Bitcoin (BTC) and Ether (ETH) prices have declined over the past 24 hours, despite the U.S. Securities and Exchange Commission (SEC) approving several Ether exchange-traded funds (ETFs) for listing on U.S. exchanges. Ether has dropped by 4% since the approval, according to CoinGecko data. This follows a 20% rise over the past week amid positive anticipation of the approval.
Market Reaction: Buy the Rumours, Sell the Facts
The sell-off of Ether on seemingly positive news is a classic example of “buy the rumours, sell the facts” behaviour, noted Alex Kuptsikevich, a senior market analyst at FxPro. Kuptsikevich suggested that the price might return to the $3000 range, a key consolidation area. He highlighted that this could be a point where large institutional investors begin building positions in ETFs.
In January, Bitcoin experienced a similar reaction following the approval of its own ETF, losing 19% of its value in the subsequent two weeks before a significant rebound.
Regulatory Milestone for Ether
The SEC’s approval of regulatory filings for Ether ETFs marks a historic milestone for the second-largest cryptocurrency. However, these ETFs are not yet cleared to trade. While the 19B-4 form, allowing for the offering and listing ETFs, has been approved, the SEC still needs to greenlight the S-1 filings before investors can purchase them.
The regulator approved documents for eight ETFs from major players such as VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest 21Shares, Invesco Galaxy, and BlackRock. These ETFs will be listed on the Nasdaq, NYSE Arca, and Cboe BZX exchanges.
Future Market Prospects
A significant influx of institutional capital is expected if these ETFs are approved for trading. Standard Chartered predicts inflows of up to $45 billion in the first year. Some traders anticipate that Ether could rally by over 60% in the coming months, spurred by increased futures and spot buying demand for the token over the past week.
The broader crypto market has also been affected, with the CoinDesk 20 index, which tracks the largest tokens, falling 4.5% over the past 24 hours. The overall crypto market cap has dropped by 2.9% to $2.5 trillion.
