This week, a couple of news items have been released that allow for positive predictions on the price of Ethereum and the upcoming ETFs: the first is the imminent stock market debut of the ETFs, and the second is the SEC’s decision to no longer consider it a security.
The institutional question
Of the two pieces of news, the most important is the second, because as far as ETFs are concerned, it is expected that they will arrive sooner or later, after the approval in May.
It is such an important issue for Ethereum that it directly involves institutional investors as well.
In fact, there are several investors who cannot expose themselves to assets that could be recognized as unregistered securities, and therefore withdrawn from the markets.
With the SEC’s withdrawal from proceeding with its investigation on Ethereum, and with the approval of spot ETH ETFs, there are no longer any doubts that ETH should also be considered a commodity.
Therefore, as stated by the CEO of Bitget, Gracy Chen, this shift could open the door to institutional investments in Ethereum and other altcoins.
Already the transition to Proof of Stake (PoS) had made it a more attractive asset for institutions seeking returns, similar to how they do with bonds, but now this institutional interest could also extend to other altcoins, improving their liquidity and market capitalization.
Therefore, the conclusion of the SEC investigation on Ethereum 2.0 could also have a significant impact on the altcoin market.
The positive forecasts on Ethereum and ETFs after the SEC’s renunciation
Furthermore, the conclusion of the investigation without a negative verdict for Ethereum provides a greater degree of regulatory clarity in the USA, even though the country still does not have a clear and specific legal framework for the crypto sector.
This could further increase investor confidence in Ethereum and other altcoins, as Ethereum’s status often sets a precedent for other criptovalute.
According to the CEO of Bitget, moreover, such a scenario should also provide greater stability to the crypto market. Since Ethereum is not classified as a security, the immediate risk of a regulatory crackdown has been greatly reduced, and this stability could also benefit the broader altcoin market, encouraging investments and the development of various projects.
Chen also adds another positive consequence for the crypto ecosystem.
In fact, the altcoins closely linked to the Ethereum ecosystem, such as those involved in decentralized finance (DeFi) and second-layer solutions, could register increased activity and interest. The stability and continuous development of Ethereum provide a solid foundation for the prosperity of these projects.
By now, it is clear that layer-2 are the future of Ethereum, and that they are already starting to play a very important role in the present as well.
The landing of the ETF
According to some hypotheses, the new spot ETH ETFs in the USA should land on the stock exchange on July 2, that is, in about two weeks.
Although it is now a widely anticipated event, and practically a given, the date is still uncertain.
It is worth noting that when shortly after mid-May it became known that the SEC, in a completely unexpected way, seemed to be inclined to approve them, the price of Ethereum did register a jump, but it was decidedly contained.
In a few hours, it went from $3,100 to $3,500, then climbed to almost $3,900 in the following two days.
These figures, however, did not seem great, especially because they are far from the annual highs of 2024, namely the almost $4,100 recorded in March.
In fact, over the following weeks, the price of ETH fell to below $3,400, which is a figure higher than that of mid-May but not by much.
However, a couple of days ago there was a small rebound that brought the price above $3,600, but even this does not seem to be a sufficient figure to be able to affirm that the markets have already begun to test the actual landing of ETFs on the stock exchange.
SEC: The effect of ETFs on Ethereum price forecasts
The most plausible explanations should be two.
Or the markets have not yet really started to price the actual landing on the stock exchange of spot ETH ETFs in the USA.
Or they fear that they will not turn out to be a success like those on Bitcoin.
On the other hand, for example, on the Hong Kong stock exchange at the end of April, both the ETFs on BTC spot and those on ETH spot were launched simultaneously, with the latter performing much less well. However, these are figures that are too small to be representative.
Furthermore, now that the SEC has raised the white flag, new opportunities are opening up for ETH, especially regarding institutional investments.
And so the first hypothesis returns to the post, namely that the markets have not yet fully priced in the actual stock market debut of the ETFs.
It should still be remembered that after the listing, the price of ETH could also correct a bit, because the Grayscale Ethereum Trust might start liquidating ETH just as the Grayscale Bitcoin Trust liquidated enormous quantities of BTC after being listed on the stock exchange at the beginning of January.