The cryptocurrency market is abuzz, but not with anticipation for Ethereum. Unlike Bitcoin, Ethereum’s upcoming exchange-traded funds (ETFs) are being met with skepticism and uncertainty. Traders are exercising caution, unsure if Ethereum will follow in Bitcoin’s footsteps or falter under its own weight.
As of May 20, Ether had already experienced a 15% decline over two months. However, once rumors of SEC approval for Ethereum ETFs surfaced, Ether saw a 29% surge in just three days. Currently, according to data from TradingView, it is trading at $3,755.
Experts in the field lack confidence in Ethereum. Matthew Hyland, a well-known crypto trader, expressed his thoughts, stating that there is a lower likelihood of a sell-off following the approval of the Ethereum ETF compared to the Bitcoin ETF. Unlike Ether, Bitcoin did not undergo a price decline leading up to the approval of its spot ETFs in January.
Farside supports this sentiment, noting that since the launch of spot Bitcoin ETFs, Grayscale Bitcoin Trust (GBTC) has lost $17.6 billion in assets. Michaël van de Poppe, a renowned analyst, shares a similar view, stating, “It’s a waiting game until the listing takes place, and then the influx of investors will determine if there will be a strong upward trend.”
There are also concerns surrounding Grayscale’s plans to convert its Ethereum Trust (ETHE) into an ETF. This move could create selling pressure and impact the price of Ether. Hyland stated, “One key similarity is both have a Grayscale product. The Grayscale ETF led to selling pressure for BTC, and we will likely see the same for the ETH ETF once it is listed.”
Despite these concerns, Hyland predicts a bullish outlook for Ether’s price. He highlights that Ether reached local highs of $4,092 in March without any news of spot Ether ETF approval. The highest price of the year occurred just before ETF analyst Eric Balchunas reduced his approval expectations for spot Ether ETFs to 25%.
One significant challenge for Ethereum is its messaging. Unlike Bitcoin, which is often referred to as “digital gold,” Ethereum lacks a simple and catchy phrase to attract investors, particularly those from the baby boomer generation. James Check, a lead analyst at Glassnode, addressed this issue in a post, stating, “Ethereum still lacks an elevator pitch, despite years of attempts.”
Bloomberg ETF analyst Eric Balchunas adds to this point, noting that Ethereum does not have a straightforward selling point that investment managers can easily present to older investors. “Bitcoin is digital gold,” he stated. The message for Ethereum is not as clear.
Various individuals in the cryptocurrency industry have proposed their own pitches for Ethereum. Adam Cochran, a partner at Cinneamhain Ventures, describes Ethereum as “digital oil,” stating, “It’s the fuel that powers decentralized protocols. It’s productive and generates yield.”
In conclusion, Ethereum faces skepticism and challenges as it prepares for its ETFs. Traders remain cautious, unsure of its future trajectory. However, despite these concerns, there is still optimism for Ether’s price, and the industry continues to search for the perfect pitch to attract investors.
