Markets
Ethereum ETFs Will Play a Crucial Role in Cryptocurrency Market Growth
As the market awaits the U.S. Securities and Exchange Commission’s (SEC) final decision on an Ethereum exchange-traded fund (ETF), experts believe that such products will attract new investment and attention to the sector.
On July 12, Kraken’s chief strategy officer Thomas Perfumo told Bloomberg that Ethereum ETFs will lift the market.
ETF approval could push Ethereum to new highs
Perfumo identified Ethereum ETFs as a key catalyst for the crypto industry in the second half of this year. Other drivers include the upcoming US elections, potential interest rate cuts, and the global adoption of Bitcoin ETPs.
Perfumo said the approval of Ethereum ETF products would be a significant moment for the industry. He noted that ETFs would bring in capital and renewed interest, benefiting the entire market.
He predicted that Ethereum ETFs could see monthly inflows ranging from $750 million to $1 billion. If these inflows exceed expectations, they could push the price of ETH to a new all-time high between $4,000 and $5,000.
“I believe the market is pricing in somewhere in the neighborhood of $750 million to $1 billion in net inflows into Ethereum ETF products every month, and so if we try to match that, it will create positive support for the industry,” Perfumo said.
Read more: Ethereum ETF explained: what it is and how it works
Reflecting on Bitcoin’s previous all-time high, Perfumo noted that the market lacked extremes volatility and an influx of new users. He said this showed that peak momentum had not been reached and that there was room for growth.
“When I look at the previous all-time high in March for Bitcoin, that’s what I’m calling a quiet peak. We didn’t see similar levels of extreme volatility or similar levels of unprecedented volatility of sign-ups on our platform to suggest that you actually had a momentum spike of people, tens of millions, hundreds of millions of people coming into the industry for the first time,” he said. added.
Meanwhile, Perfumo emphasized that the upcoming US elections will shape the future of crypto for the next four years. Indeed, cryptocurrency has emerged as an important political issue in the current election cycle. The two main candidates —former President Donald Trump and President Joe Biden— have taken different approaches to the sector, provoking strong reactions from the community.
Read more: How to invest in Ethereum ETFs?
However, Perfumo emphasized that the legislative branch plays a crucial role in the U.S. cryptocurrency industry because it develops regulatory clarity, which aids growth. He noted that U.S. lawmakers have shown support for cryptocurrency with their bipartisan support for important regulations such as Financial Innovation and Technology Act for the 21st Century (FIT21) It is efforts to quash the controversial SEC Accounting Bulletin 121 (SAB 121).
“When it comes to the US specifically, it’s really about legislative action and developing clarity for this industry… the Republican side of things seems to be more pro-crypto, more progressive in that sense,” he noted.
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