Analysts Say Ethereum Bull Run Imminent After ETF Approval

Analysts Say Ethereum Bull Run Imminent After ETF Approval

Market analysts say that there is a possibility of a massive rise in the price of Ethereum. This is after the US Securities and Exchange Commission (SEC) approved spot Ethereum ETFs last week.

After months of limited engagements and terse delays, the top regulator on Wall Street gave approval to the investment product in a bombshell move.

A long list of asset managers had submitted applications for spot Ethereum ETFs and eight of them were approved.

The impact

According to industry observers, the second-biggest digital coin is most likely going to see a massive rise in its value.

The price of Ethereum is facing some downward pressure due to the outflows anticipated from the five-year-old Grayscale Ethereum Trust (ETHE).

However, data firm Kaiko asserted that the price of the asset is expected to rise in the long term. According to Kaiko, this conclusion can be drawn from what had happened in the case of spot Bitcoin ETFs.

They were granted approval by the SEC in January. The Grayscale Bitcoin Trust (GBTC) recorded massive outflows after its conversion into an ETF.

Investors decided to cash out because they had been unable to do so previously. This saw the price of Bitcoin decline in the short term.

The expectations

The company said that once spot Ethereum ETFs are launched, it is probable that Ethereum will experience some selling pressure.

This is mostly because of the potential outflows and redemptions associated with Grayscale’s ETHE. In the last three months, the fund has been trading at a discount between 6% and 26%.

Kaiko stated that even if inflows are disappointing in the short term, the approval would undoubtedly have major implications for Ether.

To begin with, their approval would eliminate some of the regulatory uncertainty that has had a negative impact on the asset’s performance in the last year.

Bull run

Blockchain data provider Amberdata’s Derivatives director, Greg Magadini said that there would likely be a bull run.

However, it is important to note that it remains unclear as to when the spot Ethereum ETFs will actually begin trading.

While the SEC has given approval to the application, there is still a lot of paperwork that needs to be finished first

America’s biggest bank, JPMorgan, said on Friday that it expects the funds to begin trading before November.

When Ethereum ETFs are launched in the market eventually, they will provide investors with exposure to Ether, similar to Bitcoin funds.

Ether is the second-biggest crypto token in the market after Bitcoin. Investors will be able to get exposure to it through shares that are traded on a stock exchange.

The biggest regulator on Wall Street, the SEC, had been slow in responding to applicants. In fact, it pushed back a number of decision deadlines.

Analysts from CoinShares and Bloomberg had asserted previously that these funds were unlikely to get the green light in May.

But, there had been rumors last week that the Commission would grant approval and it actually did. This saw the price of Ethereum rise.