The cryptocurrency market has recently witnessed some exciting developments, making it one of the most thrilling markets to watch. However, despite the approval of spot Ethereum ETFs to be listed on US exchanges, both Bitcoin (BTC) and Ethereum (ETH) experienced a decline in the last 24 hours. This decline triggered a classic market behavior known as “buy the rumor, sell the news,” resulting in a 4% drop in ETH price.
The approval of spot Ethereum ETFs was seen as a significant milestone for the cryptocurrency market, especially for ETH, which is the second-largest cryptocurrency by market value. However, contrary to expectations, the ETF approval did not lead to a price increase. Instead, it indicated a short-term downward trend. According to Alex Kuptsikevich, a senior market analyst at FxPro, the sales can be attributed to the speculative nature of the market. Kuptsikevich believes that the Ethereum price may drop to around $3000, presenting an opportunity for large institutional investors to enter the market through ETFs. This situation mirrors a similar pattern seen after the approval of a Bitcoin ETF in January.
Although the necessary regulatory filings for ether ETFs have been approved by the SEC, they are not yet approved for trading. The approval process involves additional review of S-1 filings before investors can purchase the funds. However, once these filings are approved, there is a possibility of listing on major exchanges. ETF trading has the potential to bring in significant institutional capital to the cryptocurrency market. Standard Chartered predicts that there could be an inflow of up to $45 billion in the first year of trading, which could support Bitcoin and Ethereum prices and create a long-term upward trend.
Despite the short-term price correction, some investors remain optimistic about Ethereum’s future performance. There is an expectation of a rally exceeding 60% in the coming months, supported by increasing demand for futures and spot purchases observed in recent weeks. This upward trend reflects confidence in the potential growth of Ethereum and the overall cryptocurrency market, despite the current market dynamics.
Please note that the information provided in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and risks and should conduct their own research.
