearish order block at $4K.
Our Take
The potential approval of Ethereum ETFs within the next few months represents a pivotal moment for Ethereum and the broader cryptocurrency market. It signifies a growing acceptance and integration of cryptocurrency in traditional financial systems. However, the impact on existing investment vehicles like Grayscale’s Ethereum Trust remains to be fully understood. While there may be concerns over possible outflows, the introduction of new investment products could also attract a broader base of investors, mitigating significant negative impacts. It is a development that warrants close monitoring as it unfolds, offering both challenges and opportunities for investors.
Sources
– AMBCrypto
– Kaiko Insights
– ETH/USDT, TradingView
