Despite the groundbreaking approval of spot Ether exchange-traded funds (ETFs) in the United States, the price of Ether has seen minimal movement. On May 23, the U.S. Securities and Exchange Commission (SEC) gave the green light to eight spot Ether ETFs for listing on their respective exchanges. Just before the news broke, Ether (ETH) experienced a 3.4% drop, but it quickly recovered by around 5%. As of now, ETH is trading at $3,806.
Crypto commentator Zach Rynes speculates that the lack of significant price movement can be attributed to the fact that “everyone who wanted to buy the approval already did.” In the week leading up to the announcement, Ether had already surged by 29% following reports suggesting a potential shift in the SEC’s stance on ETF approvals.
Rynes and others have also pointed out that while the ETFs have been approved, they still require clearance to launch. This necessitates an approved S-1 filing, a comprehensive document that includes details about the firm’s financials, risk profile, and the securities they intend to offer. VanEck has recently submitted its amended S-1 filing to the SEC, and analysts estimate that it could take weeks to months for the S-1 approvals to be granted.
Rynes believes that once the ETFs start trading, they will serve as a significant force driving the price of Ether. He stated, “ETFs haven’t actually launched yet, so net new capital inflow is still to come.” Crypto research firm Second Mountain shares a similar sentiment, stating in a May 23 post that they expect a massive capital inflow in the first week, potentially reaching billions.
However, some experts caution that the approval of ETFs may not immediately lead to an upward trend in the price of Ether. When spot Bitcoin ETFs were approved for trading on January 10, the price of Bitcoin dropped by 15%. It then took 30 days for the price to spike by 30% to $51,870, according to CoinMarketCap data.
There are also concerns surrounding Grayscale’s announcement of its plans to convert its Grayscale Ethereum Trust (ETHE) into a spot Ether ETF. Similar to the Grayscale Bitcoin Trust (GBTC) after the approval of spot Bitcoin ETFs in January, there could be significant outflows from ETHE. Pseudonymous crypto trader Rho Rider warned that “Now it’s $11B+ ETH that’s been trapped for 7 years,” referring to the potential impact on ETHE.
Despite the current minimal movement in price, some Ethereum proponents argue that Ether is undervalued. Independent Ethereum educator Sassal stated, “ETH is stupidly undervalued,” suggesting that the market has only had three days to fully “price in the ETF approval.”
In contrast, Bitcoin (BTC) experienced a slight stumble of 1.2% to $67,362 following the announcement but has since recovered to $67,706. Additionally, Pepe (PEPE) reached a new all-time high of $0.00001531, representing a 5% increase within an hour of the approval news.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.