The cryptocurrency market is currently experiencing a period of exciting developments that are generating a great deal of excitement. It is difficult to find another market that generates as much enthusiasm as this. Despite the approval of spot Ethereum ETFs to be listed on US exchanges, both Bitcoin (BTC) and Ethereum (ETH) have seen a decline in the past 24 hours. This decline has triggered a classic market behavior known as “buy the rumor, sell the news,” resulting in a 4% drop in the price of ETH.
A Critical Moment for Ethereum
The approval of spot Ethereum ETFs was seen as a significant milestone for the cryptocurrency market, particularly for ETH, which is the second-largest cryptocurrency by market value. However, the approval did not have the expected effect on the price. Instead, it indicated a short-term downward trend. This can be attributed to the speculative nature of the market, according to Alex Kuptsikevich, a senior market analyst at FxPro. Kuptsikevich believes that the price of Ethereum could drop to around $3000, presenting an opportunity for large institutional investors to enter the market through ETFs. This situation is similar to the price drop experienced after the approval of a Bitcoin ETF in January.
No Trading Approval for ETFs Yet
While the necessary regulatory filings for ether ETFs have been approved by the SEC, they have not yet been approved for trading. The approval process involves additional review of S-1 filings before investors can purchase the funds. However, the approval of these filings opens up the possibility of listing on major exchanges. ETF trading has the potential to bring significant institutional capital into the cryptocurrency market. Standard Chartered predicts that there could be an inflow of up to $45 billion in the first year of trading. This influx of capital could support Bitcoin and Ethereum prices, leading to a long-term upward trend.
Hopeful Expectations for the Future
Despite the short-term price correction, some investors remain optimistic about the future performance of Ethereum. They expect a rally of over 60% in the coming months, supported by increasing demand for futures and spot purchases observed in recent weeks. This upward trend reflects confidence in the potential growth of Ethereum and the cryptocurrency market as a whole, despite current market dynamics.
Please note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own research.
