The launch of a spot Ethereum ETF in the coming weeks looks quite likely, although the exact timing has not yet been determined. The SEC has postponed the start of trading, which was widely anticipated by July 4. Discussions between ETFs and the regulator are in the final stage. Despite the return of Forms S-1 with comments, SEC approval is expected to come no later than September 2024.
This event is of great importance to the crypto market. It would provide access to Ethereum for institutional investors, which could lead to significant capital inflows and increase the cryptocurrency's legitimacy in traditional financial circles.
The impact on cryptocurrency prices is likely to be quite strong. Given that since the end of May, Ethereum has fallen by 17% to $3,310, then rally 60% within 35 days after SEC approval. In the short term, the ETH price may fall due to the Grayscale sell-off. In the medium term, Ethereum is expected to move higher alongside bitcoin. The stock market is expected to see an inflow of between $2 and $4 bln into the ETH ETF during the first months after its launch.
This event may also act as a driver for the prices of other altcoins. That said, investors should be mindful of the heightened volatility inherent in the crypto market. Actual impact may differ from projections and market participants are advised to tread cautiously. Much will depend on the dynamics of the dollar and the S&P 500, as well as Fed speak. Cryptocurrency is a risk-sensitive asset and is therefore subject to flash crashes.