The US SEC approved eight exchange-traded funds (ETFs) for Ethereum this month. ETFs allow investors to participate in Ether trading through traditional stock markets without using the cryptocurrency exchange ecosystem. Interested members of the investor community can check out listings of the ETH ETF on Nasdaq, CBOE, and NYSE. Experts said this development is another landmark decision for the cryptocurrency sector at a time when the sector is awaiting regulatory approval and legal adoption as part of the global fintech industry.
The US has approved ETH ETFs from Grayscale, Bitwise, Blackrock’s iShares, VanEck, Ark 21Shares, Invesco Galaxy, Fidelity and Franklin.
As far as the investor community is concerned, the approval of these Ether ETFs in the US has diversified investment and liquidity tools for small and large investors. Moreover, this decision includes the benefit of introducing the Ether ecosystem as a recognized cryptocurrency asset alongside Bitcoin.
In a conversation with Gadgets360, Raj Kapoor, who serves as a regional committee member for the US SEC, highlighted the immediate impact these developments could have on the cryptocurrency industry.
“The biggest impact is that it increases demand and liquidity by opening up options for traditional investors. ETFs now provide a regulated and familiar investment vehicle, potentially reducing the perceived risk associated with cryptocurrencies, thereby attracting more institutional investors. This, in turn, will provide trust and validation to a very maligned sector,” said Kapoor.
In the coming weeks, Kapoor expects the current market capitalization of the cryptocurrency sector to reach $2.58 trillion (roughly Rs. 2,14,27,183 crore), according to CoinMarketCap.
The ETH ETF has boosted investor sentiment toward cryptocurrencies while also fueling the rise in the price of Ether, the second most valuable cryptocurrency after Bitcoin. This concept, which is in line with Kapoor’s prediction, was shared with Gadgets360 by Sergei Gorev, risk manager at Swiss-based Web3 platform YouHodler.
“We expect the new ETH historical high price to exceed $5,000 (roughly Rs. 4.15 lakh) in the next 12 months. Over the past few weeks, quite a bit of money has flowed into the cryptocurrency market via the Ether network. This is especially true after news of a potential ETF approval began circulating. Going forward, with these developments such as the approval of cryptocurrency ETFs, our long-term estimate is to see the cryptocurrency market surpass the current gold market cap of $16 trillion (roughly Rs. 13,29,68,800 crore).” Gorev said.
It is noteworthy that Ether’s price movement fell 4% following the ETF’s approval, mirroring the trend observed following the Bitcoin ETF’s approval earlier this year. As of Monday, May 27, Ether is trading at $3,911 (roughly Rs. 3.24 lakh) on the forex after seeing a price increase of 2.54%. Meanwhile, on Indian exchanges, the price of ETH is hovering around 4,128 (roughly Rs. 3.42 lakh).
Ahead of the US presidential election, a number of senators and asset management firms have expressed positive views on the future of the cryptocurrency sector.
“The SEC’s approval of the Ethereum spot ETF is the latest sign that cryptocurrencies are being accepted as a mature asset class,” Senator Cynthia Lummis said on Twitter.
.@SECGov’s approval of a spot ETF for Ether is the latest sign that cryptocurrencies are being accepted as a mature asset class and highlights the need for Congress to pass a regulatory framework to protect consumers and provide clear rules for the industry.
— Senator Cynthia Lummis (@SenLummis) May 24, 2024
“SEC Approves Ethereum ETF The SEC’s landmark approval of a spot Ethereum ETF marks a significant moment in classifying Ethereum as a commodity and strengthening its legitimacy. Despite facing liquidation of $80 million (roughly Rs. 664 crore), the price of Ethereum rose following SEC’s approval of the ETF, fueling market optimism,” Greythorn Asset Management said in an X post.
:earth_africa: Weekly News Highlights (21 May – 27 May 2024) :globe_with_meridians:
1/ :tada: SEC approves Ethereum ETF
The SEC’s landmark approval of a spot Ethereum ETF marks a significant moment in classifying Ethereum as a commodity and strengthening its legitimacy. #Ethereum #ETF2/ :us: Trump’s cryptocurrency promise… pic.twitter.com/W8nmycBAqH
— Greythorn Asset Management (@0xGreythorn) May 27, 2024
There are currently more than 120 million Ether tokens in circulation, according to CoinMarketCap, and token supply is infinite. While Bitcoin still remains the dominant asset on the cryptocurrency charts, market analysts see Ether’s ecosystem set to expand as ETFs linked to this asset are now available on Nasdaq, CBOE, and NYSE.
Digital Euro Association (DEA) President Jonas Gross’s blog cites estimates from Bloomberg’s Eric Balchunas and James Seyffart, claiming that the ETH ETF could account for 10-20% of the assets under management seen by the Bitcoin ETF in the future. I did. month.
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