The U.S. Securities and Exchange Commission (SEC) has finally approved the Ethereum spot exchange-traded fund (ETF), the second-largest virtual asset by market capitalization. The market expects Ethereum, like the Bitcoin spot ETF, to hit record highs thanks to positive news from approval. However, there is pessimism that there will not be an explosive rise because it is smaller than Bitcoin.
According to major foreign media outlets such as CNBC on the 22nd, the SEC approved the '19b-4 (ETF Trading Rule Change Report)' form applied by eight asset management companies, including Blackrock and Bitwise, on May 23, and is the final step. ‘S-1 (Securities Report)’ was finally approved.
Ethereum spot ETF products are scheduled to be traded on the Chicago Board Options Exchange (CBOE), New York Stock Exchange (3), and Nasdaq Exchange (1). The SEC said that trading in at least two of the approved products could begin on the 23rd (local time). The SEC's approval of the Ethereum spot ETF is the first, and only six months since the Bitcoin spot ETF was approved on January 10th.
The market expects the price of Ethereum to rise once Ethereum spot ETF trading begins. This is because Bitcoin soared 60% and hit a record high in about two months after the spot ETF was approved in January. Ethereum's all-time high is $4,800 recorded in November 2021.
Among the eight approved asset management companies, Bitwise's Chief Investment Officer (CIO) Matt Hogan said, “If you want to increase your asset allocation to blockchain, we recommend adding Bitcoin and Ethereum to your portfolio,” and added, “Ethereum spot ETF launched. “We will attract $15 billion (about KRW 20 trillion) over the next year and a half,” he predicted.
Steno Research, a virtual asset research company, predicted that $20 billion (approximately 27 trillion won) of funds will flow into the Ethereum spot ETF this year alone. This is similar to the amount of funds inflow into the Bitcoin spot ETF in just 6 months.
However, pessimism is also raised that the funds flowing into the Ethereum ETF will be less than those of the Bitcoin ETF. This is because the market size of Ethereum is smaller than Bitcoin. Ethereum's market cap is about one-third of Bitcoin.
Michael Anderson, co-founder of Framework Ventures, a virtual asset venture capital firm, said, “The positive news about the approval of the Ethereum spot ETF has already been reflected in the price,” and added, “The Ethereum spot ETF will have much less fund inflow than the Bitcoin spot ETF.” I expected it.
Meanwhile, the market's reaction remains muted despite the news of the SEC's approval of the Ethereum spot ETF. As of 11 a.m. on this day, Ethereum is trading at $3,477 on CoinMarketCap, a virtual asset market relay site, down 1.49% from the previous day. Domestic virtual asset exchanges Upbit and Bithumb are also trading at 4.86 million won, down 1.4% from the previous day.
