The recent approvals of Ethereum ETFs have ignited discussions and speculations within the crypto market, captivating investors and analysts alike.
Following the approval of the spot Ethereum ETF last week, Ethereum experienced a surge, reaching highs of $3,959 before retracing to its current trading price of $3,757.
While the climb to $3,900 represents a notable increase, it falls short of the dramatic surge anticipated by many observers after the US SEC’s approval of the spot ETFs.
Experts hold divided opinions on whether the market has fully absorbed the impact of these approvals. Arthur Cheong from DeFiance Capital suggests that the market has yet to adjust to this significant change, emphasizing that such shifts in market dynamics cannot be immediately reflected in the price.
Brian Rudick from GSR agrees, drawing parallels with the pattern observed with spot Bitcoin ETFs, where significant price movements followed both the anticipation and the actual launches of the ETFs.
Despite Ethereum's recent gains, the consensus among these market experts is that the full potential of the ETF approvals may not yet be reflected in the market.
Rudick predicts that ETH's future price will depend on the inflows into the newly launched spot Ethereum ETFs, similar to observed trends with Bitcoin, forecasting a potential "50-100% increase" in Ethereum's price driven by strong ETF inflows.
On the other hand, Danny Chong from Tranchess believes that the approval is only partially factored into the market, expecting significant volatility and potential "sideways trading" in the short term as the market adapts to fluctuating demand and supply dynamics.
Chong emphasizes the potential for increased institutional adoption and stabilization of Ethereum's long-term prices due to the introduction of spot ETH ETFs.
Meanwhile, Michael Nadeau, the founder of The DeFi Report, has analyzed the potential effects of Ethereum's spot ETF approval on its market trajectory, outlining a valuation framework suggesting a potential $10 trillion market cap for the entire crypto market.
Nadeau projects that ETH could surpass Bloomberg's estimated 10-20% of Bitcoin's net inflows, achieving a market cap of $1.8 trillion at the peak of the cycle, potentially driving the price of ETH to around $14,984, assuming constant supply.
For comparison, he notes that if Bitcoin were to attain a $4 trillion market cap, its price could soar to $202,000.
May 2024, Cryptoniteuae