Spot Ether Exchange Traded Funds (ETFs) have received official approval from the US Securities and Exchange Commission (SEC), pending the greenlight on S-1 registration statements. However, the price of ETH has not responded positively to this milestone, declining by 5% in the last 24 hours.
The approval of spot Ether ETF applications by the SEC has been reported by Crypto News Flash, setting the stage for the product to start trading later this year. The approval includes ETFs from VanEck, BlackRock, Fidelity, and others, following calls from lawmakers to apply the same principles used for spot Bitcoin ETFs.
Bloomberg analyst James Seyffart explained that the trading of Ether ETFs depends on the completion of the S-1 registration statements, despite the approval of their 19b-4 filings. He mentioned that this process could take anywhere from a few days to several months. Surprisingly, the approval has not caused a price surge for ETH as expected. Currently, ETH is trading at $3,692, having declined by 5% in the last 24 hours.
Crypto commentator Zach Rynes noted that most investors who wanted to buy the approval have already done so, which could explain the lack of movement in the price. This observation is supported by the 22% surge in the last seven days after rumors of potential approval started circulating.
Analysts have commented on the price reaction of Ethereum (ETH) to the approval. Another reason for the lack of movement is that the ETFs have not been cleared to launch yet. VanEck has already submitted its amended S-1 filing to the Commission, and once it is approved, the price is expected to experience a significant increase due to ETF inflows. Crypto research firm Second Mountain shares this view, predicting that Ethereum could reach as high as $4,891.70 after launch. However, some analysts argue that the immediate price impact could be slow, similar to what was observed after the approval of the spot Bitcoin ETF in January.
Concerns have also arisen regarding Grayscale’s plan to convert its Ethereum Trust (ETHE) into a spot Ether ETF. Experts believe this could lead to a massive outflow, similar to what happened with its spot Bitcoin ETF. Data confirms that $17.6 billion in assets have been shed by the GBTC since it started trading. Despite this, independent Ethereum educator Sassal believes that ETH is undervalued and has had only three days to “price in the ETF approval.”
Crypto trader Rho Rider issued a warning about Grayscale’s announcement, pointing out that $11 billion worth of ETH has been trapped for seven years.