The second largest cryptocurrency, Ethereum, has been underperforming compared to Bitcoin and Solana despite the recent market recovery. Even in the midst of a potential bull market, Ethereum players are relatively indifferent to its performance.
In recent months, Ethereum holders have watched other ecosystem users celebrate while they are left with a full bag of Ethereum, feeling despondent. However, the upcoming listing of Ethereum spot ETF may turn the tide for Ethereum.
The progress and reasons for the delay of the Ethereum spot ETF are as follows: On May 24th, the U.S. Securities and Exchange Commission (SEC) officially approved 19b-4 application documents for Ethereum spot ETFs from eight institutions, allowing these institutions to list Ethereum spot ETFs on various U.S. exchanges. However, these institutions cannot begin trading until they obtain the required S-1 registration statement approval. In short, the Ethereum spot ETF has been approved, and the listing is a foregone conclusion, but the complete process has not yet been finalized, so the opening of trading is only a matter of time.
Today (27th), Reuters cited insider information from industry executives and related participants, indicating that the SEC may approve the Ethereum spot ETF as early as July 4th. Executives of two anonymous companies revealed that the process of amending the S-1 documents has progressed to the point where only “minor issues” remain to be resolved. A lawyer working with one of the issuers also stated that the approval process is currently in the “final stage” and approval “may not exceed one or two weeks.”
Eric Balchunas, an ETF analyst at Bloomberg who accurately predicted the timing of the Bitcoin futures/spot ETF issuance, also optimistically predicted in mid-June that the SEC is likely to formally approve these ETFs next week, and he advanced the anticipated listing date of the Ethereum spot ETF to “July 2”.
The listing of the Ethereum spot ETF may provide a legal and regulated investment channel for Ethereum, allowing traditional financial institutions and investors to enter the market in a relatively safe manner, potentially driving up the price of Ethereum.
However, many ETF and cryptocurrency analysts believe that the demand for the Ethereum spot ETF is expected to be much lower than that of the Bitcoin spot ETF. Ethereum does not have a demand catalyst such as Bitcoin’s halving event, and its market trading activity is not as active as Bitcoin’s, which may lead to initial negative market reactions to the Ethereum spot ETF and put downward pressure on the price of Ethereum.
It is expected that within the first five months of the listing of the Ethereum spot ETF, the inflow of funds will be between 3 billion and 4.8 billion US dollars, demonstrating strong market demand. Research indicates that the new ETF will absorb between 750,000 and 1,000,000 ETH, which is equivalent to 0.65-0.85% of the circulating supply of ETH.
In addition, it is worth noting that the SEC’s decision to end its investigation into Ethereum, combined with the optimistic expectations for the launch of the Ethereum spot ETF, has led to a rebound in the price of Ethereum and its series of tokens.
Despite the overall market downturn, the flow of ETH and BTC investment tools has formed a sharp contrast. Optimistic expectations for the launch of the U.S. Ethereum spot ETF have led to a net inflow of 16,911 ETH for global ETH ETPs for the fourth consecutive week, while BTC ETPs saw a net outflow of 12,523 BTC last week.
In conclusion, the probability of Ethereum reaching $5000 is still very high after the listing, and those who hold spot Ethereum and endure this challenging market will see great rewards.
