Speculative interest in Ether is intensifying after the US Securities and Exchange Commission (SEC) unexpectedly permitted exchange-traded funds (ETFs) for the digital asset.
This regulatory pivot catalyzed a significant 26% increase in the value of Ether over the past week, marking the largest weekly gain since the 2021 crypto bull market, according to data compiled by Bloomberg.
Investors might be encouraged by the successful debut of US-listed spot Bitcoin ETFs in January, which have accumulated $59 billion in assets. However, Ether’s lesser-known status compared to Bitcoin makes predicting investor demand more challenging.
Unlike holding the tokens directly, spot Ether ETFs will not involve staking, a process that rewards participants for pledging tokens to support the Ethereum blockchain. This exclusion could dampen interest in the funds.
Further approvals from the SEC are required before firms like BlackRock Inc. and Fidelity Investments can launch these products, and the timeline for these approvals remains unclear.
The approval process is not yet complete, as the ETF issuers still need the SEC to approve their registration statements detailing investor disclosures. While there is no set timeline for this, industry participants believe that many issuers are ready to launch once they receive the green light. However, the SEC’s corporate finance division is expected to request changes and updates in the coming days and weeks.
As of 10:10 a.m. UTC on May 27, Bitcoin is trading at around $68,496, down 0.9% in the past 24 hours, while Ether is trading at roughly $3,902, up 2.6% in the past 24-hour period.
According to a report by Bloomberg News, Chris Weston, Head of Research at Pepperstone Group, noted in a statement that the risk for Ether remains on the upside, suggesting that pullbacks should be seen as buying opportunities. The report also mentions that data from the Deribit trading platform indicates that the highest concentrations of bullish options bets anticipate Ether reaching $5,000 or higher. Ether’s current all-time high is $4,878, achieved on 10 November 2021.
The Bloomberg report went on to say that the gap between the T3 Ether Volatility Index, which reflects expected 30-day price swings based on options prices, and a similar index for Bitcoin is at its widest since at least the beginning of 2023. This suggests that speculators anticipate more significant price fluctuations for Ether than for Bitcoin.
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