Potential Rejection of Ethereum Spot ETFs Not a Big Setback, Expert Says

The approval of US spot ethereum exchange-traded funds (ETFs) could improve ethereum's market valuation. However, even if these ETFs are rejected, it may simply be a bump in the road rather than an obstacle, suggested Jupiter Zheng, head of research at HashKey Capital.

“If the ETF is rejected, it will not be as bearish as the market is not pricing it yet and we still have bitcoin ETFs as an entry for traditional funds,” Zheng said. bitcoin-halving-sec-etetf-decision” target=”_blank” rel=”noopener nofollow noreferrer”>said Cointelegraph earlier this month.

Zheng also expressed optimism about the possible bullish effect of an approved ETF, especially one that includes staking, which could trigger a wave of short liquidations and further boost the price of ethereum.

The Securities and Exchange Commission (SEC) is expected to make a decision on ethereum spot ETFs within the next month. Unlike the situation with bitcoin spot ETFs, where progress reports were abundant, the current atmosphere surrounding ethereum ETFs is less optimistic.

Bloomberg ETF analyst Eric Balchunas has reduced x.com/EricBalchunas/status/1767204301372297274″ target=”_blank” rel=”nofollow noopener noreferrer”>the probability of approval at 35%. Similarly, analysts at Barron's and JPMorgan remain skeptical due to the lack of commitment from the SEC.

VanEck, one of the ethereum spot fund issuers, said in a recent interview with CNBC that the SEC's response could be an outright rejection.

The odds are low, but the timely approval of the ethereum ETF may not be the only source of momentum in the markets during this period. Prominent cryptocurrency investor Jelle believes that a bullish period for ethereum is yet to come.

According to him, there is a similar price pattern on the Ether chart before the recent bitcoin halving on April 20, 2024, compared to that before the halving in May 2020.

<blockquote class="twitter-tweet” data-width=”500″ data-dnt=”true”>

Latest twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>#bitcoin halve was twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>$ethIt is the signal to start running hard.

Is this time different? I do not think. pic.twitter.com/fGIiGYufe0

– Jelle (@CryptoJelleNL) twitter.com/CryptoJelleNL/status/1775819813966745765?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>April 4, 2024

In 2020, the price of Ether was around $210 before the halving and then rose to $433 on August 14, an increase of 106% according to data from CoinMarketCap. Jelle sees this historical pattern as a potential indicator of another price increase for eth following the recent halving.

While the fate of ethereum spot ETFs remains speculative in the US, in Hong Kong, such offerings are set to debut trading.

Earlier this month, Hong Kong's securities watchdog gave the green light to bitcoin and ethereum ETF applications from four asset managers, including HashKey Capital, Bosera Capital, Harvest Global and China Asset Management.