The United States Securities and Exchange Commission(SEC) recently approved the much-anticipated spot Ethereum Exchange Traded Funds (ETFs).
The development was celebrated by the crypto industry as it is generally accepted to be a positive development for the crypto market and the industry in all. But despite the approval, the price of Ethereum in the market has remained unchanged with that of Bitcoin even dropping further.
There are two major reasons for the lack of market activity in response to the just approved spot Ethereum ETFs.
The reasons why the much-anticipated Ethereum ETF approval has so far had little impact on the prices of crypto assets are:
Early buyers
The news about the potential approval of the spot Ethereum ETFs has been on for a while now with the body language of the US regulatory body showing signs of a positive outcome.
Eric Balchunas, Senior ETF Analyst for Bloomberg, updated his possibility meter for a spot Ethereum ETF approval from 25% to 75%.
This and other positive predictions from crypto analysts and experts spurred traders who were looking to cash in on the development to buy Ethereum earlier in the week long before the deadline for the SEC approval.
Ether’s price surged 29% over the past week as a result of this flurry of activities
The current news of the much-anticipated approval finally happening is having little effect on the markets because all the actions by traders who wanted to buy the approval have already happened.
S-1 form delay
Another reason why the current approval of spot Ethereum ETFs has had little impact on the price of Ethereum and other crypto markets is that although the approval has been confirmed, the process is still incomplete and investors cannot currently engage with the ETFs.
What was approved recently were the 19b-4s forms issued by the Ethereum ETF issuers and not the S-1 forms.
The S-1 form is a comprehensive document including details of the firm’s financials and risk profile as well as the securities it intends to offer.
The S-1 forms are yet to be approved by the SEC and could take weeks or even months.
What this means
This means that trading in Ethereum ETF is yet to begin and that could be the explanation for the lack of market activity.
However, some analysts say it might not immediately lead to an upward trend, citing Bitcoin’s cycle to a price surge after its ETF was launched.
Bitcoin’s price dropped 15% after spot Bitcoin ETFs were approved for trading on Jan. 10. According to CoinMarketCap data, it took 30 days for the price to spike 30% to $51,870.
- Ethereum price has remained in the range of $3800 to $3706 following the approval of its ETFs by the United States SEC. The article above highlighted reasons for that.
- Nairametrics earlier reported that crypto analyst Andrey Stoychev has predicted that Ethereum’s price could hit $10k if it succeeds in getting the spot Ethereum Exchange approved.
- This would mean Ethereum beating its all-time high of over $4,800. That remains to be seen as Bitcoin did not immediately witness a price surge after its ETFs were approved and Ethereum’s price has remained unchanged since its ETFs were approved last night.
