Ether ETF Approvals in US Said to Boost Institutional Investment

The US has approved ETH ETFs from Grayscale, Bitwise, Blackrock’s iShares, VanEck, Ark 21Shares, Invesco Galaxy, Fidelity, and Franklin.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 27 May 2024 16:47 IST

Ether ETF Approvals in US Said to Boost Institutional Investment

Photo Credit: Twitter/ @NexonFI

The US SEC approved ETH ETFs to be listed on Nasdaq, CBOE and the NYSE

Highlights

ETH ETFs will let investors engage with Ether without using exchanges
Market commentators expect ETH price to reach $5,000 by May 2025
Ether ETFs estimated to grab upto 20 percent of BTC ETFs under management

The US SEC approved eight exchange traded funds (ETFs) for Ether this month. Through ETFs, investors can engage with Ether trading via traditional stock markets – rather than having to use a crypto exchange ecosystem. Interested members of the investor community will be able to check out ETH ETF listings on Nasdaq, CBOE, and the NYSE. This development marks another landmark decision for the crypto sector at a time when it is awaiting regulatory acceptance and lawful adoption as part of the global fintech industry, experts say.

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 big investors. The decision, furthermore, comes laden with benefits for the Ether ecosystem pitching it as an acknowledged crypto asset alongside Bitcoin.

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In conversation with Gadgets360, Raj Kapoor, who serves as a Regional Committee Member for the US SEC, highlighted some immediate impacts that this development could usher-in for the crypto industry.

“The primary impact would be that it would open up options for traditional investors, thereby increasing demand and liquidity. ETFs would now also offer a regulated and familiar investment vehicle, potentially reducing perceived risks associated with crypto, thereby attracting more institutional investors. This would in turn give confidence and validation to a much maligned sector,” Kapoor said.

In the coming weeks, Kapoor, has predicted a boost in crypto sector's market cap, which currently stands at $2.58 trillion (roughly Rs. 2,14,27,183 crore) as per CoinMarketCap.

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ETH ETFs have uplifted investor sentiment towards the cryptocurrencies, while also pushing Ether, the second most valued cryptocurrency after Bitcoin, on an upward trajectory pricewise. This notion, chiming in with Kapoor's prediction was shared with Gadgets360 by Sergei Gorev, the risk manager at the Swiss-based Web3 platform YouHodler.

“We anticipate the new ETH historical maximum price to surpass $5,000 (roughly Rs. 4.15 lakh) in the next twelve months. Over the last few weeks, quite a lot of money has entered the crypto market through the Ether network, especially after news about its potential ETF approvals had started to make the rounds. Looking ahead, with these developments like crypto ETF approvals our long-term estimation is to see the crypto market surpass the current gold market capitalisation of $16 trillion (roughly Rs. 13,29,68,800 crore),” Gorev said.

It is notable that the price movement of Ether did see a four percent drop after the ETF approvals, mirroring the trend observed after Bitcoin ETF approvals earlier this year. As of Monday, May 27, Ether is trading at $3,911 (roughly Rs. 3.24 lakh) on foreign exchanges after seeing a price hike of 2.54 percent. On Indian exchanges, meanwhile, ETH is hovering over the price point of 4,128 (roughly Rs. 3.42 lakh).

Ahead of US' presidential elections, a number of senators and asset management firms have expressed a positive outlook for the future of the crypto sector.

“SEC's approval of a spot ETF for Ether is the latest sign crypto is being accepted as a mature asset class,” tweeted Senator Cynthia Lummis as commenting on the development.

.@SECGov's approval of a spot ETF for Ether is the latest sign crypto is being accepted as a mature asset class and underscores the need for Congress to pass a regulatory framework to protect consumers and provide clear rules of the road for the industry.
— Senator Cynthia Lummis (@SenLummis) May 24, 2024

“SEC Nods to Ethereum ETFs A landmark approval from the SEC for spot Ethereum ETFs marks a pivotal moment, classifying ether as a commodity and enhancing its legitimacy. Despite facing $80 million (roughly Rs. 664 crore) in liquidations, Ethereum's price ticks up following the SEC's ETF approval, stirring market optimism,” said Greythorn Asset Management in its X post.

:earth_africa: Weekly News Highlights (21/05 - 27/05/2024) :globe_with_meridians:

1/ :tada: SEC Nods to Ethereum ETFs
A landmark approval from the SEC for spot Ethereum ETFs marks a pivotal moment, classifying ether as a commodity and enhancing its legitimacy. #Ethereum #ETF

2/ :us: Trump's Crypto Commitments… pic.twitter.com/W8nmycBAqH
— Greythorn Asset Management (@0xGreythorn) May 27, 2024

Currently, over 120 million Ether tokens are in circulation, as per CoinMarketCap and an infinite supply of tokens. While Bitcoin still remains the dominating asset on the crypto chart, market analysts see an expansion in Ether's ecosystem now that ETFs linked to the asset will be available on Nasdaq, CBOE, and the NYSE.

A blog by Jonas Gross, the Chairman of the Digital Euro Association (DEA) has cited estimations by Bloomberg's Eric Balchunas and James Seyffart in claiming that ETH ETFs might capture 10 percent to 20 percent of the assets under management seen in Bitcoin ETFs in the coming months.

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Further reading: Cryptocurrency, Ether, ETH ETFs, US SEC

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More