Analysts from Bernstein, Gautam Chhugani and Mahika Sapra, predict that the price of Ethereum will soar to $6,600 once a spot ETF is approved. This surge is expected to mirror the increase in Bitcoin prices after a similar product was approved by the SEC in January.
Yesterday, the value of Ethereum experienced a sudden spike as optimism grew regarding the approval of exchange-traded funds (ETFs) that track cryptocurrencies in the US. While the reasons for this shift in sentiment are debated, experts agree that the approval of Ethereum ETFs would have a profound impact on the crypto market.
VanEck, an asset manager, has already submitted the first application for a spot Ethereum ETF to the SEC. A decision on this application is expected by May 23. Mike Novogratz, the CEO of Galaxy Digital, noted that there has been a significant change in the regulatory landscape in Washington in the past 24 hours.
Joe Lubin, co-founder of Ethereum and founder of Consensys, predicts a surge in demand for Ether once the ETF is approved, leading to a supply shortage and higher prices. Lubin suggests that institutions currently invested in Bitcoin ETFs will likely diversify into Ethereum once its ETF is approved.
Matt Hougan, the Chief Investment Officer at Bitwise, believes that the mainstream adoption of Ethereum will drive its price to all-time highs. He attributes this not only to ETF optimism but also to legislative progress. Bipartisan lawmakers passing pro-crypto legislation and repealing strict rules on crypto custody set by the SEC have played a significant role.
Timo Lehes, co-founder of blockchain platform Swarm, expects a substantial influx of capital into Ethereum following the approval of ETFs. He explains that investors who have already allocated to Bitcoin will seek diversification and choose ETH as the next prominent crypto asset. While these inflows may not match those seen during the launch of Bitcoin’s ETF, they will still have a significant impact on Ethereum’s price.
Ethereum has sustained its rally since yesterday and is currently valued at $3,722. If the ETFs are approved, the market could experience an even more bullish response, potentially pushing Ethereum’s price beyond its current range and testing higher resistance levels at $4,000 or even $4,500.
Adam McCarthy, an analyst at Kaiko, points out that options traders who have taken bullish positions are now seeing potential gains. However, he urges investors to remain cautious as the lack of staking could affect demand. McCarthy advises keeping an eye on Grayscale’s $9 billion ETHE product, as significant outflows could have a notable impact on prices.