Spot Ether Exchange Traded Funds (ETFs) have received official approval from the US Securities and Exchange Commission (SEC), pending the greenlight of S-1 registration statements. However, the price of ETH has not responded positively to this milestone, as it has declined by 5% in the last 24 hours.
The approval of a series of spot Ether ETF applications by the SEC was recently reported by Crypto News Flash. This sets the stage for the product to begin trading later this year. The approved ETFs include offerings from VanEck, BlackRock, Fidelity, and others, following appeals from legislators to apply the same principles used for spot Bitcoin ETFs.
Bloomberg analyst James Seyffart explained that the trading of Ether ETFs depends on the completion of the S-1 registration statements, despite the approval of their 19b-4 filings. According to Seyffart, this process could take anywhere from a few days to several months. Surprisingly, the approval has not triggered a price surge for ETH, as many had expected. Currently, ETH is trading at $3,692, having declined by 5% in the last 24 hours.
In an attempt to understand why the price has not moved significantly since the approval, crypto commentator Zach Rynes observed that most investors who were interested in buying the approval have already done so. This perspective is supported by the 22% surge in price seen in the last seven days, fueled by rumors of the potential approval.
Analysts have commented on the reaction of the Ethereum price to the ETF approval. One reason for the lack of movement is that the ETFs have not yet been cleared to launch. VanEck has already submitted its amended S-1 filing to the Commission, and once it is approved, the price is expected to experience a significant increase due to the inflow of funds from the ETF. Crypto research firm Second Mountain shares this view and predicts that Ethereum could surge to as high as $4,891.70 after the launch.
However, some analysts argue that the immediate impact on the price would be slow, similar to what was observed after the approval of the spot Bitcoin ETF in January. Bitcoin experienced a 15% decline after approval, and it took 30 days for it to stage a 30% surge to $51,870.
Concerns have also arisen regarding Grayscale’s plan to convert its Ethereum Trust (ETHE) into a spot Ether ETF. Some experts believe this could lead to a significant outflow, similar to what occurred with its spot Bitcoin ETF. Data confirms that the Grayscale Bitcoin Trust (GBTC) has shed $17.6 billion in assets since it started trading. Regarding Ethereum, independent educator Sassal believes that the asset is undervalued and has had only three days to price in the ETF approval.
Crypto trader Rho Rider issued a warning about Grayscale’s announcement, noting the trapped $11 billion+ worth of ETH for seven years.