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Author: Dilin Massand Source: unchainedcrypto Translation: Shan Oppa, Bitchain Vision
At a recent budget hearing, SEC Chairman Gary Gensler told Senators that approval of the U.S. spot Ethereum ETF should be completed by the end of the summer.So, before and after this, how does the market view the price trend of Ethereum?
When the SEC approved Form 19b-4 for eight different spot Ethereum exchange-traded funds (ETFs), Ethereum’s price soared nearly 20% in a few hours.
Now, ETF applicants are submitting their S-1 registry that require approval from securities regulators to start trading on the exchange.Gensler told the Senate Appropriations Committee Thursday that the process is expected to be completed by the end of the summer.
Gensler said these registrations are under review “employment level” and still depend on the issuer and how much it responds to any comments.With the decision-making power in the hands of ETF issuers, how does the market view the price trend of Ethereum before and after this?
Investment management company VanEck’s spot Ethereum ETF application is one of eight to be approved for Form 19b-4, and recently raised their target price for Ethereum to $22,000 in 2030.But Katie Talati, research director at crypto asset management firm Arca, said in an email to Unchained that “Ethereum is more difficult than the rise of other first-tier and second-tier solutions in building a strong narrative.”
Ethereum’s short-term price forecast (before going online)
In the near term, this lack of narrative could bring some boost to Ethereum — although it may not be as high as $22,000 — because traders have lower positions on the asset at the time of the approval announcement.
“Coinbase Institutional’s buying volume on Ethereum has increased since the approval of 19b-4,” David Duong, head of trading desk at Coinbase Institutional, said in an email. “This has not reached the point where we are in spot stocks,” he said.Bitcoin ETFs saw so radically before the launch of the U.S.. This leads us to think the market is still under-positioned.”
For Bitcoin, this is a “buy rumors, sell news” event, as there was a lot of speculation before the Bitcoin ETF approval in January.In the case of Ethereum, Glen Goodman (the author of the book “Crypto Trader”) said in an email to Unchained that “the traders did not sell the news – they bought it” because of the approved newsUnexpectedly.
Investors still need to be cautious, Katie Stockton’s Fairlead Strategies pointed out in a June 10 report that Ethereum has given up some of its excellent performance relative to Bitcoin since the spot Ethereum ETF news.Analysts expect Bitcoin to continue to outperform Ethereum in the near term, their analysis of Ethereum’s weekly MACD and stochastic indicators is neutral, adding that once Ethereum breaks through $3,925 resistance based on a continuous weekly closingThey will take a bullish position.
Ethereum long-term price forecast (after release)
After a pullback after ETF approval, “Bitwise rose from $39,201 to $67,339, and eventually hit an all-time high in March 2024, with a 72% increase.” Teddy Fusaro, president of Bitwise, said the company launched in the U.S.Spot Bitcoin ETF.
If that happens, Ethereum will need to rise more than 35% from its current price to reach its all-time high of $4,867 in November 2021, Fusaro said.
While this may be reasonable, Arca’s Katie Talati does not believe that spot Ethereum ETFs will have a substantial long-term impact on Ethereum prices, as institutional demand is not as high as Bitcoin.
In a previous interview with Unchained, Ophelia Snyder, co-founder and president of crypto ETP provider 21Shares, mentioned that institutions have a far different understanding of Ethereum than Bitcoin.21Shares manages 21Shares Ethereum Staking ETP (AETH) in Europe and a spot Bitcoin ETF (ARKB) in the United States.
Talati also noted that “Grayscale Ethereum Trust, which manages $10 billion in assets, may also experience continuous capital outflows, causing daily selling pressure in the Ethereum market.”
A recent report from crypto research firm Kaiko expresses a similar view.“Once the Ethereum ETF is launched, Ethereum’s selling pressure is expected due to the possibility of outflows or redemptions of Grayscale’s ETHE, which is expected. ETHE’s trading discounts have ranged between 6% and 26% in the past three months..”
Nevertheless, Vetle Lunde, senior analyst at crypto research firm K33, predicted in a recent report that the U.S. spot Ethereum ETF will attract $4 billion in net inflows in the first five months of its launch.In a message to Unchained, Vetle explained that he expects about 20% of the $4 billion will come from institutional investors and expects the assets under management to reach $700 million to $800 million.
While some questioned whether the lack of staking in Ethereum ETF would limit investors’ interest in funds due to the lack of APY (annual percentage yield), Lunde does not consider it a problem, writing:99.1% of AUMs hold non-staking products, while 97.9% of Europe’s AUMs hold non-staking ETP. This shows that staking is not a major issue among ETP investors.”
In April this year, the Hong Kong Securities and Futures Commission approved the transaction of spot Ethereum ETFs and Bitcoin ETFs.Taking the Hong Kong market as a reference, Noelle Acheson, author and economist at Crypto Is Macro Now, wrote in a recent newsletter, “When/if the Ethereum spot ETF is finally launched, we should be prepared for a poor response.Acheson’s forecast is based on the fact that Ethereum accounts for less than 15% of the total spot crypto ETF AUM since these securities began trading in Hong Kong.
Pranav Kanade, portfolio manager at VanEck’s Digital Assets Alpha Fund, also believes that interest in spot Ethereum ETFs may not grow as explosively as Bitcoin, he wrote in an email to Unchained, “Bitcoin’s narrative is particularly perfect in the United States.Land fit…and Ethereum ETF does not have such astrological sign.”
Nevertheless, Kanade said their bullish forecast for Ethereum in 2030 assumes ETFs will serve as a catalyst for further focus on the Ethereum network and its various applications such as stablecoins and other tokenized financial assets.“This in turn will drive increased activity on Ethereum or its second layer solution, resulting in more Ethereum being destroyed and a decrease in total supply,” Kanade said.
