- Spot ether ETF frenzy helped keep ether afloat during a downturn in the cryptocurrency market caused by external factors.
Thanks to enthusiasm around spot ether exchange-traded funds (ETFs), ether has emerged as the victor amidst losers in the recent crypto market correction.
On Thursday, ether had climbed 2.12% in the previous day to trade at $3,815 following the Securities and Exchange Commission’s approval of eight spot ether ETFs. In contrast, bitcoin’s price dropped by 2.35% within that same time frame, trading at $67,540.
Zach Pandl, managing director of research at Grayscale, told The Block that although external factors caused the cryptocurrency market to decline, spot ether ETF craze kept ether afloat. One of the SEC-approved ETFs is sponsored by Grayscale.
Macro issues appear to be having an overall impact on the cryptocurrency markets right now. Higher real interest rates as a result of positive economic statistics this morning are having an adverse effect on the value of cryptocurrencies and equity markets.
Due to recent renewed confidence around the possibility of regulatory approval of a spot Ethereum ETF in the United States, Ethereum is mainly defying the trends.
When Bloomberg ETF analysts Erich Balchunas and James Seyffart revised their projected approval probabilities from 25% to 75% on May 20, spot ether ETF euphoria really started to take hold this week. Ethereum’s price increased from roughly $3,099 on May 17 to current levels in a week, a 20.4% increase.
Pandl added that the surge in value of the token might persist if the product starts trading and linked the price increase to possible regulatory clearance for a spot ether ETF in the US.
Prospects for the future
When asked about potential future developments, senior analyst Brian Rudick of cryptocurrency market-maker GSR stated, “We suspect performance will be substantial,” given that the expected approval of the spot ETH ETF is a result of and accompanied by a big improvement in US perceptions of cryptocurrency.
Among prospective spot ether ETF front-runners, Grayscale Investment’s Ethereum-tied product, the Grayscale Ethereum Trust (ETHE), is already a winner. Given that ETHE is currently trading at just 7% to the NAV, the market had been expecting an approval, according to Rudick. This opinion appears to be supported by the derivatives markets.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
