Bitrabo Editorial
After the Securities and Exchange Commission (SEC) greenlit the Spot Ethereum ETFs, Ethereum’s (ETH) price did not experience a significant surge as anticipated. This unexpected outcome followed the approval that many believed would trigger a substantial price increase for the second-largest cryptocurrency.
Reasons Behind ETH Price Stagnation
The lack of surge in Ethereum’s price may be attributed to the fact that the market had already factored in the possibility of the approval. Recent reports showed that ETH’s price surged by almost 20% earlier in the week when experts predicted a high chance of approval. This scenario could be a classic ‘sell the news’ event, with traders capturing profits from previous investments in ETH.
Comparatively, a similar downturn was observed in Bitcoin’s price following the approval of Spot Bitcoin ETFs. Unlike Bitcoin ETFs that commenced trading right after approval, the Spot Ethereum ETFs are yet to start trading. The SEC has only approved the exchange filings, not the registration filings. The delay in trading commencement for these ETFs could be a contributing factor to the muted reaction in ETH’s price.
Another limiting factor might be the timeframe required for the registration filings’ approval, which could span several weeks or months, potentially delaying any significant price rally for Ethereum and other alternative cryptocurrencies.
On a positive note, ETH has witnessed a 28% increase in value over the past week, indicating a notable improvement compared to its recent performance and alignment with other major cryptocurrencies.
Positive Implications of Ethereum Approval
The approval of Spot Ethereum ETFs signifies the SEC’s acknowledgment of ETH as a non-security asset, contrasting with previous speculations suggesting the Commission’s possible classification of ETH as a security.
TuongVy Le, General Counsel at Anchorage Digital, pointed out in a recent post that funds primarily consisting of securities assets may register through Form N-1A or N-2 instead of S-1. The SEC’s approval of the S-1 filings for these Ethereum ETFs implies the exclusion of ETH as a security, as the major assets of these funds are ETH.
Presently, ETH is trading around $3,803, according to data from CoinMarketCap.