Ethereum, the world’s second-largest cryptocurrency by market capitalization, has experienced a significant rally, recently reaching a weekly high of $3,838 before stabilizing around $3,800. This surge, approximately 20% over the past few days, is fueled by growing optimism that the U.S. Securities and Exchange Commission (SEC) might soon approve one or more exchange-traded funds (ETFs) that invest directly in Ethereum.
The cryptocurrency market has been abuzz since the SEC approved spot Bitcoin ETFs earlier this year. Investors are now eagerly awaiting a similar decision for Ethereum. VanEck was the first to seek SEC approval for a spot Ethereum ETF, with ARK Invest joining this week, according to Cryptomind, a Thai digital asset services and investment product developer.
Ethereum has been outperforming Bitcoin recently, reaching a new weekly peak of $3,838 before settling at around $3,800. The SEC faces an August 7 deadline to decide on BlackRock’s iShares Ethereum Trust, which is considered to have a higher likelihood of approval compared to other funds.
Cryptomind suggests that if the SEC approves spot Ethereum ETFs, there might be a short-term profit-taking phase for Ethereum. However, the long-term outlook remains bullish, with institutional funds expected to flow into Ethereum, mirroring the trend observed after the approval of Bitcoin spot ETFs. Prices are anticipated to rise further in June and July as the approval deadline approaches.
Ether, the native token of the Ethereum blockchain, plays a crucial role in the cryptocurrency ecosystem. Ethereum is a leading platform for decentralized financial services, enabling investors to trade, borrow, and lend through automated software protocols, bypassing traditional intermediaries.
On Monday, Bloomberg Intelligence increased its estimated probability of SEC approval for a spot Ether ETF from 25% to 75%. This optimistic forecast contributed to a nearly 14% rise in Ethereum’s value on the same day, marking its steepest advance since November 2022. The token continued to climb, trading at $3,675 on Tuesday. Bitcoin, meanwhile, approached $72,000, nearing its all-time high of nearly $74,000 set in mid-March.
Despite the positive sentiment, some fund companies remain cautious. They anticipate potential rejections of their Ethereum ETF applications due to less robust private discussions with the SEC compared to those preceding the approval of Bitcoin ETFs. BlackRock and Fidelity Investment, both heavyweights in the financial sector with $58.8 billion in assets, are among the firms seeking to launch Ether funds. The digital asset industry views ETFs as a crucial mechanism for expanding the cryptocurrency investor base to include retail investors, hedge funds, pension funds, and banks.
As the SEC’s decision deadline approaches, the market remains on edge, with investors closely monitoring developments that could significantly impact Ethereum’s valuation and broader market dynamics. The anticipation of potential ETF approvals continues to drive positive momentum, underscoring the growing mainstream acceptance of cryptocurrencies.
