ETH ETF Approval Speculation Send ETH Soaring

PATNA (— The cryptocurrency market is abuzz with speculation following recent indications that the US Securities and Exchange Commission (SEC) may soon give approval for ETH exchange-traded funds (ETFs).

The second-largest cryptocurrency by market value, Ether, has long awaited regulatory approval to enter the ETF space.

ETH ETF Approval
ETH price action over the last 7 days.

Following news of the potential approval, ETH price spiked nearly 26% since May 20 to reach $3,839 on May 21, the token’s highest price level since March 15 earlier this year.

Shifting SEC Stance on ETH Exchange-Traded Funds

In recent developments, SEC staff told exchanges that the agency is leaning towards approving several Ether ETFs. The shift departs from earlier expectations that the SEC would reject these efforts.

The agency has provided comments on the applications from firms such as BlackRock and VanEck, indicating that if the firms resolved the issues promptly, approvals could come as soon as May 25.​

A looming deadline for VanEck’s spot Ether ETF application on May 23 underscores the SEC’s urgency, with similar deadlines for other major players like ARK Invest, Grayscale, and Fidelity in the coming months.

Speculations of the SEC giving approval for a Spot ETH ETF are running high.

Grayscale’s chief legal officer, Craig Salm, had speculated in a March 2024 post that many operational aspects discussed for Bitcoin ETFs are directly applicable to Ether ETFs. This includes creation and redemption procedures, authorized participants, and custody issues.

Market Impact of ETH ETF Approval

The SEC’s approval of Ether ETFs could open the market to institutional investors. Moreover, the approval of such funds would likely mirror the impact seen with the launch of spot Bitcoin ETFs, which have drawn billions in investments and contributed to significant price gains for Bitcoin in 2024.

The anticipation of SEC approval has already influenced the market, with Ether prices rising substantially, while Bitcoin also saw a 5% increase to $70,350.

ETH ETF Approval
ETHUSD daily price chart with RSI.

Moreover, following the news of potential SEC approval for ETH ETFs, the token’s 20-day EMA (red wave) and 50-day EMA (purple wave) formed a bullish pattern called the golden cross. Traders consider the pattern an indicator of bullish market sentiment.

However, the hype surrounding the likely SEC approval for an ETH ETF failed to propel the token’s price above $3,900. An uptrend could face resistance near $4,000 and $4,310, while a reversal could see the ETH price test support near $3,570 and $3,340.

Furthermore, the approval of Ether ETFs could also benefit existing products like the Grayscale Ethereum Trust, which trades at a discount to its Ether holdings. Conversion of this trust into an ETF would close this discount, offering immediate returns to investors and potentially increasing the fund’s attractiveness.

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