Key Points
- Analysts predict that the SEC could approve the S-1s for Ethereum ETFs in the next 2-3 months.
- There are concerns that Grayscale’s Ethereum Trust (ETHE) could see significant outflows following the approval, similar to what happened with GBTC.
Nate Geraci, a policy and market analyst at ETF Store, has suggested that the SEC’s final approval of S-1s for Ethereum ETFs could occur within the next two to three months.
Geraci’s prediction is noteworthy as he had accurately anticipated the SEC’s approval of the 19b-4s (exchange applications) and the subsequent delay in the S-1s. His insights cannot be easily dismissed.
Market Reactions
Eric Balchunas, a Bloomberg ETF analyst, supports Geraci’s forecast and has identified July as a potential approval date.
If this prediction is accurate, market observers will turn their attention to Grayscale’s Ethereum Trust (ETHE) to see if it experiences outflows similar to those seen by GBTC after the approval of spot Bitcoin ETFs in January.
In just January, GBTC saw outflows of $6.5 billion. If this trend extends to ETHE, it could lead to further outflows as investors redeem their shares.
Kaiko, a market analysis firm, predicts that ETHE, which currently has $11 billion in assets under management, could see daily average outflows of $110 million if it follows the same pattern as GBTC.
Contrary Opinions
However, not all analysts agree with this prediction. Crypto analyst James Van Straten has downplayed the potential for significant outflows from ETHE. He believes that Grayscale’s low-fee Mini Trust could help mitigate any potential losses.
Meanwhile, Ethereum has shown a bearish RSI divergence on the 4-hour chart, indicating that a price pullback may be on the horizon. If this happens, Ethereum could fall back to the moving average or previous support levels before rebounding to the resistance zone.
