Spot Ethereum (ETH) ETFs are approved. As we did with the approval of spot Bitcoin (BTC) ETFs, we will be looking at what happened as well as what might come next as the crypto world is, once again, heating up with excitement.
What Happened?
Recently, on May 23rd, 2024, a total of eight spot Ethereum ETFs were approved, including ones from BlackRock, Grayscale, VanEck, and more. With ETH price increasing by around 30% (At the time of writing) over the past week, it seemed like the whole crypto community was boiling with anticipation for the approval. But what exactly happened? For more on spot ETFs please read our previous article here.
Before the week of the approval, things didn’t look great for spot ETH ETFs. The consensus around the block was that the ETFs would probably get approved at some point, but not as fast as May 23rd. This changed on Monday, May 20th when the SEC (U.S. Securities and Exchange Commission) started requesting document updates from potential ETF issuers. This was a 180 on their stance in regards to the spot ETH ETFs where original predictions were that they would delay further.
The SEC shifting away from their previous inactivity prompted many to expect the approvals to occur on the May 23rd deadline for VanEck’s ETF application. The SEC proceeded to approve the 19b-4 forms (These are forms used to propose a rule change prior to exchanges listing a new product) for the ETFs, and what remains is for the S-1 forms (These are basically registration statements) to be approved next. The S-1 forms are more of a formality and will very likely be approved, and once that is behind us, spot ETH ETFs will officially be on the market.
With the primary approvals in place, let’s look at what might be happening next.
What Might Come Next?
The two things that come to mind regarding what might come next would be the approvals of even more spot crypto ETFs and a price boom for ETH.
Other Crypto Spot ETFs?
Why not a spot SOL (Solana) ETF? Why not a spot TT ETF? With the approval of spot ETH ETFs, the floodgates have certainly opened for cryptocurrencies everywhere. With both BTC and ETH having their spot ETFs, it seems like traditional finance and the general public are becoming much more open to cryptocurrencies.
The expectation is that other cryptocurrencies will also start seeing spot ETF approvals, but not right away. Just like with spot BTC ETFs, the SEC will likely want ample time for observation and evaluation. This is to see how the general public will bite onto spot ETH ETFs and whether the demand and growth will match their expectations.
The SEC will also likely want to hold off on passing more spot ETFs for crypto right away due to two factors. The first factor is this being a slippery slope that will invite a literal flood of applications for other cryptos. From their perspective, cryptocurrencies have potential but are only warming up. The second factor is needing time for other cryptos to grow and catch up. The fact is that BTC and ETH are so far ahead of the rest of the curve that, in comparison, their stability gives them an overwhelming advantage over others. Once the rest of the pack has caught up, then the talks will be in session.
How is ETH Looking?
At the time of writing, ETH has risen by over 28% in the last week, and the momentum is growing. When spot BTC ETFs were approved, we saw Bitcoin rise to a new all-time high (ATH), and it won’t be outlandish to say that the same could happen for ETH. Here are some reasons why ETH might soar to new heights:
More Eyes on ETH– The entire purpose of spot ETFs is for more people to have the option to “trade” ETH, or for there to be more eyes on this asset. With more eyes on ETH, the expected rise in interest and engagement will likely see ETH continue seeing price increases.
Altcoin Season is Coming– As discussed in our previous blog articles, the bull run led by Bitcoin earlier this year has yet to see altcoins follow suit. The approvals of these spot ETFs might be the tipping point needed for everything outside of Bitcoin to rocket.
Market Anticipation is High– We saw a mini bull run earlier this year with Bitcoin taking the lead. Things have more or less calmed since then, and that bull run didn’t seem to match the massive growth expected from all the previous bull runs. Every crypto enthusiast is still holding their breath for more. Just like how the approvals of these spot ETFs might tip the scale for altcoin season, it might even tip the entire market and bring fruit to everyone’s anticipation and expectations.
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What’s Next?
First Bitcoin, now Ether. The approvals of these spot ETFs will surely serve as pivotal points for crypto when we look back in a few years. Thunder Buzz will continue following these major industry news as we traverse through this landscape.
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