Ethereum experienced an increase, in value with its price jumping by 25% from May 20 to May 21 reaching a peak of $3,840. This surge faced some resistance despite the growing optimism surrounding the approval of a US based spot Ether exchange traded fund (ETF) before the May 23 deadline. This deadline signifies the verdict on VanEcks application. Traders are now pondering whether the price stability around $3,750 suggests that the expected ETF approval has already been considered in the market.
The upcoming ruling by the US Securities and Exchange Commission (SEC) regarding the spot ETH ETF continues to be a focus for market players. Analysts have raised their approval expectations after reports that the SEC contacted NYSE and Nasdaq to update their ETF filings.
However no official announcement has been made by the SEC yet. The decision will be rendered by a panel of five commissioners, including figures like Hester Peirce and Mark Uyeda who have shown sentiments towards cryptocurrencies. On the hand Caroline Crenshaw has expressed concerns about crypto due to issues, like regulation and risks of fraud and manipulation.
Many experts, in the market are comparing Bitcoins performance after its U.S. Spot ETF approval in January. Bitcoin saw a 35% increase in value over the 50 days following the approval rising from $46,356 to $62,416 by March 1. The question now is whether Ether ETFs will attract interest as Bitcoin did initially considering the established Grayscale Bitcoin Trust ETF with $28.7 billion in assets.
Analysts believe there is a likelihood (75%) of Ether ETF approval and the recent 25% rise in Ethers value aligns with Bitcoins trend post ETF approval. This increase doesn’t necessarily mean that Ethers price will peak at $3,840; it simply reflects market expectations based on approval probabilities. Like how Bitcoin continued to grow after its surge Ether might also experience further increases down the road.
Nevertheless external factors can start playing a role over time. For example when Bitcoins U.S. Spot ETF got approved it coincided with a period for risk on assets shown by all time highs in the S&P 500 index and WTI prices exceeding $80 per barrel. Therefore assuming that Ether will follow a path, under market conditions might be too simplistic of an analysis.
Metrics derived from derivatives provide insights, into the feelings of traders. With the increase in Ethers value information from futures trading shows that traders are not overly optimistic or completely factoring in the probability of ETF approval. This implies that a rejection might not have an effect given the lack of significant borrowing by buyers. As a result the current price of Ether may not entirely capture expectations of approval suggesting there could be room, for gains.
