Bitcoin
Seven Experts on What an Ethereum ETF Nod Means for Crypto Prices – DL News
- What will an Ethereum ETF mean for the markets?
- Mike Novogratz, from Galaxy, and Joe Lubin, co-founder of Ethereum, are among the experts weighing in on the matter.
Ethereum has soared this week amid a wave of optimism over U.S. approval for exchange-traded funds that track the cryptocurrency.
The reasoning behind the sudden about-face is up for debate, but market watchers are generally aligned on what a nod from the regulator would do for Ethereum and other cryptocurrencies.
Asset manager VanEck is the first Ethereum ETF application in the Securities and Exchange Commission’s stack, expiring on May 23.
Here’s what the experts are saying.
Galaxy’s Mike Novogratz
A “widespread” pivot in Washington over the last 24 hours just turned the tide on the Ethereum ETF, said Galaxy Digital CEO Mike Novogratz.
If the SEC’s change of heart was politically motivated, “that’s a seismic shift,” Novogratz said.
“If this is what really happened, prices will be much higher than here.”
Joe Lubin of Consensys
Expect a “floodgate” of demand for Ether, which will likely lead to a supply crunch and drive up prices, says Joe Lubin, co-founder of Ethereum and founder of cryptographic infrastructure company Consensys.
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Institutions that have already gained exposure to Bitcoin ETFs “will likely want to diversify into this second approved ETF,” Lubin said. DL News.
“There will be a lot of natural, pent-up pressure to buy Ether” through ETFs, he said. He added the caveat that there will be less supply to accommodate this demand than when spot Bitcoin ETFs were approved in January.
Matt Hougan from Bitwise
“Crypto is in the process of going mainstream and this progress will take crypto to historic highs,” Bitwise chief investment officer Matt Hougan wrote in a blog post this week.
But Hougan suggested the catalyst wasn’t sudden optimism about ETFs.
“Something remarkable happened in Washington: a bipartisan group of senators and representatives approved the first pro-crypto legislation in Washington history.”
He referred to the bill to repeal the SEC’s SAB 121 policy that imposed strict rules on cryptocurrency custody.
“This new support for crypto in DC – whether we get local Ethereum approval or not – is the latest proof,” 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 allocate Bitcoin, you also look for something else as part of portfolio diversification,” he said DL News. “Naturally, investors choose eth as the next biggest crypto asset.”
While the inflows will likely pale in comparison to those from the Bitcoin ETF when it launched in January, “it will still be enough to change the grip on its price action.”
Kaiko
Options traders who “clumped” bullish options are now chasing gains, said Adam McCarthy, an analyst at Kaiko.
But investors should be cautious, said Kaiko: “Hong Kong ETFs have not seen much demand and have already had mixed days, with several days of net outflow. No staking is also a major factor and will likely impact demand further.”
He suggested looking at Grayscale’s $9 billion ETHE product, “if it sees large outflows, that would be significant for prices.”
Bernstein
Approval of a spot Ethereum ETF will lead to a 75% increase to $6,600, according to estimates made by Gautam Chhugani and Mahika Sapra, analysts at 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 expected similar price action for ETH,” Chhugani and Sapra said in a report this week.