Markets
Cryptocurrency Markets Slump After Ethereum ETF Approval
Traders are “selling the news” after the SEC approves eight exchange-traded funds backed by spot Ether.
Cryptocurrency markets traded lower after the SEC approved eight exchange-traded funds backed by spot Ether on Thursday.
The long-awaited approval, initially expected to further stimulate the market, turned into a “news sell” event, leading to an overall market decline.
ETH fell 4% following the approval, after rallying 20% over the past week. The world’s largest cryptocurrency, Bitcoin, also continued its downward trend, losing 6%, while Solana lost 5%.
ETH price
Benjamin Cowen, CEO of ITC Crypto, finds It’s comical that people are angry about ETH’s lack of movement. “ETH rose more this week than the S&P 500 usually gives you in a year.”
According to crypto analyst Zach Rynes, the lack of bullish momentum it means that “everyone who wanted to buy approval has already done so.”
The exchanges involved – NYSE Arca, Nasdaq and Cboe BZX – have requested rule changes for listing and trading Ether ETFs. They have received approval to trade multiple Ethereum-based ETFs, including Grayscale Ethereum Trust, Bitwise Ethereum ETF, BlackRock’s iShares Ethereum Trust, VanEck Ethereum Trust, ARK 21Shares Ethereum ETF, Invesco Galaxy Ethereum ETF, Fidelity Ethereum Fund and Franklin ETF Franklin Ethereum by Templeton.
Data from CoinGlass Shows that in the last 24 hours 104,585 traders were liquidated for a total of 380 million dollars. The largest single liquidation order occurred on Binance in the ETH-USDC pair, worth $12.41 million. Over $105 million in long positions have been liquidated in the last 24 hours.
Long liquidations occur when traders betting on rising prices are forced to close their positions due to falling prices, leading to automatic sell-offs.
Meme coins are mixed today, with Dogecoin and PEPE up 3%, while Shiba Inu, FLOKI and Dogwifhat are down between 1% and 3%.
The DOGE price action comes as Kabosu, the dog who inspired the Dogecoin meme in 2013, has died. Its owner, Atsuko Sato, a 62-year-old kindergarten teacher from Sakura, Chiba Prefecture, Japan, confirmed the news in a blog send on Fridays.
U.S. stock markets posted gains ahead of the Memorial Day long weekend. The Dow Jones gained 0.2%, while the S&P 500 and Nasdaq rose 0.6% and 1%, respectively.