Big news for the cryptoverse! The Securities and Exchange Commission (SEC) has given the nod for (ETH-USD) ETFs to start trading next Tuesday. This comes after prospective issuers submitted their final S-1 documents, with the SEC having no further comments. Let’s break down what this means for the market.
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Final Steps and Approval
On Monday, the SEC informed ETH exchange-traded fund issuers that they could commence trading on July 23. Issuers were asked to finalize their S-1 documents by Wednesday, marking the last hurdle before these funds hit the market. Eric Balchunas, Bloomberg’s senior ETF analyst, highlighted this development in a social media post: “Update: Nate’s instincts were right, hearing SEC finally gotten back to issuers today, asking them to return FINAL S-1s on Wed (incl fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH. This is provided no unforeseeable last min issues of course!” The anticipation is palpable as only a few details, like management fees, remain undisclosed.
Market Reaction
The excitement around this announcement is already having a ripple effect. On Monday, ETH prices surged by 7.3%, outpacing Bitcoin’s 6% gain. Analysts are predicting large inflows once these ETFs go live. For instance, Gemini forecasts up to $5 billion in the first six months, while Steno Research estimates a whopping $20 billion in the first year.
Moreover, major issuers like VanEck and Invesco Galaxy have already revealed some of their fees, positioning themselves as key players in this new market.
Ethereum’s Price Action Post ETF Approval
The Ethereum price shot up because of the ETH ETF getting approved, a big deal for attracting institutional investors. But here’s the thing: before the news even dropped, a lot of traders had already bought in expecting this move (“priced in”), so when it finally happened, some traders cashed out to lock in their gains. That’s why we saw the price dip afterward. Essentially, while the ETF approval pumped up ETH, the sell-offs after were just traders doing what they do—taking profits after a big run-up.
At the time of writing, Ethereum is sitting at $3,375, up 8.04% in the past 5 days.
Looking Forward
This approval marks a major step forward for Ethereum, making it easier for both big investors and regular traders to get involved. Looking ahead, it could firmly establish ETH as a mainstream investment choice, encouraging more people to join in and possibly bringing more stability by boosting market liquidity.
