The Ethereum ETF hype has driven the cryptocurrency's price up, but it might not be fully priced in yet.
Ethereum's price has fluctuated after the surge, declining to $3,727 after reaching a high of $3,970,
Some analysts believe Ethereum's price could reach $4,500 before the ETFs start trading, based on historical patterns with Bitcoin ETFs.
The amount of money invested in these incoming ETFs will influence Ethereum's price, with experts predicting $1-2 billion inflows
Wall Street's interest in Ethereum is growing, with BlackRock recently exploring Ethereum's potential for asset tokenization
Even now, at the time of writing, the hype from the recent Ethereum ETf approvals still hasn’t died down.
Ethereum is currently showing signs of price weakness, after having declined by around 7% from its $3,970 pre-ETF hype.
Analysts are now debating the potential impact of this development on Ethereum, its price and the prices of most of the other cryptocurrencies across the market.
Is the Ethereum ETF hype priced in already, or is Ethereum just warming up for the real launch rally?
Ever since last week when these 8 ETFs were approved, Ethereum has fluctuated between $3,700 and $3,800.
The cryptocurrency surged to as high as $3,970 before the approval but has since declined to where it now sits at around $3,727—which is still very bullish, with a 23% price increase over the last month.
Ethereum’s price standing
However, while this $3,970 high was plenty, amounting to a weekly rise of around 30% at the time, it was still slightly lower than analysts expected, considering the many calls for a break and close above $4,000.
As for whether Ethereum has played all its cards with this initial 30% price increase, experts remain divided.
For example, Arthur Cheong from DeFiance Capital in a recent interview, argues that the reason for the current price action on Ethereum and the rest of the market is that the market hasn't fully adjusted to this massive development.
This is considering a 26 May tweet from the DeFiance Capital executive, about a $4,500 Ethereum price before the ETFs go live for trading.
Ethereum to $4,500
Cheong maintained that such a major change in Ethereum's market dynamics can't be priced in so easily, considering how the Ethereum ETF approvals are less than two weeks old at the time of writing.
Historical data agrees with Cheong, of course, because when we compare the Ethereum ETF approvals with the Bitcoin ETF launch in January 2024, a pattern emerges.
Bitcoin rallied before the ETF launch, declined slightly on the news and then entered a parabolic rally to its new all-time high by March.
This time around, something similar seems to be happening with Bitcoin. And despite Ethereum’s current fall from its $4,000 attempt, market experts seem to agree that the ETF approvals might not yet be priced in.
Furthermore, the amount of inflows into these Ethereum ETFs still has a part to play in the overall outlook of the cryptocurrency.
So far, we have seen the ETF market significantly affect Bitcoin, with the cryptocurrency's price reacting accordingly when ETF inflows are strong.
According to recent insights from Bloomberg ETF analyst James Seyffart, the Ethereum ETFs might capture around 20% of the flows seen by spot Bitcoin ETFs.
Eric Balchunas on the other hand, puts this estimate at a more conservative 10% to 15% range, with both of these outlooks expecting an average of $1 billion - $2 billion worth of inflows into these Ethereum ETFs.
20% of the Bitcoin ETF inflows
This is considering how the Bitcoin ETFs have seen average AUMs of $10 billion - $13 billion since launch, according to data from Farside.
Moreover, there have also been reports of Wall Street’s giants exploring Ethereum’s use cases.
In fact, BlackRock, one of the major ETF users recently leveraged Ethereum to tokenize its BlackRock USD Institutional Digital Liquidity Fund in March—which has also garnered around $470 million in assets since launch.
In all, BlackRock’s CEO, Larry Fink, has always shown confidence in blockchain technology, even stating that eventually, every stock and bond will be tokenized on a blockchain—which would be massive for Ethereum, considering its unchallenged dominance in the defi space.
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