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Ether Surpasses $2.4K: Traders Anticipate Potential Ether ETF Boost

Jan 11, 2024 at 10:26 am

BlackRock's recent submission of the S-1 form to the U.S. Securities and Exchange Commission (SEC) for the iShares Ethereum Trust, an Ethereum spot exchange-traded fund (ETF), has sparked considerable interest and speculation in the cryptocurrency market.

Over the past 24 hours, Ether (ETH) and native tokens associated with applications built on the Ethereum platform have witnessed substantial surges. This surge is largely attributed to traders speculating on the possibility of an Ethereum ETF proposal, mirroring the anticipation surrounding the expected approval of a Bitcoin ETF in the United States.

During the early hours of Wednesday in Europe, Ether surged past the $2,400 mark, registering a 5% increase within the last 24 hours. In contrast, Bitcoin experienced a 2.2% decline in the same period due to the impact of a series of fake tweets from the temporarily compromised U.S. Securities and Exchange Commission's X account. This incident led to significant volatility in Bitcoin trading.

BlackRock's strategic move in filing the S-1 form for the iShares Ethereum Trust signals a proactive approach towards an Ether ETF. The sentiment within the crypto community suggests that traders are strategically positioning themselves in anticipation of a potential Ether-focused product. This development could provide professional investors in the U.S. with spot exposure to the blockchain's token without direct ownership.

Alex Onufriychuk, CEO of Kaminari, has identified a noticeable trend in the crypto community, indicating a frontrunning strategy for the potential Ether ETF. Tokens associated with layer 2 networks, such as Mantle's MNT and Optimism's OP, have experienced gains of up to 9%. These networks operate atop Ethereum but function as independent blockchains, offering users cost-effective and faster transaction capabilities compared to the Ethereum main blockchain.

Lido’s LDO and RocketPool’s RPL have shown gains of up to 17%, allowing users to stake Ether on their platforms and earn around 4.5% in annualized staking rewards. Despite these positive developments, market observers emphasize the speculative nature of the Ether ETF's possibility as of Wednesday.

Martin Lee, an analyst at on-chain data firm Nansen, points out the rationale behind considering ETH as the likely next ETF after BTC, given its position as the second-largest cryptocurrency. However, caution is advised, with some experts suggesting that select tokens within the Ethereum ecosystem, including LIDO, ENS, and MKR, could experience notable movements in the coming days.

While thirteen issuers, including industry giants BlackRock and Fidelity, eagerly await the anticipated approval of a spot Bitcoin ETF, market participants remain vigilant and attentive to the dynamic and evolving landscape of cryptocurrency investments.

Read More: Bitcoin's Potential Dip to $36K: Insights and Projections by QCP Capital

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