Since the probability of Ethereum spot ETF approval has increased significantly , and it officially received preliminary approval from the U.S. Securities and Exchange Commission (SEC) on May 24, the price of Ethereum has climbed strongly and hit $3,980 on the 27th of this week, a record of nearly 2 month high.
Although the listing of the Ethereum spot ETF still needs to wait for the SEC to approve the S-1 document (registration statement), it still does not hinder the recent performance of Ethereum that is stronger than Bitcoin. (ETH has surged about 30% since May 15, while BTC has only gained 9%)
Three reasons why ETH is expected to continue to be stronger than BTC
In this context, cryptocurrency analyst Nancy Lubale further analyzed and explained three major reasons why ETH will continue to outperform BTC:
Growth in online activity
With the initial approval of the Ethereum spot ETF, the regulatory risk of ETH being classified as a security has been avoided, which makes investors pay more attention to their participation in the Ethereum ecosystem. According to data from DappRadar, the transaction volume of Ethereum’s DApps in the past week reached $58.81 billion, an increase of 7.5%; data from CryptoQuant shows that the number of smart contracts on Ethereum has also increased from 37,870 on May 20 to May 31 38,066 on the day; Ethereum meme coin $PEPE has also repeatedly broken new highs.
These data point to continued growth in Ethereum network activity, which helps promote the burning of ETH, reducing supply and helping to drive prices higher.
Extended reading: Ethereum ETF passes the test》Securitize: Tokenized assets are safe, and more financial institutions will enter RWA
Ethereum spot ETF expected to be launched soon
The possibility of an Ethereum spot ETF launching soon also adds to the bullish momentum for ETH. Yesterday, Bloomberg ETF analyst Eric Balchunas estimated that the Ethereum spot ETF will be launched on July 4, but after BlackRock submitted a revised S-1 document, he believes that it is also very likely to be officially launched by the end of June. .
Discus Fish, founder of Cobo, a digital asset custody solution provider, also predicted on the 24th that the S-1 document for the Ethereum spot ETF may be approved in mid-June:
Early June: The S1 file may be approved. Referring to the BTC ETF time, it will take at least two weeks, but the normal pace may take 3 months.
Mid-June: Trading may begin immediately after S1 passes, or within days
Some institutions believe that the listing time will be later. Galaxy Digital predicts it will be in July or August , and JP Morgan predicts it in November . However, Zaheer Ebtikar, co-founder of the cryptocurrency hedge fund Split Capital, believes that if the SEC delays the listing time of the Ethereum spot ETF point, it is conducive to the rise of ETH, because it will give market participants time to grab ETH before potential fund inflows from the ETF.
But no matter what, after taking into account the opinions of all parties, it should be an established fact that the Ethereum spot ETF will be launched in the second half of the year.
Extended reading: Positive Signal》SEC requires issuers to submit revised S-1 documents before Friday. Is the Ethereum spot ETF expected to be listed in June?
Technical indicators are bullish
The ETH/BTC ratio began to rise on May 17 and reached a two-month high of 0.05744 on May 27, an increase of more than 28%, and is now at 0.05584. From a technical perspective, Nancy Lubale said that the weekly chart of ETH/BTC shows a bullish divergence from the relative strength index, which indicates that "a trend reversal has begun."
This is a sentiment shared by trader and founder of MN Trading, Michaël van de Poppe. He said that as long as the ratio remains above 0.051, ETH is considered bullish. On the 16th of last month, he even stated that he had converted all Bitcoin positions into other currencies.
ETH looking to hit $10,000 by year-end
With the approval of the Ethereum spot ETF seemingly imminent, market participants generally believe that this will encourage the price of ETH to reach new highs. Standard Chartered Bank has previously predicted that the price of Ethereum may reach $8,000 by the end of this year after the listing, and Nexo Chief Broker Andrey Stoychev was more optimistic:
The U.S. ETH ETF and similar products in Asia could be a key factor in pushing ETH to $10,000 by the end of 2024, thus catching up with Bitcoin's performance after the ETF launch.
