Ethereum drops below $3,000 again, spot ETH ETF sparks debate in crypto community
- Evan Van Ness says that Ethereum spot ETFs may see approval despite lingering security status investigation.
- X user shares unique opinion that SEC may neither approve nor deny spot ETH ETFs.
- Ethereum investors still show uncertainty as they await fresh market outlook after ETH ETF decision.
Ethereum again went below the $3,000 key level on Thursday after posting signs of a rally. The recent price action follows several predictions from the crypto community regarding the Securities & Exchange Commission's (SEC) decision on spot ETH ETFs next week.
Daily digest market movers: Crypto community shares predictions on spot Ethereum ETFs
Ethereum community members are sharing their predictions with only a week left until the deadline day for the SEC to decide on spot ETH ETFs. Their comments reveal key details about why the agency might or might not approve the ETFs.
Former chief decentralization officer at the Ethereum Foundation Evan Van Ness said the market is underestimating the chance that SEC boss Gary Gensler approves spot ETH ETF "while still trying to claim that ETH is a security." The comment follows several predictions that the SEC's recent crackdown on Ethereum-related firms is aimed at classifying the largest altcoin as a security and, in turn, denying spot ETH ETF applications.
Also read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Altcoins rescued as BTC acts on CPI data
However, Larry Fink, the CEO of asset manager BlackRock, has earlier stated in an interview on CNBC that the SEC could still approve spot ETH ETFs even if it classifies Ethereum as a security. This aligns with recent revelations that the SEC has considered ETH a potential security since April 2023 and yet approved ETH futures ETFs in September.
Eric Conner, co-author of Ethereum Improvement Proposal EIP-1559, expressed confidence that the SEC would approve spot ETH ETFs on May 23.
Another X user, @fewture, gave a unique view suggesting the agency may not approve or deny spot ETH ETF applications.
My new theory is the SEC doesn't approve or deny it. They offer nothing in writing. Means it's de facto approved, but then I foresee SEC contesting that process judicially, without speaking to ETH analysis itself.
— fewture (@fewture) May 15, 2024
They will seek an injunction so listing cannot happen.
Bankless podcast host Ryan Sean Adams also shared his take in an X post:
I see no signs the SEC will approve the Ethereum ETF next week save one
— RYAN SΞAN ADAMS - rsa.eth (@RyanSAdams) May 15, 2024
IF (and this is a BIG IF)...IF Biden and D's wake up at the 11th hour & realize anti-crypto Gensler is about to lose them the white house they may pressure him to approve.
A long shot but anything can…
Many expect the SEC to easily deny the spot ETH applications from Van Eck, ARK 21Shares and Hashdex this month but expect the regulator to face challenges when it is dealing with those of Grayscale, Fidelity, BlackRock and Invesco.
ETH technical analysis: Ethereum traders still uncertain
Ethereum is declining again after briefly breaking past the $3,000 mark on Wednesday. The largest altcoin has been witnessing slow growth compared to Bitcoin and Solana, which have risen rapidly in this cycle.
For example, the ETH/BTC ratio has been on a steady decline since the beginning of the year. However, many have predicted that it's reaching a bottom and may bounce back up soon. Any light rally could cause capital to flow back into Ethereum, which, in turn, will boost its price.
Read more: Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial
However, the ETH/USDT pair still reveals market uncertainty, especially as open interest hovers around 0.5%. ETH liquidations sit at $23.79 million, with $18.29 million coming from liquidated long positions.
ETH/USDT 4-hour chart
ETH failed to overcome the $3,103 resistance of April 26 and is expected to hold the $2,852 key support level in hopes of a potential bounce back. However, continued uncertainty won't see it making any sustained bullish move in the next few days.
As stated in a previous analysis, investors are awaiting a fresh outlook after the SEC's initial decision on VanEck’s spot ETH ETF on May 23 before opening positions.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addition to
