As a researcher with a background in financial markets and cryptocurrencies, I find the recent price pullback in Bitcoin and Ethereum following the SEC’s approval of Ethereum ETFs to be an interesting development. While the initial market reaction was one of excitement and bullishness, it seems that larger institutional investors are taking a more measured approach.
The crypto market’s celebration of Ethereum ETF approval by the SEC may have been prematurely halted. Although the US Securities and Exchange Commission gave its green light to several Ethereum-backed exchange-traded funds on May 23, 2024, both Bitcoin and Ether prices have taken a dip in the last day.
Photo: CoinMarketCap
As a crypto investor, I’ve noticed that the recent price dip in the market seems like a classic example of “buy the rumor, sell the fact” behavior. In the week leading up to the SEC’s decision on Ethereum ETFs approval, Ethereum had surged by an impressive 20%. However, following the approval announcement, Ethereum dropped by 5.87%, while Bitcoin experienced a decline of 3.53%. The total market capitalization also took a hit, decreasing by 1.19% to reach $2.44 trillion.
Ethereum Price Pullback after ETF Approval
As a crypto investor, I wouldn’t be taken aback by this pullback. It’s not unexpected for the price to retrace back to around $3000, which is an essential consolidation area. From here, large institutional investors might start accumulating positions in Bitcoin ETFs.
According to Kuptsikevich, Bitcoin’s price behavior in January 2024 bore a striking resemblance to what transpired after the first Bitcoin ETF was given the green light. Initially, Bitcoin’s value took a hit, dropping by nearly 19%, but then bounced back strongly.
The SEC’s approval of the 19B-4 forms marks progress towards Ether ETFs, but keep in mind that these funds have not been given the go-ahead for trading just yet. The SEC still requires approval of each fund’s individual S-1 filings before shares can be bought by investors.
As an analyst, I’ve been closely monitoring the approval process for Exchange-Traded Funds (ETFs) and I’m pleased to report that progress is being made. Major financial institutions such as BlackRock, VanEck, Fidelity, Franklin Templeton, Bitwise, ARK Invest, 21Shares, Invesco Galaxy, and Grayscale have had their proposals approved by the Securities and Exchange Commission (SEC). These ETFs are set to list on prominent exchanges like Nasdaq, NYSE Arca, and Cboe BZX.
Long-Term Optimism Persists
As a researcher studying the crypto market, I’ve observed that despite the recent price decrease, there remains optimism among experts regarding Ether’s future and the overall market. For instance, Standard Chartered projects that Ether Exchange-Traded Funds (ETFs) could potentially bring in around $45 billion during their inaugural year. Furthermore, based on my analysis, QCP Capital anticipates a price surge of over 60% for Ether, fueled by increasing institutional investor interest in futures contracts and direct purchases.
As a researcher studying the cryptocurrency market, I’ve observed that Ethereum’s recent price drop following the approval of the Ether ETF is indicative of the volatile nature of this emerging asset class. However, it’s crucial to view this as merely a transient phase in Ethereum’s growth trajectory. The landmark ETF approvals pave the way for increased institutional investment, marking an important milestone in the maturation of the crypto market.
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2024-05-24 17:09