Speculation of Spot ETH ETF Approval This Summer – Ethereum Dominance?

Why Trust Tech Report

Tech Report is one of the oldest hardware, news, and tech review sites on the internet. We write helpful technology guides, unbiased product reviews, and report on the latest tech and crypto news. We maintain editorial independence and consider content quality and factual accuracy to be non-negotiable.

Following the Securities and Exchange Commission’s (SEC) approval of Form 19b-4 for ETH ETFs in May, the SEC’s Chairman, Gary Gensler, recently announced ETH ETFs could be fully approved by the end of this summer. 

If ETH ETFs are approved by September, this could fuel the rise of the world’s second-largest cryptocurrency (by market cap) among other decentralized currencies. 

ETH ETF Approval Effects

Soon after the SEC approved the first round of applications (Form 19b-4) for spot ETH ETFs, $ETH spiked by 8.33%, from roughly $3.6K to $3.9K. Its price has since dwindled to around $3.5K, per CoinMarketCap. 

The ETH ETF application followed the approval of Bitcoin ETFs on January 10, which saw Bitcoin reach greater heights – despite already being the world’s number one cryptocurrency. 

As a result of the ETF approval, Bitcoin – valued at $46K beforehand – hit its ATH of over $75K on March 21. $BTC’s current price is $66.9K, spotlighting a 45.43% rise since the SEC’s authorization. 

Analysts anticipate a similar surge in $ETH’s price if its ETFs are approved. Here’s why: 

According to Market Insider, the trading firm QCP Capital estimates the price of $ETH to rise by 60% following the anticipated ETF approval. This would bring ETH’s value to $5.6K at the time of writing. 

Is ETH a Commodity? 

Still, the question of whether Ethereum is a security or commodity needs to be answered and raises concerns. 

The Commodity Futures Trading Commission (CFTF) perceives ETH as a commodity. Meanwhile, Gensler remains tight-lipped about its classification.

Cryptocurrency classification affects how it is perceived, regulated, and traded. Interestingly,  the SEC’s former Chair, Jay Clayton, said Bitcoin is not a security in June 2018.

The Financial Innovation and Technology for the 21st Century Act could address this issue, but it’s awaiting Senate approval. There would be more regulatory clarity if it were to be classified as a commodity.

Crypto regulation is crucial because it helps reduce uncertainty and enhance investor confidence in the market. 

Potential ETFs Beyond ETH and BTC

Alongside the possible approval of ETH ETFs, there is widespread speculation about whether other cryptocurrencies will follow suit. 

In a recent YouTube video, Chainlink’s Sergey Nazarov discusses how more ETFs – beyond Bitcoin and Ethereum – may be approved in the future.

According to Standard Chartered’s Head of Crypto Research and Emerging Market Foreign Currencies, Geoffrey Kendrick, Solana ($SOL) and Ripple ($XRP) are the next contenders for ETF approval. 

 The Future of Crypto Adoption

The SEC’s approval of Ethereum ETFs would mark a pivotal moment in the blockchain realm, as it would increase credibility and mitigate legal uncertainty. 

Considering Ethereum already leads in hosting top smart contract protocols and developer activity, the potential capital inflow from the ETFs could further enhance its position in the Web3 space. 

Still, are ETH ETFs the best path for the industry, or would a more balanced multi-chain ecosystem be better for wide-scale adoption? Only time will tell. 

As always, it’s important to DYOR when making any crypto investment. The blockchain space is volatile and speculative.