Mikkel Rosenvold
2 weeks ago

Analyst: Ethereum set for bull run after ETF approval

Ethereum's market outlook turns bullish with the approval of spot ETFs, attracting significant capital inflow and driving price projections up.
Graphistudio
Graphistudio

Ethereum's market outlook has turned highly bullish following the approval of its spot ETFs. Crypto analyst Mads Eberhardt from Steno Research projects that these ETFs will attract between $15 to $20 billion in net inflow within a year, despite initial outflows from the Grayscale Ethereum Trust. The approval is expected to drive Ethereum's price to $6,500 by October, with the ETH/BTC ratio anticipated to reach 0.065 later this year.

The U.S. Securities and Exchange Commission (SEC) approved seven Ethereum spot ETFs, a decision that marks a significant regulatory shift. The approval process saw the likelihood of approval rise to 95% from 60% as amended 19b-4 forms were submitted. The S-1 forms, necessary for trading, are expected to be ready within weeks, allowing for a quick launch.

President Biden's administration has shown newfound support for the crypto industry, which extends beyond the Ethereum ETFs. The U.S. House passed the Financial Innovation and Technology for the 21st Century Act (FIT21 bill), aiming to create a comprehensive regulatory framework for the crypto market. This framework designates the Commodity Futures Trading Commission (CFTC) as the primary regulator for digital assets and aims to clarify the distinction between crypto tokens classified as securities and those classified as commodities.

The SEC Chair, Gary Gensler, opposed the FIT21 bill, arguing it would harm investors and create regulatory gaps. However, his influence is waning as more Democrats and major financial institutions, like BlackRock, show support for the crypto industry. Mikkel Rosenvold, a geopolitical analyst at Steno Research, notes that the approval of Bitcoin and Ethereum ETFs marks a breakthrough into institutional money and political support.

The approval of Ethereum spot ETFs is expected to mirror the success of Bitcoin spot ETFs, which saw over $13 billion in net inflows within four and a half months. Despite potential initial outflows from the Grayscale Ethereum Trust, the long-term outlook for Ethereum remains bullish. The inflow from ETFs is projected to significantly impact Ethereum's price and market dynamics.

Ethereum's unique attributes, such as its deflationary supply and staking rewards, coupled with a friendlier regulatory environment, position it for substantial growth. The anticipation of increased liquidity and broader market engagement further strengthens this outlook. As the regulatory environment stabilizes, new use cases and applications for crypto assets are expected to emerge, reinforcing Ethereum's market position.

Overall, the approval of Ethereum spot ETFs is a game-changer, set to drive significant capital inflow and enhance Ethereum's market presence, making it a pivotal moment for the cryptocurrency industry.

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