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Crypto: Ethereum jumps 18% after shocking ETF announcement

Tue 21 May 2024 ▪ 4 min of reading ▪ by Luc Jose A.
Investissement

The recent announcement by the United States Securities and Exchange Commission (SEC) regarding the possible approval of a spot Ethereum ETF has triggered a real price surge for Ether. This news, which could mark a decisive turning point for Ethereum, has sparked massive investor interest and propelled Ethereum to new heights. But that’s understandable, considering the stakes: a spot ETF would allow Ether to be traded on traditional markets, thus paving the way for broader adoption and potentially significant revaluation.

Ethereum shines brightly

Ethereum up 18% following ETF news

Like Bitcoin, Ethereum (ETH) experienced a spectacular 14% increase in value, reaching $3,540 in just a few hours. This rise occurred after a series of tweets from influential figures in the financial analysis sector. Eric Balchunas, senior ETF analyst at Bloomberg, announced an increase in the probabilities of the SEC approving a spot Ethereum ETF, raising this estimate from 25% to 75%. This optimistic update followed a tweet from Nate Geraci, president of ETF Store, thus highlighting the growing optimism regarding this approval.

According to Balchunas and his colleague James Seyffart, the SEC might reconsider its position on this increasingly politicized issue. They noted that the general expectation was rather for a rejection of the applications for the spot Ethereum ETFs. Geraci explained that the SEC’s approval process for spot Ethereum ETFs involves two steps: the approval of exchanges’ 19b-4 rule changes and the approval of S-1 registration statements. Although the SEC might approve the 19b-4 rule changes, it could delay the approval of the S-1s, potentially postponing the actual launch of the ETF.

The market responded sharply to this announcement, leading to a rise not only in Ethereum’s price but also in Bitcoin’s (BTC), which increased by 6%, and other cryptocurrencies saw equally spectacular gains. Furthermore, QCP Capital shared unconfirmed information that the SEC may have asked cryptocurrency exchanges to update their 19b-4 filings as soon as possible. This move could signal an upcoming approval of the Ethereum ETF, although this decision remains uncertain and far from guaranteed 100%.

If the spot ETF is approved…

The approval of a spot Ethereum ETF would have major implications for the cryptocurrency market. This decision would allow investors to buy and sell shares of Ethereum on traditional exchanges, thereby increasing the accessibility and legitimacy of the cryptocurrency. Such an approval could stimulate demand and lead to a significant increase in Ethereum’s value.

Recent activities of Ethereum whales, who bought more than 110,000 ETH in 24 hours, show strong confidence in the future of the crypto. This massive accumulation suggests that institutional investors anticipate a future price rise linked to the ETF’s approval. Additionally, the surge in transaction volume, which increased by 185%, indicates renewed interest and increased liquidity in the market.

Similarly, if the SEC were to approve the ETF, it could set a favorable precedent for other cryptocurrencies and encourage broader adoption of crypto ETFs.

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Luc Jose A. avatar
Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.