The approval of all spot Ethereum ETFs by the United States Securities and Exchange Commission (SEC) has been a highly anticipated event in the cryptocurrency market. Many believed that this approval would be the catalyst for a bullish run in 2024. However, despite these expectations, the market is currently experiencing a downturn.
All the top ten cryptocurrencies have seen a decline in value over the past day, even though they were performing well before the approval. This pattern is similar to what happened in January when the approval of spot Bitcoin ETFs led to a market plunge.
So, why is the crypto market down today?
Just before the SEC made its decision, the market experienced $120 billion in liquidations and Bitcoin fell below its critical support level of $70,000. However, Ethereum remains above its key level of $3,500. On-chain metrics indicate a significant influx of cryptocurrencies into exchanges, which is typically a sign of an impending market correction.
Some members of the crypto community believe that Ethereum ETFs, like their Bitcoin counterparts, were not going to have a significant impact on the market. It seems that the regulatory developments did not stabilize the market as expected.
Experts predicted the price drop, as it is a common reaction to highly anticipated events. Investors often take advantage of the news by selling off their holdings. Additionally, broader economic factors such as rising US Treasury yields and delays in expected Federal Reserve rate cuts have contributed to a risk-off sentiment in the market.
Despite the current downturn, experts like CryptoQuant and Faibik remain optimistic about the future of Bitcoin, with expectations that it will surpass $100,000 this year. Michael van de Poppe, a prominent expert, predicts that Bitcoin will reach $200,000, and institutions like Standard Chartered and Bernstein expect Bitcoin to hit $200,000 and Ether to top $7,000 in the long term.
This week has seen some positive developments for the crypto market. The US House of Representatives passed the FIT21 bill, which aims to legalize blockchain and cryptocurrencies in the country. Additionally, the Federal Reserve has been banned from creating a central bank digital currency (CBDC). Experts have long been critical of CBDCs, citing concerns about privacy and government surveillance.
The SEC’s approval of all eight Ethereum spot ETFs is considered the biggest news of all, and experts predict that it will lead to increased volatility in the market.
Overall, while the current market is experiencing a downturn, there are still positive indicators for the future of cryptocurrencies.
