Ethereum spot ETF has become a hot topic of discussion in the market in recent days. Investors are optimistic that Ethereum ETF can replicate the money-making ability of Bitcoin ETF at that time, causing a large amount of funds to flow into the market, pushing Bitcoin from US$66,000 to US$71,000 in a short period of time. It then fell back to US$68,000 due to the tightening remarks of Fed officials. The overall weekly increase is still around 5%.
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Ethereum has become the best performing cryptocurrency, with a weekly increase of 20% and a price of over $3,900. We have received news that the SEC has proactively asked fund companies to update the filing documents for the Ethereum ETF. Media sources also said that the SEC is reviewing the application for the Ethereum spot ETF. The next confirmation point will be the review results of the applications of several fund companies in June. Assuming that it is as the media has reported, the Ethereum ETF may be successfully approved in the third quarter.
In addition to the Ethereum ETF, the market is also exploring other similar cryptocurrency ETFs, such as the Solana ETF or the BCH ETF. Although these cryptocurrencies are difficult to issue ETFs and list on the U.S. stock market like digital commodities due to their overly concentrated control, the industry also hopes that other currencies can take over after the Ethereum ETF craze ends.
Compared with Bitcoin, the Ethereum ETF will undoubtedly bring another wave of growth to the cryptocurrency market. Wall Street has also been desperately pouring money into cryptocurrencies in recent days. The Bitcoin ETF has seen net inflows of funds for a week in a row, with $100 million to $300 million of funds net buying Bitcoin every day. However, Bitcoin experienced a wave of pullbacks this week, indicating that the original users of the cryptocurrency market were selling at highs.
Although some people have begun to cash in profits at higher prices, the current average cost of short-term investors does not have much unrealized profits. Unless there is a major event, there is no need to worry too much about selling pressure. Coupled with the continued influx of funds into Bitcoin ETFs, the chances of Bitcoin prices continuing to rise in the short and medium term are still relatively high. However, the mentality of retail investors is now more greedy, and subsequent transactions will be more difficult. I still believe that the reasonable price of Bitcoin in a high-interest environment is around US$70,000.
Bitcoin’s new high is just around the corner
Funds for the U.S. stock market and cryptocurrency are still plentiful. Both the stock market and the cryptocurrency market have reached reasonable valuations, and some are even quite expensive. Some market shorts have long been ready to move. In recent days, there have been many analysis reports that are bearish on the market. Some institutions are trying to reverse the trend and make profits by short the stock market. A similar situation has occurred in cryptocurrencies. When the ETF theme suddenly appeared a few days ago, causing the currency price to soar, many short traders suffered heavy losses.
But there is really no short-selling theme to play with now. The only event in the market in the near future is that interest rate policy may be further tightened. This week, many Fed officials made comments on future interest rate policy, and the general trend is "the Fed will not raise interest rates again, and the interest rate cut will depend on whether the annual inflation rate can be reduced to 2%." To be honest, it has no lethality to the market, and there is no sign of a change in the slowing inflation trend.
No matter how hawkish the Fed is, it is impossible to raise interest rates. A rate cut will only take one or two quarters. The market has already digested the risk of interest rate policy. Even if an unexpected event occurs, there will not be large-scale market fluctuations. Funds will continue to flow into Bitcoin ETFs. In this case, as the amount of Bitcoin in circulation decreases, the current reasonable short-term price will be US$70,000. There will be a chance to reach a higher price in the second half of the year, and the market outlook is still worth looking forward to.
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