Liliya Filajtova
It's been less than a week since the U.S. Securities and Exchange Commission gave the green light to the country's first spot bitcoin exchange-traded funds, marking a major milestone that is expected to attract more investors to the cryptocurrency. 15 years old. However, since then, the price of bitcoin (btc-USD) price action has been disappointing, falling to $43.3K on Friday afternoon from ~$46K at the time of approval.
Instead, investors appear to have turned their attention to ether (eth-USD), the second-largest cryptocurrency, as the token's price advanced since the liquidation of 11 bitcoin ETFs. Since the beginning of 2024, eth is up 14.4%, while bitcoin (btc-USD) is up 3.7%, as seen in this chart.
Perhaps market participants are betting that ETFs that invest directly in ether (eth-USD) will be the next to get the nod from the SEC. bitcoin (btc-USD) has been surging for months in anticipation of ETFs containing the token coming to market, jumping more than 160% in the past year. But the weakness in btc since the approval suggests the months-long rally may be about to stop, at least for now.
“Now that the bitcoin ETF is officially live, the public image and trust in bitcoin is shifting towards a positive image,” said Nathan Leung, Senior Content Creator at Cryptonauts. “This will attract new investors and increase awareness. However, the hype is temporary… and it is safe to assume that an ethereum ETF will be designed for another cycle of hype.”
BlackRock (BLK) CEO Larry Fink Sees “Value in Holding an ethereum ETF,” He Said CNBC in an interview on Friday, a day after bitcoin ETFs went live. “These are just steps towards tokenization and I really think that's where we're going to go.”
Fink is not all words. The asset manager's iShares unit filed with the SEC to register a spot ether ETF (eth-USD). If that's not enough, BlackRock's (BLK) iShares bitcoin Trust (IBIT) was one of the bitcoin ETFs that debuted in the US on Thursday. The product has already raised about $1 billion of the total $4.6 billion in trading volume recorded by ETFs in total.
Other companies in line for ether ETF approval include: Grayscale, Invesco (IVZ), VanEck, and Ark.
Increased optimism over bitcoin ETFs (btc-USD) led to ether (eth-USD) underperforming its rival in 2023, with btc rising 165.1% compared to the 93.8% jump of eth. Now, it seems the tables are beginning to turn.
Aaron Rafferty, CEO of technology company StandardDAO, expects ether (eth-USD) to experience a btc-like bull run ahead of potential ETF approval. “If eth is next, then it is safe to expect a similar surge ahead of the event,” he said.
Some think that the approval of an ether ETF (eth-USD) will be a more difficult achievement, since SEC Chairman Gary Gensler considers all crypto assets, except bitcoin, as securities and therefore subject to securities regulations. The SEC considers bitcoin (btc-USD) to be a commodity.
“There are a number of applications to the SEC for eth spot ETFs and we should have a response in May of this year, and if they are denied, I would expect those applicants to continue to address the SEC's concerns and try again,” he said Chris Broderson. , CEO of EisnerAmper.
If the approval of such a product comes to fruition, cryptocurrencies would become even more legitimized as an asset class, he added, “as investors are investing in the asset, not the underlying technology. This could also pave the way for other cryptocurrencies, or baskets of cryptocurrencies, to be packaged into an ETF.”
