jakiro
Recently, the trend of Ethereum spot ETFs has reversed sharply, which has caused high attention from the market and regulatory levels. Based on the optimism of the US approving the trading fund Ethereum spot ETF, Ethereum’s price rose sharply this week, with the current price of US$3,807.
Although the reasons behind the sharp wind direction are still controversial, market observers and senior cryptocurrency practitioners generally believe that the regulatory approval will have varying degrees of impact on Ethereum and other cryptocurrencies.
It is reported that asset management company VanEck is the first brokerage company to submit an Ethereum spot ETF application to the U.S. Securities and Exchange Commission (SEC). The 19b-4 document application results will be generated around 4 a.m. Beijing time on May 24, firstLet’s take a look at the views of 7 industry veterans on this matter and their subsequent impact.
Digital Asset Management Company: Galaxy Digital
Galaxy Digital CEO Mike Novogratz said in an interview with CNBC that the “large-scale” turn in Washington overturned the game of Ethereum spot ETF.
He believes that if the SEC changes were politically motivated, then “it would be a huge shift.””If this is the case, the price (in the cryptocurrency market) will be much higher than it is now.”
On top of that, he said that as Trump leads Biden in polls, the cryptocurrency super PAC has raised more than $150 million to push candidates to support the industry (such as in some swing states), DemocratsThe disgust of cryptocurrency is becoming increasingly untenable, “In fact, it was Democratic Massachusetts Senator Elizabeth Warren and a small group of people who tied Democrats to this matter.”
“There is no reason to turn the cryptocurrency technology into a downright political issue,” Novogratz added.
Ethereum core organization: Consensys
Joseph Lubin, co-founder of Ethereum and founder of Consensys, crypto infrastructure company, said Ethereum is expected to experience “massive demand”, which could lead to a tightening supply and push up its prices.
Lubin told the media that institutions that have been exposed to Bitcoin ETFs “will likely want to diversify their investments in the second approved ETF.”He said, “Buying Ethereum through ETFs will create considerable natural, suppressed pressure.”He added that supply to meet this demand will be reduced compared to when the spot Bitcoin ETF was approved in January.
In terms of Bitcoin, authorized participants (i.e., companies that sign contracts to buy Bitcoin on behalf of ETFs when new shares are created every day) can simply purchase idle Bitcoin on exchanges or through an OTC counterparty.But on-chain data shows that more than 27% of Ethereum has been pledged, that is, it is locked in the contract and earns profits for its owners.
“Most of Ethereum plays a role in core protocols, DeFi systems, or DAOs (decentralized autonomous organizations),” Lubin notes, not only does Ethereum market capitalization be lower than Bitcoin — which makes Ethereum’s price pointThe response to inflows is more sensitive—and a large portion of its supply cannot be used to trade spot ETFs.
Fund Management Giant: Bitwise
“Cryptocurrencies are becoming mainstream, and this progress will push cryptocurrencies to record highs,” Matt Hougan, chief investment officer of asset management giant Bitwise, wrote in a blog post this week.
But Hougan said the catalyst is not a sudden optimism about Ethereum spot ETFs.”A big thing happened in Washington: a bipartisan group of senators and representatives passed the first legislation in Washington’s history to support cryptocurrencies.” He mentioned the bill to repeal the SEC SAB 121 policy, which is on cryptocurrencies.Hosting imposes strict rules.
“Whether we have approval from the Ethereum spot ETF or not, the latest support for cryptocurrencies in Washington, D.C. is obvious,” Hougan added.
Blockchain infrastructure platform: Swarm
Timo Lehes, co-founder of blockchain infrastructure platform Swarm, believes that once the Ethereum spot ETF is approved, “capital will flow into” Ethereum.
“Once you configure Bitcoin, you also look for something else as part of portfolio diversification,” he told the media.“Investors will naturally choose ETH as a key position allocation for the next crypto asset. Although this may pale inflows compared to the Bitcoin spot ETF launched in January this year, it is still enough to change its price trend.”
Data analysis platform: Kaiko
Adam McCarthy, an analyst at Kaiko, a data analytics platform, said options traders who flocked around call options are now seeking higher returns, but investors should be cautious.He said:“The demand for Ethereum spot ETFs in Hong Kong is not large, and it has experienced several days of net outflows. The lack of pledge channels for Ethereum spot ETFs is also an important factor and may further affect demand.”
He suggested focusing on Grayscale’s $9 billion ETHE product, “If it starts to have a large amount of capital outflow, that will have a significant impact on Ethereum’s price.”
Analytical Research Company: Bernstein
According to estimates by Gautam Chhugani and Mahika Sapra, analysts at analytics research firm Bernstein, whose total assets are $725 billion, the approval of the spot Ethereum ETF will drive Ethereum prices to soar by about 75% to a maximum of $6,600.
They noted that the SEC approved similar Bitcoin spot ETF products in January, and three months later, the incident stimulated Bitcoin price to rise by about 75%, reaching an all-time high of $73,000.
“We expect the price trend of ETH will also be similar,” Chhugani and Sapra said in a report this week.
It is worth mentioning that in November 2021, Ethereum set a record high of US$4,878. If it can really reach US$6,600, Ethereum price will once again break the record high.
