Does political pressure have an impact on the SEC deciding to allow spot Ether exchange-traded funds? If so, what does that mean for the cryptocurrency community?
EthereumETH( ) is on a strong run. It was trading at around $3.760 by May 22. This represents a 28% gain over the last week.
This rise is fueled by the speculation that U.S. Securities and Exchange Commission will (SEC) may approve the first spot Ether exchange-traded funds (ETFsThis is the week.
On May 20, in a surprise turn of events the SEC asked Nasdaq CBOE and NYSE refine their application for listing spot Ether-based ETFs. Exchanges had to send in their updated applications before the end of this Tuesday.
Bloomberg analyst Eric Balchunas pointed out that several ETF issuers including Fidelity VanEck and ARK/21Shares were not responding to investors’ requests. submitted They have amended their filings.
The SEC must approve these filings (Form 19b-4), as they inform the SEC of a proposed change to the rules.
Ether’s price has increased following this announcement surged– jumped as much as 18% Monday, to over $3.830, before finally settling at $3.700.
The first deadline for spot Ether ETF applications is fast approaching. VanEck must submit its application by May 23, and ARK Invest/21Shares has to do so on May 24, respectively.
Many people who expected a rejection were surprised by the approval of these ETFs.
Even with this progress, there is still uncertainty. SEC under the leadership of crypto-skeptic Gary Gensler has been historically cautious when it comes to approving ETFs for spot crypto due to fears about possible market manipulation.
Grayscale Investments won a recent lawsuit that forced the SEC’s approval of a spot Bitcoin ETFsEther ETFs are a good example of how.
ETF issuers must still obtain S-1 approvals in addition to 19b-4. S-1 is an ETF registration form that contains detailed information on the ETF’s investment strategies, objectives and risks.
SEC examines the S-1 to make sure that ETFs meet all regulations. Approval processes for S-1 files can take anywhere from weeks to even months. After the S-1 approvals, ETFs can be listed and traded.
It could be weeks or months until we get S-1 approval and, therefore, see a real Ethereum ETF.
What are the chances?
Some speculate that SEC’s new stance could be political. motivatedIt is possible that the forthcoming elections will have an influence on you.
Donald Trump is the former president of America. expressed Pro-crypto sentiments criticized Joe Biden for his understanding of cryptocurrency and suggested that crypto enthusiasts support him.
Some people have been led to believe, by this turn of events, that crypto is now a political issue. This is especially true as Democrats try to appeal to young voters who are heavily invested in cryptocurrency.
“The Democrats desperately need young people to go out and vote for them. And the main positioning, if you look at what Biden is doing from a campaign perspective, is to position himself as a forward-looking octogenarian,” a source You can tell them by clicking on the link The Block.
Ji Kim, Chief Legal and Policies Officer of the Crypto Council for Innovation, also spoke about the potential importance and impact that cryptocurrency could have on elections. He suggested that crypto voters might be an important swing vote bloc.
While the SEC may have been influenced by previous approvals for Ether futures exchange-traded funds (ETFs) in October 20, 2023 from ProShares VanEck Bitwise and others, its current decision could be affected by this. Although the approval of ETFs for futures might indicate a willingness on behalf of SEC to evaluate spot ETFs each application must be assessed individually.
Experts and market analysts have closely monitored the situation. Bloomberg ETF Analyst Eric Balchunas increased his odds that spot Ethereum ETF will be approved from 25% to 70% after hearing about rumors of potential SEC reverse.
Geoff Kendrick is the Head of FX Research at Standard Chartered Bank. expressed Similar confidence is estimated to be between 80% and 90% approval in this week.
Polymarket has launched a new crypto-betting site in response to the recent developments. saw a sudden shift in odds. Initial odds of 10% approval for ETFs by May 31 soared up to almost 75% in just a few hours. They now stand at around 69%.
If the approval comes through, bettors could enjoy handsome returns of up to 60%. “yes” Over 165% bet against the approval.
Can Ethereum ETFs compete with BTC ETFs for market share?
BTC and altcoins are likely to be affected significantly by the launch of spot ETH-based ETFs.
The spot BTC exchange-traded funds have seen their value increase by over four times in the first four months of launch. amassed Grayscale, BlackRock and other industry leaders have a combined $58 billion of assets under management. The success of ETH ETFs raises the question about whether they can compete with BTC ETFs.
Balchunas likened the launch of Ether ETFs following Bitcoin ETFs, to that of a Sister Hazel concert after Nirvana.
Nirvana, the Bitcoin ETFs that came first, set an extremely high standard. The Ether ETFs symbolised by Sister Hazel came much later, and may struggle to equal the impact of Nirvana.
Balchunas, despite this analogy predicts that ETH ETFs will capture 10-15% of assets held by BTC ETFs. BTC ETFs will likely continue to lead, however, money may move from BTC into ETH. This could create room for ETH ETFs.
Ethereum ETFs have already made a significant impact on the crypto markets, with a movement of $100 billion in market capitalization following news. This suggests that ETH ETFs may be much more than just a trend. “small potatoes,” As Balchunas originally described.
Launching ETH ETFs may also cause ripple effects in the altcoin markets. The altcoin market could also benefit as investors add ETH ETFs to their portfolios.
This impact will depend, however, on whether ETH-based ETFs can capture a significant share of the BTC-based ETF market.
Standard Chartered believes that spot ETFs could be a major source of capital once they are approved. In the first year following approval, they estimate between 2,39 and 9,15 million ETH can be invested. This translates to $15 billion up to $45billion in USD.
These projections indicate a high level of interest in Ether ETFs. This is similar to the situation with Bitcoin. At the moment there is a lot of ambiguity and uncertainty.
What to Expect next?
VanEck’s ETF is gaining popularity as speculation grows about the approval of an ETH ETF on May 23 in the U.S. listed The ticker symbol of the Depository Trust and Clearing Corporation is DTCC “ETHV.”
The DTCC – a vital player in American financial Market infrastructure provides services for clearing, settlement and transaction reporting. Listing on the DTCC before final SEC approval is a critical step.
VanEck ETF currently listed on DTCC is inactive, meaning it has not been processed yet. However, this is not the first Ether ETF that the DTCC has ever listed. Franklin Templeton’s spot ETF ETH was added to the platform about a month earlier.
Standard Chartered bank has suggested If spot Ether exchange-traded funds (ETFs) are approved this week, Ether’s price could remain at the same level as Bitcoin for the rest of 2024.
Geoff Kendrick of Standard Chartered Bank’s FX Research and Digital Assets Research noted. “given that we now see Bitcoin reaching the $150,000 level by end-2024, this would imply a level of $8,000 for Ether.”
The crypto market is volatile, and regulatory changes are possible. Before making an investment decision, you should be cautious and do thorough research.
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Source: crypto.news