Two seasoned Bloomberg analysts upped their odds for ETH, shortly after which a 10% surge was noted on the Ethereum price chart.
Exchange traded funds (ETF) are financial instruments which are traded on stock exchanges similar to the stocks. An ETF collectively holds assets like bonds, commodities, stocks and various others. They are designed to track an specific index or asset class and offer the investors or retailers to buy or sell shares of the ETF at market price.
Source: Premium discount to NAV graph by SSGA
The first ever ETF ever launched in the USA dates back to 1993 and is now a landmark ETF(SPY). It has a total AUM of $526,834.99 Million as of current date. ETFs provide a way for you to trade various asset classes safely including Bitcoin. Currently, various analysts are expecting the ETF of Ethereum. Let’s have a look at the ETF saga so far.
Ethereum ETF: a Saga After the Bitcoin ETF’s Approval
When an ETF which tracks an asset becomes popular, the asset attracts ‘smart money’ along with an increase in trading volume. Meanwhile, an ETF provides liquidity to the underlying asset giving exposure to trade without actually trading the asset.
Source: Blockworks
The approval of spot Bitcoin Exchange traded funds (ETF) by the SEC triggered a substantial rise in the price of BTC. Since then the interest for Ethereum ETF started to pour in. If the Ethereum Spot ETF is approved then it can set the ground for another rally of ETH.
Firms who are looking to trade and list the share ETFs have to do fillings called 19B-4. Let’s have a look to what Form 19B-4 is
– SEC Form 19B-4 is used by the SROs to record a rule change with the SEC.
– Many stock exchanges and financial institutions are SROs, and so their bylaws, rules, and regulations must be filed with the SEC for recordkeeping
– It also includes exhibits intended to elicit information necessary for the public to provide meaningful comment on the proposed rule change.
As per the report by Coindesk and WSJ, the exchanges were asked to update their 19B-4 fillings on an “accelerated basis”.
Bitcoin ETF: Volume But Not the Price
On January 10th, 2024, SEC approved the listing and trading of different number of spot and Bitcoin exchange traded products. Ever since the spot Bitcoin ETF started to trade in the USA investors have poured more than $12 Billion into it.
The majority of it went to either BlackRock ishares or Fidelity investments. Meanwhile, the Grayscale ETF has observed an outflow of more than $17 Billion.
Source: Farside.co.uk
The expense ratio of the largest Bitcoin ETF is hovering around 0.21% while Gray Scale’s expense ratio is near 1.25%. The temporary fee waivers of these exchanges has brought down the expense ratio. Meanwhile, the total cost of ownership is lowest with Fidelity .
Source: Yahoo Finance
Data provided by Yahoo Finance shows that the Spot Bitcoin ETF is currently dominating rather than futures. It currently holds 87% of the market share. The Spot Bitcoin ETF is currently observing a positive net flow and is currently at $257 Million. Currently, IBIT has the highest AUM of $17.94 Billion while GBTC is second with $17.81 Billion.
Are Investors Betting Big on Just Odds?
Ethereum is surging sharply with every updates regarding the ETFs, which have been positive so far. As per the report by Coindesk, the Vaneyck spot ETF of Ethereum can be approved by May 23rd. This has caused an increased net outflow from the staking. The overall net outflow for the past two weeks has been increased to 126,453 as per the data provided by Dune Analytics.
Source: Dune
The highest net outflow in terms of platform can be seen from the Coinbase. Meanwhile, the number of Ethereum deposited in comparison to the validators has soared.
Recently as per the data provided by the Lookonchain James fickle has continued to borrow 350 WBTC and exchanged it for the 6905 ETH to long the ETH/BTC pair. He has been long on the ETH/BTC pair since the first Spot Bitcoin ETF was launched on Jan 10.
A Technical Overview of ETH
Ethereum has a market cap of $446 Billion and is ranked 2nd in the crypto verse. The volume of the ETH has surged by 255% in the last 24 hours. The price of ETH rose 20% in the last 24 hours. ETH rise is speculated due to the upcoming approvals of the Spot ETF.
ETH is forming strong bullish candles on the daily chart. It is trading above the 50,100 and 200 EMA while looking to cross the new highs. The upside momentum of Ethereum can see a halt near $4000. Meanwhile, the support of the asset price can be observed near $3500. The ETH/BTC pair has also seen a strong momentum and is currently at 0.0529.
The RSI of ETH is currently at 71 with the strong positive slope suggesting its presence in the oversold zone. The overall sentiment of RSI and MACD are bullish on the daily chart.
Conclusion
Ethereum ETF can help to bring the value investors to the blockchain. Various analysts are speculating that the Ethereum ETF for various companies may be approved by the end of May 2024. ETH price has observed a significant surge due to the rally . One can expect that Ethereum may see a bull run beyond $4000 in the near future.
Disclaimer
The views and opinions stated by the author or any other person in this article are for informational purposes only and do not constitute financial, investment, or other advice.
