As hopes grow for the approval of an exchange-traded fund (ETF) that invests directly in Ethereum, enthusiasm is seeping into the cryptocurrency market, signaling a notable change in sentiment.
The positive outlook is consistent with a series of developments involving potential ETF issuers, the stock exchanges facilitating the transactions, and the U.S. Securities and Exchange Commission (SEC). The SEC has asked the New York Stock Exchange and Cboe Global Markets to update their regulatory change filings, which could increase the likelihood of approval, according to people familiar with the matter. However, the results remain uncertain and highlight the complexities involved.
Fidelity Investments recently amended its S-1 registration statement with the SEC for its proposed spot Ether ETF, addressing key issues such as staking and derivative investments. The move comes as anticipation grows ahead of the May 23 deadline for the SEC to review VanEck’s ETF application.
Analysts view the potential ETF approval as an important regulatory milestone, with significant inflows expected into Ether upon implementation, similar to the impact observed for Bitcoin ETFs. Standard Chartered’s Geoff Kendrick estimates inflows could range from $15 billion to $45 billion within the first year after approval.
Grayscale Ethereum Trust (ETHE) serves as another gauge of market sentiment, with discounts to underlying Ethereum holdings shrinking significantly, reminiscent of patterns observed before Grayscale’s conversion to Bitcoin Trust was approved.
Ether’s recent price surge reflects growing optimism among investors, along with the growing likelihood of ETF approval. Although the SEC is refraining from commenting on specific filings, stakeholders eagerly await developments in an evolving environment.
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