Spot Ether ETF Approval in the US Could Lead to a 60% Surge in Ethereum Price: QCP Capital
Singapore-based QCP Capital predicts that the approval of spot Ethereum exchange-traded funds (ETFs) in the United States could result in a significant rally, with the price of ETH potentially increasing by up to 60%. QCP Capital arrived at this forecast by drawing parallels to the market reaction following the approval of spot Bitcoin ETFs earlier this year. When spot Bitcoin ETFs were approved in January, Bitcoin experienced a substantial surge from $42,000 to over $73,000 within a two-week period after the ETFs began trading. QCP Capital stated that the market’s expectation for significant price movement is reflected in the current level of implied volatility, which is above 100%.
QCP Capital also noted that VanEck’s ETF had been listed by the Depository Trust & Clearing Corporation (DTCC), indicating a high likelihood of approval for spot Ethereum ETFs, with trading expected to commence as early as next week. The measure of implied volatility reflects the market’s anticipation of future price fluctuations for a financial instrument.
CryptoQuant, an on-chain analytics firm, reported increased buying activity on both centralized and blockchain-based crypto exchanges. On Tuesday, holders purchased over 100,000 ETH in spot markets, marking the highest daily level since September 2023. This surge in buying coincided with reports of a favorable decision regarding spot Ether ETFs, leading analysts to increase the odds of approval to over 75%. Additionally, open interest in ether-tracked futures reached a record high of $14 billion, accounting for 67% of bitcoin open interest.
However, QCP Capital’s analysts cautioned that a “significant price correction” could occur if the ETF application were to be dismissed. This reminder highlights the potential market volatility and uncertainty surrounding the outcome of the approval decision. Six issuers, including BlackRock, recently filed updated copies of their ether ETF proposals prior to the decision, removing plans to stake the token. This change suggests that staking activities may have posed regulatory obstacles.
In conclusion, if spot Ether ETFs are approved in the US, it could lead to a substantial surge in the price of Ethereum. However, there is also a possibility of a major price correction if the ETF application is denied. The market is closely watching for the approval decision, with strong expectations for significant price movement.