Ethereum ETF approved for listing, what impact will it have on Ethereum prices?

Author: Helene Braun, CoinDesk; Compiler: Baishui, Golden Finance

U.S. regulators have finally approved a spot exchange-traded fund that holds Ethereum (ETH), giving Americans access to the second-largest major cryptocurrency through this easy-to-trade vehicle.

The decision ends a years-long process for the U.S. Securities and Exchange Commission to approve an Ethereum ETF, after the regulator approved a Bitcoin (BTC) ETF in January. Ethereum ETFs could make Ethereum more popular with traditional investors because the funds can be bought and sold through traditional brokerage accounts. Bitcoin ETFs have attracted tens of billions of dollars in investment since their debut in January.

A few weeks ago, approval seemed uncertain. But in late May, SEC officials suddenly began reaching out to people who wanted to issue ETFs after a long period of silence. Then, on May 23, the regulator approved a key document, opening the path to full approval with its latest decision.

"We are now fully entering the ETF era of cryptocurrency," said Matt Hougan, chief investment officer at Bitwise. "Investors can now access more than 70% of the liquid crypto asset market through low-cost ETPs."

As the first company to apply for an Ethereum ETF in 2021, we have always believed that investors should be able to invest in Ethereum through tools they find convenient and familiar," said Kyle DaCruz, head of digital assets at VanEck.If Bitcoin is digital gold, then Ethereum is the open source application store and the gateway to thousands of applications that will leverage blockchain technology."

Impact on Ethereum prices

In January of this year, the Bitcoin spot ETF was approved and began trading, becoming the most successful product in the history of exchange-traded products. In terms of the speed of capital influx, this ETF soared by more than 58% in just two months, pushing the price of the largest cryptocurrency to a record high.

Some analysts predict that while spot ETH ETFs could push Ethereum’s price to $6,500, these funds won’t see as much inflow as their Bitcoin-focused counterparts.

Research firm Steno Research predicts that newly launched ETFs could see inflows of $15 billion to $20 billion in their first year, which is roughly the amount of money that the Bitcoin spot ETF saw in just seven months. A report from the firm noted that Ethereum doesn’t have the “first-mover advantage” that Bitcoin does, nor does it have a strong narrative such as Bitcoin being “digital gold,” even though many of its supporters believe it is.