The Ethereum (ETH) price is trading choppy in late Thursday trade as in wake of news dropping that the US SEC has approved spot Ethereum ETFs, a spectacular u-turn that has shocked the market that, up until one week ago, was betting that Ethereum ETFs would be rejected this week.
BOOM!! APPROVED! There it is. The SEC just approved spot #Ethereum ETFs. What a turn of events. It's really happening.
h/t @PhoenixTrades_ pic.twitter.com/KQ39mDyCbT
— James Seyffart (@JSeyff) May 23, 2024
The Ethereum price was last trading around $3,800. That’s down sharply from earlier session highs near $4,000, but also up sharply from earlier session lows at $3,520.
On the week, the Ethereum price is up 24%. Rumors of an SEC u-turn first started on Monday.
In the subsequent days, this was followed up by a flurry of engagement between ETF issuers and the SEC.
All the while, traders aggressively bid up the Ethereum price on bets that ETFs will foster ecosystem growth.
Everything culminated on Thursday when the SEC approved 8 spot Ethereum ETFs.
Why Spot Ethereum ETF Approval Matters
Spot Ethereum ETF approvals in the US will push up the Ethereum price as institutional investors enter the market.
Traders will recall Bitcoin surging to fresh record highs following spot Bitcoin ETF approvals earlier this year.
Well, the Ethereum price could soon follow suit. Its current record highs are near $4,900, 28% up versus current levels.
That will bring more liquidity to the Ethereum ecosystem, which should spur more adoption, activity and development.
Ethereum ETFs should help solidify Ethereum’s status as the king of smart-contract-enabled blockchains.
Ethereum Price Prediction – Where is ETH Headed Next?
Confirmation of the approval of spot Ethereum ETFs could result in some short-term sell pressure.
That would be reminiscent of what happened when spot Bitcoin ETFs garnered approval earlier this year.
Some traders wait for confirmation of a positive market catalyst before taking profit.
Assuming there is decent demand for Ethereum ETFs when they go live, ETH could soon go above $4,000.
Uncertainty regarding Ethereum’s regulatory situation in the US prompted a lot of traders to short ETH versus other cryptos.
The SEC was thought to have been campaigning to classify ETH as a security earlier this year.
But now that spot Ethereum ETFs have been approved, that pretty much clears things up. ETH is a digital commodity like Bitcoin.
Many shorts need to be unwound and that could be an ongoing tailwind for the market.
And cryptocurrencies technicals suggest that since breaking its March to mid-May downtrend and above its 21 and 50DMAs, a retest of March highs near $4,100 is likely.
Once this level goes, a quick push higher to 2021 highs near $4,900 is likely.
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