NAIROBI (CoinChapter.com) — Analysts predict the SEC could give final approval for Ethereum ETFs by July, following the approval of Bitcoin and Ethereum futures ETFs. Nate Geraci, ETF Store President, expects the SEC to finalize the approval in 2-3 months. Eric Balchunas from Bloomberg suggests July 4th as a possible date. This potential approval has significant implications for investors and the market.
Potential Outflows from Grayscale’s Ethereum Trust
Market observers are keen on how Grayscale’s Ethereum Trust (ETHE) will react post-approval. In January, Grayscale Bitcoin Trust (GBTC) saw $6.5 billion in outflows after Bitcoin ETF approval. ETHE, with $11 billion in assets under management, could face significant outflows. Kaiko estimates daily outflows could average $110 million if ETHE follows GBTC’s trend. This would amount to 30% of ETH’s daily volume on Coinbase.
James Van Straten, a crypto analyst, downplays the likelihood of massive outflows. He cites Grayscale’s low-fee Mini Trust ($ETH) as a mitigating factor. Van Straten notes that investors don’t need to do anything with the Mini Trust, unlike GBTC, which lacked this option. This could prevent the bleeding and retain investors.
Market Implications of Ethereum ETF Approval
The potential of the final approval of Ethereum ETFs in July 2024 could significantly impact the cryptocurrency market. This follows the SEC’s earlier approval of spot Bitcoin ETFs, which has already resulted in $12 billion in net inflows and a 78% increase in Bitcoin’s price over six months. However, the market response to the initial announcement of Ethereum ETF approval has been more muted, with Ethereum experiencing a slight drop despite a 58% increase in 2024.
The 4-hour chart reveals a bearish RSI divergence, indicating a potential price pullback. The RSI (Relative Strength Index) is making lower highs while the price prints higher highs, suggesting that ETH might ease back to its 50-day moving average around $3,705.1 or the support zone near $3,600 before rebounding to the $4,000 resistance. Such divergences often signal temporary weakness in the price trend, implying that investors should brace for short-term volatility.
Ethereum is currently trading at $3,840.4, down 0.41% in the last 24 hours. Its market cap stands at $465.75 billion, with a 24-hour trading volume of $19.07 billion. The circulating supply is 120,137,632 ETH. These figures highlight the significant market presence and activity surrounding Ethereum, underscoring the potential impact of ETF approvals on its trading dynamics.
Possible Future for ETH ETF
Notably, a bearish RSI divergence on the 4-hour chart indicates a potential price pullback. The RSI (Relative Strength Index) is making lower highs while the price prints higher highs. ETH might ease back to its 50-day moving average, around $3.68K, or the support zone near $3.6K, before rebounding to the $4K resistance. Moreover, such divergences often signal a temporary weakness in the price trend, suggesting investors should brace for short-term volatility.
Above all, if approved, Ethereum ETFs could lead to increased liquidity and accessibility for investors, further integrating cryptocurrency into traditional financial systems. However, the regulatory challenges surrounding staking and the market’s reaction to the approval will be critical factors to monitor.
