Ethereum ETFs launch tomorrow – is crypto coming back?
The much-awaited ETH ETFs could be a shot in the arm for the wider crypto markets.
6 months after the launch of spot Bitcoin ETFs (exchange-traded funds) helped push Bitcoin to new all-time highs, the crypto industry is waiting to see if spot Ethereum ETFs could do the same for the second-largest cryptocurrency, and the market as a whole.
The US Securities and Exchange Commission (SEC) is expected to approve up to 9 ETFs for trading from Tuesday after performing a last-minute 180 back in May to green light a number of spot Ethereum ETF applications.
But is this likely to be the boost crypto needed after a turbulent few months?
Who is launching ETH ETFs?
There are 9 investing firms that expect to be approved for trading tomorrow:
- ARK & 21 Shares
- BlackRock
- Fidelity
- Franklin Templeton
- Grayscale
- Hashdex
- Invesco
- VanEck
- Bitwise
The ETFs will be listed on 3 US exchanges - Nasdaq, Cbose BZX and NYSE Arca. All 8 firms already offer spot Bitcoin ETFs.
What will this do to the price of Ethereum?
It really depends on the level of demand. If ETF inflows are significant, it could drive up the price of ETH as supply is eaten up.
This is effectively what happened with the spot Bitcoin ETFs, as billions of dollars of inflows created something of a supply shock for BTC.
However, there's also the consideration that the launch of ETH ETFs are already "priced in" to the market, especially given its recent recovery to US$3,455.
If inflows are underwhelming, the price of ETH could actually drop if markets view it as a sign that there's no wider demand for Ethereum.
Is this good for the rest of crypto?
It will be an interesting litmus test. If the Ethereum ETFs are successful, it would suggest there's greater demand for cryptocurrency beyond Bitcoin in traditional markets.
While Bitcoin has enjoyed a bumper 2024, the wider crypto markets have endured a rockier time. If there's an appetite for Ethereum, it could pave the way for further crypto ETFs for tokens like Solana or even Dogecoin.
Of course, many purists would consider Bitcoin and Ethereum ETFs as antithetical to the entire concept of cryptocurrency.
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