Experts Talk How High Ethereum Could Go With ETF Approval

Tomorrow is the final deadline for approval of VanEck's spot ethereum exchange-traded fund (ETF) in the US, and expectations are high. James Seyffart, Bloomberg ETF Analyst shared that an approval movement “is happening,” despite regulatory indicators pointing in the opposite direction as of Monday.

As a result, ethereum (eth) jumped up to 21% in less than 48 hours and was just 22% away from its all-time high of $4,878.26. ethereum” target=”_blank” rel=”noopener nofollow noreferrer”>according to the CoinGecko data aggregator. bitcoin (btc) jumped 96% in two months before the approval of the first spot bitcoin ETF in the US and hit its all-time high two months later.

James Davies, co-founder and CPO of crypto Valley Exchange, highlights that the case of bitcoin was different. “In that case, however, everything came together (ETF, bitcoin halving, and a significant decline in global inflation) and aligned to boost bitcoin. “ethereum has already seen a surge in the crypto cycle and global market sentiment,” he shares.

Although Davies sees ethereum ETF inflows as having a substantial impact, driving eth to new all-time highs, it may prove difficult for ethereum to replicate btc's movement after the funds are approved. “However, it presents a great story of steady growth for the remainder of 2024.”

Ruslan Lienkha, head of markets at YouHodler, also shares the view that an ethereum ETF could lead to a sharp rise in the price of eth. Furthermore, this move may not be fully priced in, and a significant rise is yet to be seen. “If so, it will be a powerful boost for the entire crypto market and a stimulus for the growth of other currencies,” Lienkha added.

Bitfinex analysts believe that an ethereum ETF spot approval could play out the same as the bitcoin spot ETF approval, which was “a news selling event before a long-term bullish outlook was triggered, triggering a rebound of several months”. As for inflows, they expect a similar level consistent with eth's market capitalization.

The current move from below $3000 to $3800 is a result of the market pricing in the higher odds of an ETF approval. Importantly, market participants often get ahead of themselves and value probabilities as absolute, meaning that a 75% chance of approval by Bloomberg analysts could potentially be valued as 100%.

Marko Jurina, CEO of Jumper.Exchange, noted that btc rose almost 65% following spot bitcoin ETF trading in the US. Therefore, a similar move would push eth “well beyond its all-time high.” former”. Zentner also believes that the approval could trigger crypto market growth by the second half of 2024.

And if…?

Despite the optimism over the approval of the ethereum ETF, there is still a small chance of rejection. Furthermore, as highlighted According to Seyffart, a good part of investors do not fully understand the current movement, since approval does not translate into immediate negotiation. Both scenarios could then upset investors.

However, in light of recent events, those events are now being ruled out, says James Davies of crypto Valley Exchange. On the other hand, Marko Jurina of Jumper.Exchange believes that both possible negative events are already priced in.

“When btc spot ETFs first hit the market, there was actually a brief sell-off with some taking profits before the rally resumed. Additionally, given the volatile nature of the market, good and bad news provide ample opportunities for market makers to create more violent price swings, so blood on the streets is definitely possible. More problematic for the eth community (if there is no approval) would be the loss of a narrative as a catalyst,” Jurina added.

Furthermore, a slight decline followed by a period of consolidation is also possible, shares Ruslan Lienkha of YouHodler. “The approval of the ethereum ETF is just a matter of time. The SEC will approve it sooner or later after the status of eth is clarified, and it matters little whether it is recognized as a commodity, a security, or something else. For now, fundamentally, nothing will change for eth. “It will remain the second largest cryptocurrency in the industry even without ETF.”

Even if an unlikely rejection occurs, Bitfinex analysts describe a “layered” scenario, which could end in a “hard rejection” or a “soft rejection.” A hard rejection would include eth being considered a security, while a soft rejection would be limited to ETF proposals.

“The first could be very bearish and lead to a pullback of the entire current bullish movement. The latter could generate more speculation about a future approval in the event of a new appeal,” Bitfinex analysts concluded.