SEC Poised to Approve Ethereum ETFs, Resulting in Surge in Ether (ETH) Price Amid Speculation of Regulatory Shift
In a surprising turn of events, the price of Ether (ETH) skyrocketed on Monday as traders anticipated the Securities and Exchange Commission (SEC) to greenlight Ethereum exchange-traded funds (ETFs) in the coming days, following rumors of a significant regulatory reversal.
ETH experienced a gain of over 10%, reaching the $3,400 mark.
Eric Balchunas, an ETF analyst at Bloomberg, took to Twitter to reveal that he and fellow analyst James Seyffart had increased the likelihood of approval to 75%, prompted by insider information suggesting that the SEC could be making a complete reversal in its stance.
With deadlines for approval, denial, or extension of ETF applications looming as early as Thursday, this week may witness the long-awaited approval.
Prior to the emergence of these rumors, the prevailing expectation was that Ethereum ETFs would face rejection. The SEC had reportedly been considering classifying Ether as a security in recent months.
The question of whether the SEC will approve Ethereum ETFs has been a subject of interest, given the successful track record of Balchunas and Seyffart in predicting crypto ETF approvals. They were vocal advocates of the notion that spot Bitcoin ETF approvals would materialize in 2023, much to the skepticism of the market at the time.
Consequently, a substantial repricing of the Ether market is currently underway, with investors eagerly betting on the SEC’s approval of spot Ethereum ETFs, which is driving the price upwards. The rationale behind this enthusiasm is that the approval of Ethereum ETFs would provide institutional investors with much easier access to Ether, a phenomenon that has previously significantly boosted the price of Bitcoin in the long run.
In terms of technical analysis, the recent surge in the Ether price has caused it to break out of a downward trend channel that had been in effect since mid-March. Moreover, ETH has surpassed its major moving averages and has found strong support at its 2024 uptrend.
As a result, experts predict a bullish near-term outlook for the Ether price. The next target for an upward movement is the April highs above $3,700, followed by a potential test of the March highs above $4,000.
If the SEC approves Ethereum ETFs, it is highly likely that the Ether price will reach $4,000 in the near future.
Furthermore, the potential approval of Ether ETFs coincides with an already improving market sentiment. The recent release of US jobs and CPI inflation data for April has alleviated concerns about an overheating economy, leading to hopes that the Federal Reserve will implement multiple interest rate cuts throughout the year.
Last week, inflows into spot Bitcoin ETFs increased as over 500 asset managers disclosed their ETF exposure via 13F filings. Traders were already discussing the possibility of Bitcoin retesting its record highs, a sentiment that is likely to intensify with the imminent arrival of Ethereum ETFs.
Upcoming events, such as Nvidia earnings and the release of FOMC minutes, could serve as catalysts for further upward movement in the market.
Before Monday’s surge, the Ether price had been lagging behind Bitcoin. However, an improved market sentiment coupled with the introduction of Ethereum ETFs could potentially propel the Ether price back to its record highs near $4,900.
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