Title: Ethereum’s ETF Approval: Experts Weigh in on Price Impact
Author: Eric Johansson, DL News
Translated by: Ismay, BlockBeats
Editor’s Note: With the approval of the Ethereum ETF in the United States, the market’s enthusiasm for Ethereum has surged. Industry experts predict a new round of price increases for Ethereum, driven by demand from institutional investors. However, they also warn of potential market challenges and volatility. This article gathers various perspectives to explore the future prospects of this significant market trend.
In May, Ethereum skyrocketed by over 30% to reach $3,800 after the approval of the ETF in the United States. Market observers now anticipate that Ethereum will hit a new high of over $5,000 in early June. As the dust settles, the market speculates on Ethereum’s next move.
Here are the experts’ opinions:
Galaxy:
Mike Novogratz, CEO of Galaxy, stated that the “broad” shift in Washington led to a change in the SEC’s attitude towards the Ethereum ETF. If the SEC’s change in attitude is politically motivated, “that would be a major shift,” and “if true, the price will be much higher than it is now.”
However, since he made these comments, President Joe Biden has fulfilled his threat to veto the bipartisan-supported pro-cryptocurrency bill.
FRNT Financial:
David Brickell, Head of International Distribution at FRNT Financial, believes that both Bitcoin and Ethereum will reach new all-time highs by the end of June. He states that the approval of the Ethereum ETF, positive economic outlook, and a series of cryptocurrency-friendly votes on Capitol Hill indicate that these two leading cryptocurrencies will enjoy strong tailwinds in the coming weeks. “Seeing Bitcoin reach $80,000 and Ethereum reach $5,000 would not surprise me.”
CCData:
Jacob Joseph, a research analyst at CCData, not only predicts that Ethereum will set new records but also believes that investors will invest $3.9 billion in the US Ethereum ETF within the first 100 days of its launch. He derived this figure from the performance of the top 10 Bitcoin ETFs in the first 100 days.
However, he warns that Ethereum may face challenges from outflows from the Grayscale Ethereum Trust, which could weigh on market sentiment. According to BitMEX research, the Grayscale Bitcoin Trust has experienced outflows of over $17.7 billion since its launch in January, with these funds flowing mainly into lower-cost funds.
OKX:
Lennix Lai, Chief Commercial Officer at OKX, states that the Ethereum ETF will trigger a new wave of institutional investor demand. He suggests that they may invest $500 million in the Ethereum ETF in the first week. “This could be as important, if not more important, than the approval of the Bitcoin ETF.”
TzTok-Chad:
The growing optimism in the industry has prompted traders to invest approximately $3.4 billion in bullish options, betting that Ethereum will surpass $4,000 before June 28.
TzTok-Chad, the anonymous founder of decentralized options exchange Stryke, states that the positioning in the derivatives market indicates that many traders are even targeting prices above $5,000.
However, he warns that the path to reaching new records will not be smooth and expects some volatility.
Consensys:
Joe Lubin, the founder of Consensys and co-founder of Ethereum, believes that there will be a “flood-like” increase in demand for Ethereum, which could lead to supply shortages and drive up prices.
Lubin states that institutions that have already entered the Bitcoin ETF market “are likely to want to diversify investments into a second approved ETF.”
He says, “The natural and long-suppressed demand for Ethereum through ETF purchases will be significant, but the supply to meet that demand will be less than when the spot Bitcoin ETF was approved in January.”
Bernstein:
Analysts Gautam Chhugani and Mahika Sapra from research firm Bernstein state that Ethereum ETF inflows should not be expected to reach the levels of Bitcoin funds.
In their report on June 3, they state that the ETF represents an opportunity to take advantage of the “pent-up demand from the same participants as the Bitcoin ETF, which may result in a lower allocation to Ethereum.”
“Given Ethereum’s supply dynamics (staking, smart contracts, holding data), Ethereum should see positive price performance when the ETF launches (expected at some point in the next few days/this month),” Chhugani and Sapra said.
Kaiko:
Adam McCarthy, an analyst at Kaiko, suggests that traders focusing on bullish options are now seeing returns.
However, he warns that the Hong Kong ETF has not seen significant demand and has experienced several days of net outflows. The lack of staking is also an important factor that could further impact demand.
He advises keeping an eye on Grayscale’s $9 billion ETHE product, as “a significant outflow of funds would have a major impact on the price.”
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