Investors are waiting for the SEC to approve Ethereum ETFs.
The approval of these ETFs could lead to a surge in Ethereum's price
The SEC is delaying decisions on Ethereum ETFs and may be concerned about investor protection and market manipulation.
One possible reason for the delays is that asset managers may not be ready to meet the SEC's approval criteria.
The approval of Bitcoin ETFs is a positive sign for Ethereum ETFs. However, the SEC is taking a cautious approach.
Ethereum's price is showing moderately strong buy signals. A break above the $3,671 resistance could confirm a bullish trend.
The crypto market is up and running, with several massive events coming in, one after the other. We had the Ethereum Dencun upgrade a few weeks ago, the upcoming Bitcoin halving in a few weeks, and the deadline for the Ethereum spot ETF approvals in May. The focus of this article, however, is the Ethereum ETFs
Investors and enthusiasts continue to watch the U.S. Securities and Exchange Commission's every move, as it decides on whether to approve or reject Ethereum as a commodity and further as an ETF.
But we keep getting delays—what could be wrong, and what could be stopping these much-awaited investment vehicles?
At the time of writing, the SEC has postponed its decision on several Ethereum ETF proposals, from Blackrock, Fidelity and a host of others as the late May deadline closes in.
Keep in mind that the Bitcoin ETFs were a massive success. These ETFs have raked in billions of dollars in inflows since launch, with some like Grayscale, iShares and Fidelity’s ETFs holding $22 billion, %6.6 billion and 4.7 billion in AUM respectively, according to data from VisualCapitalist.
These numbers have done wonders for the price of Bitcoin and may be directly connected to Bitcoin making its first ever pre-halving ATH of $73,000 only a few weeks ago.
Investors expect something similar to happen with Ethereum, hence the push for similar spot Ethereum ETFs. However, to understand the delays, we first have to look at things through the SEC’s lenses.
The regulatory body may be seeking more time to consider investor protection, and the delays may have much to do with figuring out how to prevent issues like market manipulation and fraud.
Another factor that might be holding these ETF approvals back might be issues with the asset managers who wish to offer these ETFs.
One of these issues might be the readiness of these managers to meet the SEC’s approval criteria.
The process of developing a company's internal structure to align with regulatory expectations is no easy task, and might even cause further postponements beyond the final 23 May deadline
Possible postponements of Ethereum ETFs
However, we can also say that the recent approvals of spot Bitcoin ETFs have set the ball rolling, for an Ethereum ETF that the SEC cannot ignore
However, considering how the US watchdog requested public comments on its Ether ETF decisions after rejecting BlackRock's iShares Ethereum Trust in early March, we can conclude that the regulator is taking a “slow and steady” approach towards a possible approval.
Things are bound to get pretty good for ETH if we get an Ethereum ETF approval, considering factors like Ethereum’s price.
For one, the Ethereum ETF are bound to offer investors a regulated and less risky way to buy Ethereum, without owning it directly as we have seen with the spot Bitcoin ETFs.
This might lead to larger inflows into Ethereum, driving the price of the cryptocurrency straight up as more investors jump in via these investment products. Furthermore, we could also see the credibility of the crypto market skyrocket, causing further regulatory acceptance for crypto.
Moreover, the Ethereum ETFs will make Ethereum stronger as a hedge against inflation, as a diversification tool, and as a way for investors to spread their risk across different assets.
Overall, as the SEC continues to weigh the pros and cons, the crypto community remains hopeful.
We might see further delays by the May deadline, but we are bound to see an Ethereum ETF happen sooner rather than later.
Harsh Vardhan, Editor-in-Chief at Invezz, says that
Recent SEC investigations into Ethereum Foundation dealings raise regulatory concerns, especially regarding ETH's security classification. Ongoing scrutiny of proof-of-stake blockchains and lawsuits against exchanges offering staking services add further regulatory complexity.
The appeal of staking and potential security implications pose significant hurdles, potentially diminishing the appeal of an ETH ETF.
The success of Bitcoin ETFs also fuels policymakers' concerns about energy consumption and taxation, creating uncertainty around further crypto ETF approvals.
Despite investor disappointment, navigating these regulatory challenges is crucial for ensuring the legitimacy and long-term viability of crypto ETFs, requiring resolution of security classification and staking service concerns to foster broader ETH investment product adoption.
According to Ethereum’s quick analysis pane on TradingView, we are seeing the average signal on all indicators showing a moderately strong buy signal. Most of the oscillators are trending towards neutrality, while the majority of the moving averages show a strong buy signal as shown above.
According to the charts, we are looking at Ethereum trading nicely within the daily chart's standard Bollinger bands.
At the moment, we have just seen Ethereum break above the $3,500 resistance with a current price of $3,647.
Ethereum's Bollinger bands
However, we still need to break above the middle Bollinger band (the 20-day SMA) to confirm Ethereum's bullishness and possible rally to the upper band around $4,169.
Overall, investors should focus more on the $3,671 resistance, and wait for a break above, to confirm that Ethereum is indeed poised to retake the $4,000 zone.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.