Ethereum Price Soars Past $3,500 Amid Spot Ether ETF Optimism

The price of Ethereum has rallied past the $3,500 mark on 17 July 2024, amid growing optimism about the imminent launch of spot Ether exchange-traded funds (ETFs).

As of now, Ether is trading at $3,483.94, up by around 3% over the past day, according to data from CoinMarketCap. The second-largest cryptocurrency by market cap has gained more than 12% over the past week.

The rally comes as the US Securities and Exchange Commission (SEC) granted “preliminary approval” for at least three asset managers to launch their spot Ether ETFs. This news has sparked speculation that the spot ETH ETFs might start trading as early as 23 July 2024.

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BlackRock, Franklin Templeton, and VanEck Receive Approval

The SEC’s final approval is now contingent upon the applicants submitting their final offering documents by the end of this week, reported Reuters.

The sources mentioned in the report identified BlackRock, Franklin Templeton, and VanEck as the firms that received this preliminary green light. Fidelity, 21Shares, Grayscale, Bitwise, and Invesco Galaxy are also in the race to launch their own Ether ETFs next week.

One source told the media outlet that all eight spot Ether ETFs are expected to debut simultaneously, mirroring the SEC’s approach with the spot Bitcoin ETFs. This coordinated launch could potentially create a significant impact on the cryptocurrency market.

Bloomberg ETF analyst Eric Balchunas reported that the SEC has instructed issuers to file their final S-1 forms by July 16. These filings must include details about the fees attached to the spot Ether ETFs.

Balchunas expects the SEC to officially approve the S-1 forms on 22 July 2024 after trading hours, paving the way for the ETFs to begin trading on 23 July 2024.

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! https://t.co/D21FD9Qf94

— Eric Balchunas (@EricBalchunas) July 15, 2024

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Ether Could Outperform Bitcoin After ETF Approval

The introduction of spot Ether ETFs could potentially drive Ether to outperform its larger counterpart, Bitcoin, according to research firm Kaiko.

In a recent note, the firm said that the price of Ether relative to Bitcoin has risen from 0.045 to around 0.05 following the initial approval stage. This ratio indicates how much Bitcoin is required to purchase one Ether token, with a higher ratio favoring Ether.

The launch of Bitcoin ETFs has already resulted in a substantial price increase, with Bitcoin climbing approximately 50% this year to $63,400. Ether has also seen a significant rise, up 48% this year.

Matthew O’Neill, co-director of research at Financial Technology Partners, suggested that the availability of Ether ETFs would allow institutional investors to diversify their crypto portfolios beyond Bitcoin, potentially owning a mix of both assets.

“They would be able to pick from two flavors on the menu rather than just one,” O’Neill said.

He also noted that the market has not fully priced in the potential approval of these ETFs, with some investors remaining cautious until they officially start trading. As a result, O’Neill believes there is still room for Ether’s price to increase.

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

Disclaimer

Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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