Following a market-wide crash that drove Bitcoin prices down to as low as the $24,000 range on derivatives exchanges, marking the largest liquidation event since the FTX collapse, there was a surprising development.
In an exclusive report from Bloomberg, syndicated by Yahoo Finance, it was revealed that the SEC (U.S. Securities and Exchange Commission) is poised to approve Ether-Futures ETFs.
Will An Ethereum ETF Be Approved?
The headline alone triggered a significant rebound in Ethereum’s price, with the cryptocurrency sharply rising from its low of $1,550 on Binance, even reaching $1,465 on Bybit, and settling just under the $1,700 level at the time of writing.
ETH/BTC is currently showing a 1% gain for the day, although ETH/USDT is still down by 6% over the past 24 hours, outperforming Bitcoin, which is down by 7.5%.
However, the full text of Bloomberg’s report offers a less definitive outlook:
“The regulator isn’t likely to block the products, which would be based on futures contracts for the second-largest cryptocurrency, according to people familiar with the matter. Nearly a dozen companies, including Volatility Shares, Bitwise, Roundhill, and ProShares, have filed to launch the ETFs. It couldn’t immediately be determined which funds would receive approval. Officials have indicated that several of them might get the green light by October…”
This suggests that while the SEC is not expected to reject these products, the exact timeline and approval details are still somewhat uncertain.
The mere headline about the SEC potentially approving Ether-Futures ETFs had an immediate and significant impact on Ethereum’s price. It quickly rebounded from its low of $1,550 on Binance, even reaching $1,465 on Bybit, before settling just below the $1,700 mark at the time of this writing.
ETH/BTC has shown a 1% increase on the day, although ETH/USDT remains down 6% in the past 24 hours, outperforming Bitcoin, which is down by 7.5%.
However, the content in the rest of Bloomberg’s article is less definitive:
“The regulator isn’t likely to block the products, which would be based on futures contracts for the second-largest cryptocurrency, according to people familiar with the matter. Nearly a dozen companies, including Volatility Shares, Bitwise, Roundhill, and ProShares, have filed to launch the ETFs. It couldn’t immediately be determined which funds would get the green light. Officials have indicated that several might by October…”
While the potential approval of an Ethereum ETF is generating excitement, the fact that confirmation may not arrive until October has left some traders cautious, as observed in discussions on social media.
It’s important to note that a US Bitcoin or Ether Futures ETF is generally viewed as less bullish for the cryptocurrency market than a spot ETF. Spot ETFs would involve the direct ownership of the underlying assets (in this case, Bitcoin or Ethereum), while Futures ETFs are based on futures contracts, which can have different implications for market dynamics.
Furthermore, the opinions of experts and former SEC officials vary. Some believe that approval of any type of Bitcoin ETF may not occur in the near future, possibly extending beyond 2024. Regulatory considerations and market dynamics play a significant role in shaping the trajectory of ETF approvals in the cryptocurrency space.
Crypto Prices Crash
The Bitcoin market’s downward movement preceding the news about the Ethereum ETF can be traced back to China’s Evergrande declaring bankruptcy and unconfirmed rumors about Elon Musk’s SpaceX selling their Bitcoin holdings.
Following the flash crash, Ethereum’s price rebounded by more than 10% and is currently in a consolidation phase as the market digests the day’s developments leading up to the daily closing.
As an update, Ethereum concluded the day at $1,680, while Bitcoin finished at $26,610.