Hey there, crypto fame! If you've been keeping tabs on the scene, you know the big news - the SEC gave the green light to not one, but eight spot Ether ETFs. yeah, you heard right – after years of anticipation and speculation, we're finally in ETF territory for our beloved Ethereum.
But hold on, before you start celebrating, popping champagne bottles, or planning their mega-yacht purchases. There's a question that keeps everyone wondering – why aren't we rich yet?
On May 23, the U.S. Securities and Exchange Commission (SEC) gave the green light to eight spot Ether ETFs, allowing them to be listed on their respective exchanges. Ether (ETH), trading at $3,702, experienced a 3.4% dip right before the announcement.
However, it quickly rebounded by approximately 5% and is currently trading at $3,806. This big news was expected to send Ether's price soaring. But instead, Ether's price has hardly moved, leaving everyone confused.
The hope was that once approved, a lot of institutional money would rush into Ethereum, boosting the price a lot. People in the crypto world imagined they'd retire early and buy fancy cars. But, things didn't change much after the approval.
Ether's price didn't change much; it dropped a little before the announcement and then went up slightly afterward, settling around $3,800 now. There wasn't a big jump to $10k or $20k as some people had expected. What do you think happened?
Some calm voices in the crypto community suggest a couple of reasons why this might not be as big a deal as it seems:-
The approval was already priced in
Well-known crypto analyst Zach Rynes argues that the lack of a major price jump simply reflects that "everyone who wanted to buy the approval already did." In the week leading up to the SEC decision, Ether had already spiked around 29% on the increasing speculation and reports that approval was likely coming.
The ETFs haven't actually launched yet
This is probably the biggest factor. Sure, the ETFs got approved by the SEC to be listed on exchanges. But that doesn't mean they instantly start trading. There's still a bunch of paperwork and filings that need final approval, like the S-1 registration statement with all the fun details about finances, risks, and the securities being offered.
The VanEck company already submitted their amended S-1, but analysts warn it could be weeks or even months before they all get the final green light to actually launch. Once trading begins, that's when we'll likely see a massive influx of new investment capital flowing into the Ethereum ecosystem from big institutional players who want ETF exposure.
Rynes and others believe the eventual capital inflows from the ETFs going live could reach into the billions. The crypto research firm Second Mountain predicted "a massive capital inflow in the first week, potentially reaching billions" right before the approvals came through.
However, some skeptics urge caution about assuming an immediate moonshot for Ether's price. They point to what happened with Bitcoin - when spot Bitcoin ETFs launched in January, BTC's price actually dropped around 17% initially. It took about three months before spiking over 90% higher.
There are also concerns about the potential for major sell-offs and outflows from Grayscale's Ethereum Trust product (ETHE) that has been holding investors' Ether stuck for 7 years while awaiting this ETF approval. When the Grayscale Bitcoin Trust (GBTC) opened up post-ETF approval, it lost over $17 billion in assets as investors fled.
As the anonymous trader Rho Rider warns, now there's "$11 billion+ of ETH that's been trapped for 7 years" in ETHE that could see mass withdrawals weighing on Ether's price initially.
Even though people weren't expecting too much in the short term, the Ethereum community, which always looks on the bright side, believes that ETH is just really undervalued. One educator, Sassal, even called it "stupidly undervalued." What this means is that they think ETH is worth a lot more than what it's currently being traded for.
When the news about the ETF approval came out, the market didn't have much time to think about it or adjust the price accordingly. It's like when you hear some big news but haven't had a chance to really think about what it means yet. So, even though the market reacted a bit, it hasn't fully processed or "priced in" the impact of that news on ETH's value.
They highlight Ethereum's essential role as the foundation for many fast-growing areas like DeFi, NFTs, blockchain gaming, the metaverse, and web3 in general. With major upgrades like the merge and sharding on the way, Ethereum's uses and value will keep growing.
Here you can read about Bitcoin ETFs and learn how to master them and why they are beneficial.
In a fun bit of crypto irony, while Ethereum's price dipped on the ETF news, the ultra-meme token Pepe (PEPE) hit a new all-time high in the hour following the announcement, spiking 5% to $0.00001585. Proving once again that in the wacky world of crypto, fundamentals often take a back seat to hype and vibes.
Meanwhile, Bitcoin shrugged off after the Ethereum ETF news entirely, sliding a modest 1.20% before recovering made a low of $66,400. Currently, BTC is trading near $69,400 and up by 3% in the last 24 hours. Bitcoin maxis likely welcomed the ETF approval as a rising tide that could lift all crypto ships.
So for those Ethereum investors hoping to quit their jobs and buy islands after the ETF approval, the outlook seems to be...keep waiting. Once the actual ETF products start trading and attracting billions in new investment, that's when we could finally see Ether's price really take off. Of course, there's no guarantee - the crypto markets are infamously unpredictable.
But for those true believers in the long-term value and potential of Ethereum, the ETF green light is just another milestone in an inevitable journey. As the ecosystem grows and evolves, ETH's fundamentals should eventually overpower any short-term pricing quirks or fluctuations.
Maybe not lambo money yet. But hopefully a nice little boost to the retirement funds, at least. The race for mass adoption continues.
Also read - Solana ETFs: A Looming Possibility and Its Potential Impact
