Ethereum ETFs may launch on July 4, could see 40% rally afterwards

Ethereum (ETH) is down 1% on Wednesday following reports that the Securities & Exchange Commission (SEC) could approve spot ETH ETFs on July 4. Meanwhile, brokerage and financial services firm, StoneX, predicted ETH to see a 40% gain in two months after ETH ETFs go live.

Daily Digest Market Movers: July 4 launch, 40% ETH price growth

According to a recent Reuters report on Wednesday, the SEC could approve spot ETH ETFs by July 4, citing sources from industry insiders.

The report stated that the SEC could give the greenlight on July 4 "as talks between asset managers and regulators enter the final stages, industry executives and other participants told Reuters." The July 4 prediction aligns with earlier speculations from Bloomberg analyst Eric Balchunas, who speculated that ETH ETFs might launch around July 2.

Prospective spot ETH ETF issuers filed their amended S-1 registration statements with the SEC last week following comments from the agency. The SEC approved issuers' 19b-4 applications on May 23 but also needs to greenlight their S-1s before ETH can begin trading.

A recent analysis by StoneX predicts that the launch of spot Ethereum ETFs could trigger a 40% growth in ETH's price two months after they go live. In a wider time frame, StoneX's model predicts that ETH's price will be between $2,142 and $12,621 over the next two years.

The company mentioned that its "conservative" predictions are due to the belief that NFTs won't see more mainstream attention as they did in 2021. The analysis also suggested that video games and real-world assets (RWA) — which many believe will boost TVL and user adoption — may not see tangible growth.

The StoneX analysis follows Bloomberg analyst Eric Balchunas's suggestion that ETH ETFs will capture lower net flows than Bitwise CIO Matt Hougan predicted because "ETH futures ETF were a borderline flop."

Hougan predicted that spot Ethereum ETFs will attract up to $15 billion in net flows by the end of 2025. He arrived at the $15 billion figure by analyzing Ethereum's relative market cap compared to Bitcoin, international crypto ETFs volume, Grayscale Ethereum Trust conversion, and the Bitcoin "carry trade."

Meanwhile, SEC Chair Gary Gensler commented in a Bloomberg event on Tuesday that the process of launching spot Ethereum ETFs is "going smoothly." He stated that the products going live depend on asset managers making full disclosures in their registration statements.

ETH technical analysis: Could Ethereum shed 4% of its value 

Ethereum is trading around $3,350 on Wednesday, down nearly 1.2% in the past 24 hours. ETH's total liquidations in the past 24 hours have reached $21.82 million, with long positions accounting for 61% of liquidations and shorts 39%.

ETH open interest (OI) has been declining — although at a slow pace — sitting at $15.09 billion today. This indicates that traders are more cautious, especially as wider bearish sentiment seems to be overshadowing bullish sentiment around the potential launch of spot ETH ETFs.

Ethereum's 30-day Market Value to Realized Value (MVRV) ratio is at -7%, indicating all addresses that purchased ETH within the last 30 days are at an average loss of 7%. Historically, ETH often rebounds when the 30-day MVRV reaches -15% to -17%.

ETH/USDT 4-hour chart

As a result, ETH may need to shed 4% of its value to collect liquidity around the fair value gap of May 20, extending from $3,110 to $3,457 before a fresh rise. The $3,203 key support level could prove crucial in the potential decline to help ETH bounce back up.