Following Ethereum price crossing $4,000 and Bitcoin achieving its all-time high, investors kept the optimism regarding the future of the cryptocurrencies. However, the ETH valuation has fallen by 21% in the past week due to the recent downturn in the crypto market. On the other hand, investors are still optimistic that the forthcoming approval of Ether ETFs will boost the token’s price.
Standard Chartered Bank estimates that the SEC could authorize an Ether ETF by May 23, resulting in approximately $45 billion entering the market within the inaugural year. are given the green light, what impact will it have on the price of Ethereum.
ETH ETFs might not get the approval
Analysts anticipate a slim chance of ETH ETF approval due to regulators’ inadequate communication, with a 28% likelihood on Polymarket. Bloomberg analysts, Eric Balchunas and James Seyffart, have adjusted their forecasts to 30% and 60-65%, respectively, expressing escalating skepticism and minimal headway towards approval with only 73 days remaining until the deadline.
Moreover, political pressure from Senators Reed and Butler on SEC Chairman Gensler to refrain from approving more crypto ETFs, citing risks of fraud and manipulation in thinly traded markets, has further reduced the likelihood of approval. Balchunas believes Democratic regrets over the approval of the Bitcoin ETF may impact Ethereum ETF approval, with focus on correlations between ETH futures and spot prices as a pivotal determinant. Overall, the scenario for Ethereum ETF approval seems improbable, with regulators facing pressure to prioritize investor protection over expanding cryptocurrency investment options.
The success of the BTC spot products clearly ruffling some feathers on the Hill. @SenatorJackReed and @Senlaphonza write to the @SECGov urging:
-no further ETPs for other tokens
-make life difficult (i.e. examinations/reviews) for brokers and advisers that recommend BTC ETPs pic.twitter.com/enxdumC02N— Alexander Grieve (@AlexanderGrieve) March 14, 2024
The regulator has met with Coinbase and Grayscale, but there have been no public statements issued. This has contributed to the lack of clarity.
What comes next for Ethereum (ETH)?
Analysts from crypto trading platform Blofin suggest that a downturn might not significantly impact the value of Ethereum. Approval or disapproval of an ETF may have minimal repercussions on the value of the altcoin and its holders. They assert that the performance of ETH is chiefly influenced by market factors such as investors’ behavior and cash flow.
When BTC prices surge, investors typically offload BTC and purchase ETH, boosting the value of ETH. The swift return of cash liquidity further supports ETH price, and its volatility offers potential for growth. More cash flowing into the market has propelled ETH prices higher, which are expected to continue rising long-term. Positive sentiment is mirrored in ETH options and ETF approvals could accelerate this trend.
Competition from other cryptocurrencies like SOL could influence ETH’s market share, as they attract cash liquidity. Despite potential fluctuations, ETH’s leading position remains secure for now, but it will face challenges from competitors in the future. The gradual and steady return of liquidity to the market will mold the competition for cash flow, presenting a significant challenge for ETH.
Ethereum Price Forecast
At the time of writing, Ethereum price is trading at $3,339.65, a decrease of 2.02% in the past day. However, it has surged by 11% and 81% of the past week and year to date respectively.
The token still retains its position as the second largest cryptocurrency with a market cap of $387.94 billion, reporting a 24-hour trading volume of $32.57 billion.
At The End
Amid discussions about ETF approval, fluctuations in Ethereum price are being closely monitored by investors who are also observing regulatory changes and market trends attentively. Although analysts doubt the chances of approval, the potential increase in funds from ETFs could significantly affect the trajectory of Ethereum’s price. Even amidst regulatory uncertainties and competition from other cryptocurrencies, Ethereum continues to maintain a robust market position. The future of Ethereum hinges on its ability to adapt to market changes and uphold investor trust, regardless of the approval or rejection of the ETF.
