Markets
Seven Experts on What an Ethereum ETF Nod Means for Cryptocurrency Prices – DL News
- What will an Ethereum ETF mean for the markets?
- Galaxy’s Mike Novogratz and Ethereum co-founder Joe Lubin are among the contributing experts.
Ethereum has rallied sharply this week amid optimism over the US approval of Exchange Traded Funds tracking the cryptocurrency.
The reasoning behind the sudden U-turn is up for debate, but market watchers are generally aligned on what a regulator nod would do for Ethereum and other cryptocurrencies.
Asset manager VanEck is the first Ethereum ETF filing in the Securities and Exchange Commission’s catalog, expiring May 23.
Here’s what the experts say.
Galaxy’s Mike Novogratz
A “widespread” twist in Washington over the last 24 hours has just upended the Ethereum ETF game, said Mike Novogratz, CEO of Galaxy Digital.
If the SEC’s change of heart had been politically motivated, “it would have been a seismic shift,” Novogratz said.
“If this is what really happened, prices will be much higher than here.”
Joe Lubin of Consensys
Expect a “shutdown” in demand for Ether, which will likely lead to a supply crunch and push prices higher, he says Joe Lubin, co-founder of Ethereum and founder of crypto infrastructure company Consensys.
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Institutions that have already gained exposure to Bitcoin ETFs “will most likely want to diversify into that second approved ETF,” Lubin said DL News.
“There will be quite a lot of natural, pent-up pressure to buy Ether” via ETFs, he said. She added the caveat that there will be less supply to meet that demand than when spot Bitcoin ETFs were approved in January.
Matt Hougan of Bitwise
“Cryptocurrencies are going mainstream, and this progress will push cryptocurrencies to all-time highs,” wrote Matt Hougan, Chief Investment Officer at Bitwise, in a blog post this week.
But Hougan suggested the catalyst wasn’t sudden optimism about ETFs.
”Something extraordinary happened in Washington: a bipartisan group of senators and representatives approved the proposal the first piece of pro-crypto legislation in Washington history.”
He referred to the bill aimed at repealing the SEC’s SAB 121 policy that imposed strict rules on the custody of cryptocurrencies.
“This newfound support for cryptocurrencies in Washington, whether or not we get Ethereum spot approval, is the ultimate proof point,” Hougan said.
Timo Lehes of Swarm
Timo Lehes, co-founder of blockchain platform Swarm, sees “significant capital inflows” into Ethereum once an ETF is approved.
“Once you commit to Bitcoin, you also look at something else as part of portfolio diversification,” he said DL News. “Naturally, investors are picking ETH as the next biggest crypto asset.”
While inflows will likely pale in comparison to those of the Bitcoin ETF launched in January, “it will still be enough to move the dial on its price action.”
Kaiko
Options traders who have been “crowding around” bullish options are now eyeing profits, said Adam McCarthy, an analyst at Kaiko.
But investors should be cautious, Kaiko said: “Hong Kong ETFs have not seen much demand and have already had mixed days with several days of net outflows. The lack of staking is also an important factor and will likely have a further impact on demand.”
He suggested looking at Grayscale’s $9 billion ETHE product, “if it experiences large outflows, that would be significant for prices.”
Bernstein
According to analysts, the approval of a spot ETF on Ethereum will lead to a 75% surge to $6,600. estimates created by Gautam Chhugani and Mahika Sapra, analysts at the research firm Bernstein.
They noted that the SEC’s approval of similar Bitcoin products in January spurred a 75% rally in the following weeks.
“We would expect similar price action for ETH,” Chhugani and Sapra said in a report this week.