Markets
‘Interest in ETH will grow over time’
Trading is scheduled to begin on July 23 for the new SEC– Approved spot Ethereum (ETH) ETFs
The approval process required issuers to finalize their S-1 filings by Wednesday, July 17, allowing the ETFs to debut on July 23. These new financial products are expected to attract substantial investment, with projections estimating inflows of up to $5 billion in the first six months and potentially up to $20 billion in the first year.
According to a recent report by Bybit, market trends and trading signals in spot, futures, options and perpetual contracts trading volume show growth bullish sentiment towards ETH compared to Bitcoin (BTC). This sentiment is reflected in ETH’s sustained volatility premium over Bitcoin, even amid recent market activity and sell-off.
Update: Nate’s instincts were right, hearing that the SEC finally got back to issuers today, asking them to return FINAL S-1s on Wednesday (including fees) and then file for effective Monday after the close for a TUESDAY 7/23 LAUNCH. That’s provided no last-minute unforeseen issues, of course! https://t.co/D21FD9Qf94
— Eric Balchunas (@EricBalchunas) July 15, 2024
The report revealed a significant shift in investor sentiment between Ethereum and Bitcoin.
“I expect interest in ETH to grow over time as more investors now have access to it,” Eugene Cheung, head of institutions at Bybit, told crypto.news in an interview.
Cheung highlighted the bullish long-term outlook for spot ETFs.
“In the short term, the market is pricing in a lower-than-expected response, but this is a bullish catalyst in the long term. ETH could also offer diversification benefits in the long term given its different and more extensive set of use cases relative to BTC,” Cheung said.
Eight major emitters, including the major asset management companiesare preparing to launch Ethereum-based ETFs. The preliminary approval of these products by the SEC marks a significant step forward for the cryptocurrency industry following the successful launch of spot Bitcoin ETFs earlier this year.
Ethereum’s price responded positively to the news, rising by over 12% in the past five days. The influx of investment from these ETFs is expected to influence Ethereum’s market dynamics.
Market implications and trader sentiment
Market analysts suggest that the introduction of spot Ethereum ETFs will drive immediate investment and support long-term growth due to increasing regulatory clarity and technological advancements within the Ethereum ecosystem.
“We have seen BTC ETFs used as a basis trade where traders have been buying the ETF and selling futures to capture funding rates,” Cheung said. “I imagine this trade could open up to ETH ETFs as well in the future.”
An ETH ETF is a win for cryptocurrencies as it integrates digital assets into traditional financial markets and sets a precedent for future innovations.