The ether (ETH)-based funds were approved in the U.S. last Thursday.
Saylor Says Ethereum ETF Good for Bitcoin. The approval of spot ETFs for ether (ETH), Ethereum’s native cryptocurrency, has changed the landscape even for bitcoiners like Michael Saylor, founder and director of the software services company MicroStrategy. During his appearance on the podcast “What Bitcoin Did,” he chatted with host Peter McCormack about how politics has changed the position of both Republicans and Democrats on Bitcoin and cryptocurrencies. “Two weeks ago, it looked like bitcoin was going to be the only asset offered through an ETF accepted by Wall Street and was going to be the only legitimate digital asset,” Saylor said.
However, that changed with the approval of ether ETFs last Thursday in the United States and the acceptance of the FIT21 bill in the U.S. Congress. The new legislation aims to regulate the Bitcoin and cryptocurrency ecosystem. For Saylor, all of that boosts the digital asset industry. “I think it’s good for bitcoin. It may be better for Bitcoin because we are politically more powerful when there is support from the entire cryptocurrency industry.”
“The cryptocurrency industry also has substantial political power and many users and serves as another line of defense for Bitcoin.”
Michael Saylor
Investor movements
Saylor believes that everything happening now will lead to big investors allocating money to these financial products or even directly into cryptocurrencies. In that case, he estimates they might invest 5% to 10%, but bitcoin will make up 60% to 70% of that allocation. Therefore, he believes everything happening regarding regulation and approval of bitcoin and ether ETFs could accelerate institutional adoption.
It’s a good thing for marketing, and many things will happen, so investors need to rethink all their investment models and move forward in a new world.
Michael Saylor.
Saylor was one of the least optimistic about Ethereum ETFs. At the beginning of May, he assured authorities would not approve these financial instruments and would clarify that the cryptocurrency was a security, not a commodity, as Bitcoin is. The approved funds of VanEck, Ark21Shares, Hashdex, Grayscale, Invesco Galaxy, BlackRock, and Fidelity are waiting for the U.S. Securities and Exchange Commission (SEC) to initiate their listing on the stock exchange. Some forms still need to be completed and submitted by the issuing companies before trading can begin.
____
Ethereum: Higher chance of upside than Bitcoin
According to Growth Arcane, another essential consideration is the uncertainty surrounding the launch date for Ethereum ETFs. The SEC, ETF issuers, and exchanges have spent months negotiating the documents required to launch these BTC instruments, a process that has just begun for ETH ones. “This could take weeks or even months to finalize,” Growth Arcane warns. There is no set date for the launch of Ethereum ETFs, while Bitcoin ETFs came out the day after approval. Therefore, even though authorities already approved them, the capital inflow they can generate is delayed.
In addition, Growth Arcane highlights that ETH’s market capitalization is three times smaller than BTC’s, making it more volatile and easy to move in either direction. “We see this as a positive, especially given that major players like BlackRock and JP Morgan have a positive outlook on ETH,” he emphasizes. Given all this, the firm does not rule out a post-approval news selloff event occurring, as other specialists have noted. “But we advise against trading on this expectation,” he clarifies, as a surge in demand is possible following the ETF’s arrival to institutional investors.
Ethereum Accumulation
To put into perspective, Growth Arcane reminds us that those who sold BTC at the time of approval lost out on generating more yield if they did not repurchase at lower prices. Therefore, he considers it more prudent to maintain exposure to ETH and accumulate in the face of pullbacks. “We see opportunities to accumulate after a pullback between $2,900 and $3200, which have historically been strong support and resistance levels,” the report mentions. It is wise to progressively reduce exposure to ETH once it surpasses its all-time high.
Meanwhile, other specialists see bullish possibilities that could imply a better time for profit-taking later. Standard Chartered Bank, for example, argues that Ethereum ETFs can attract inflows of between $15 billion and $45 billion, pushing the ETH price to $8,000 by the end of 2024. ETH remains trading around $3,800, showing no significant movement following the ETF approval. Analysts such as Michaël van de Poppe believe the market discounted the news two days earlier with a 20% rise and is waiting for the launch to define the direction.