The price of Ethereum has significantly increased, causing the cryptocurrency sector to experience a rise of optimism. The main cause of this increase in value is the expected approval by the U.S. Securities and Exchange Commission (SEC) of a spot Ethereum Exchange-Traded Fund (ETF).
Eric Balchunas, an analyst for Bloomberg Intelligence, projects a 70% likelihood of approval by May. As a result, Ether’s value increased by 9% over the previous day to $2,625 and increased by 18% over the previous week.
SEC Rules Regarding Ethereum ETF
Investor confidence in the possibility of an Ethereum ETF is reflected in the market’s response. This excitement comes after eleven Bitcoin ETFs were recently approved by the SEC. The market exhibits a “buy the rumor, ignore the news, buy the next rumor” pattern, according to Joe Caselin of BIT cryptocurrency exchange.
Notably, BlackRock, which is about to introduce its Bitcoin ETF, has a stellar record with the SEC, with 575 approvals to its name. May 23 is the deadline for the final decision on the Ethereum ETF, which was filed by Ark and 21Shares. But there’s more ambiguity in the process because SEC chair Gary Gensler views cryptocurrencies—aside from Bitcoin—as securities.
Possible Side Effects: Not Just Ethereum
The introduction of an Ethereum ETF may open the door for the introduction of such investment products for other cryptocurrencies, like as Solana. Technical analyst at BTC Markets Rachael Lucas notes that Solana has grown by an astounding 920% in 2023, significantly surpassing Bitcoin’s 155% gain during the same time frame.
Investors have taken note of this increase. Additionally, Caselin indicates that the establishment of an Ethereum ETF could result more ETFs that cover top market cap tokens; think of it as the S&P 500 of cryptocurrencies.