Key Points
- The U.S. SEC’s decision on Ethereum ETF applications is highly anticipated.
- Declining on-chain volume in Ethereum suggests a decrease in market interest.
The crypto community is eagerly awaiting the U.S. Securities and Exchange Commission’s (SEC) decision on several Ethereum (ETH) Exchange Traded Funds (ETF) applications.
Understanding Ethereum ETFs
An Ethereum ETF would allow investors to gain exposure to the altcoin without directly owning it. While some believe the SEC will approve it, others are skeptical due to recent developments.
Gary Gensler, the SEC chair, has previously expressed his dislike for the crypto ecosystem. This has led to speculation that he may hinder the Ethereum ETF approval. The SEC has also recently served Wells Notices to several firms including Consensys, a blockchain software company with ties to Ethereum. This could potentially impact the approval of the applications.
J.P. Morgan’s Perspective
J.P. Morgan, however, does not expect an outright rejection of the Ethereum ETF applications. They predict a delay but not a complete denial. The SEC has until the 23rd and 24th of May to make a decision.
The broader market appears skeptical, as shown by recent outflows from Ethereum investment products and a decline in on-chain volume. At the time of writing, the volume was 11.17 billion, a significant decrease from the March peak. This suggests that market interest in Ethereum may be waning.
The SEC’s decision could impact Ethereum’s price, which currently stands at $2,910. If approved, the price could potentially rise to $3,500. If not, it could fall to $2,700. The market is particularly interested in two major applications from VanEck and ARK.
ARK and 21 shares initially included staking in their Ethereum ETF filing but later amended it due to concerns about the SEC’s classification of the cryptocurrency. However, this does not necessarily mean the Ethereum ETF will be approved.
J.P. Morgan has also noted the possibility of a lawsuit if the SEC denies the applications, similar to Grayscale’s legal challenge before Bitcoin ETFs were approved. Despite the uncertainty surrounding the verdict, the number of Ethereum holders continues to increase, with over 120 million participants reported by Santiment.
