Ethereum Poised for Breakout? SEC ETF Approval (July 23rd) Could Be a Game Changer

• The much anticipated Ethereum (ETH) Exchange Traded Funds (ETFs) are expected to be launched on July 23. 

• An analyst believes that the price of ETH could fall if supply keeps increasing at the current rate. 

Ethereum (ETH) has slightly bounced back to hit $3,484 after surging by 2.4% in the last 24 hours and 10% in the last seven days. 

In recent weeks, ETH has appreciated by 25% to reflect investors’ sentiment and anticipation surrounding the impending Ether Exchange-Traded Fund (ETF) approval. Regardless of the potential, an analyst identified as Crypto Banter has cautioned against buying the asset now. According to him, the fee structure of Grayscale could trigger a huge sell-off as it happened with BTC. 

Investigating this, CNF discovered that most ETF fees range from between 0.12% to 1.25%. However, Grayscale alone imposes a fee of 2.5%. As we reported, this is at least 10 times higher than that of the other providers. According to Grayscale CEO Michael Sonnenshein, the higher fees match GBTC’s liquidity and track record. Taking a dig at the other providers, Sonnenshein alleged that the lack of proper track record of its competitors is the reason for their lower fees. 

Per the observation of Crypto Banter, Grayscale’s ownership of 2.96 million ETH ($10 billion) could motivate it to impose higher fees on its potential ETH ETF just as witnessed in its Bitcoin ETF. 

$BTC’s price action after the ETF launch… CAN WE EXPECT THE SAME FROM $ETH? Today I’m showing you why you should WAIT before buying $ETH and WHEN you should buy.

ETH ETFs Could be Launched on July 23, Analyst Expects Price to Fall 

Currently, Reuters discloses that the US Securities and Exchange Commission (SEC) has given the green light to at least three asset managers to begin the trading of spot Ether ETFs on July 23. However, the approval is subject to the submission of final documents to regulators. 

Speaking on this, Bitwise Asset Management’s Matthew Hougan expressed his excitement, stating that the official approval would be the birth of a “new asset-class.” According to him, it would be a huge success if the Ether ETF could raise $5 billion, $10 billion or even $15 billion in the first two years of operation. 

If you want to invest in the growth of tokenization, ethereum is like the picks and shovels play. It underpins all of it. … I think that is going to appeal to a lot of people…It’s [bitcoin]moving into the mainstream…That’s going to be a multiyear story…If we get five or 10 or 15 billion dollars in the first two years of these ethereum ETFs, that is a massive runaway success.

Similar to the position of Crypto Banter, an analyst identified as Benjamin Cowen discloses that the price of ETH could decline if supply continues to increase at the current rate. The supply of ETH dropped by approximately 455,000 ETH in April 2024 after it became deflationary. However, it has increased by 150,000 ETH since then. 

If the supply of ETH keeps increasing at 60,000 ETH per month, then we will see the supply revert to what it was back at the merge. If it follows 2016, then ETH/BTC final capitulation will not start until September 2024, which would be enough time for the novelty of the spot ETF relative to BTC to potentially wear off.