Spot ether ETFs could launch on July 23, according to experts, while the chances of pro-crypto presidential candidate Donald Trump winning the election have been growing.
Posted July 17, 2024 at 12:09 pm EST.
The long-awaited launch of spot ether (ETH) exchange traded funds (ETFs) could happen as early as July 23, according to industry experts. And much like the January launch of eleven spot bitcoin (BTC) ETFs, the resultant surge in demand could catapult the price of ETH, but perhaps not as significantly as what happened with BTC, which reached record highs after the launch of its spot ETFs.
“The magnitude of this success is probably going to be less significant for Ethereum than it was for Bitcoin,” said Jonathan Bier, chief investment officer at London-based investment management firm Farside Investors.
“Bitcoin was first,” Bier explained, adding that bitcoin is primarily a financial asset, used as a safe haven, while ether derives its value from the level of developer activity on its platform.
The latest moves with ether all began in late May when the U.S. Securities and Exchanges Commission (SEC) unexpectedly approved the 19b-4 forms for spot ether ETFs from BlackRock, Bitwise, Grayscale, Van Eck, Ark 21Shares, Fidelity, Franklin Templeton, and Invesco Galaxy. The forms are a key part of the SEC’s preliminary process for ETF approval.
These entities are now required to submit finalized S-1 forms by today, which if approved, would greenlight the launch of spot ether ETFs as soon as next Tuesday, sparking a potential boon for ETH investors.
“The ETF will likely see significant inflow,” crypto investor Lark Davis told Unchained. “The stars are aligning even if there is some kind of, let’s say, price turbulence in the first day or two of these products listing.”
Ether rallied about 30% to $3,943 around the time of the 19b-4 approvals, before dipping below $3,000 earlier this month, according to CoinMarketCap. It currently trades around $3,445, up more than 12% since last week.
Pedro Lapenta, head of research at Hashdex, an investment firm which manages a bitcoin futures ETF, expects ether ETF inflows of roughly $5 billion by the end of 2024. However, Lapenta told Unchained that sustained price action may take time.
Read more: VanEck to Waive Initial Fee on Spot Ethereum ETFs, Plans to ‘Make It Up’ on DeFi Volume
“We do think ETH’s price will respond favorably in the short term,” Lapenta said. “However, the true price impact of these ETFs will play out over a longer period.”
The crypto markets overall have also been buoyed by the prospects of a Donald Trump presidency, who has increased his polling lead over incumbent Joe Biden after a foiled assassination attempt last Saturday.
Trump, who previously had been critical of cryptocurrencies, has indicated he will be a pro-crypto president if he wins November’s election, and in May he became the first major presidential candidate in American history to accept cryptocurrency donations.
Read more: Trump-Themed Tokens Soar, Odds of Election Win Hit 71% on Polymarket
However, Bier is skeptical of the impact of Trump’s potential victory on long-term crypto prices, pointing out how U.S. presidents frequently break campaign promises.
“I would love to believe Trump will retain his pro crypto stance once he gets into office,” Bier said. “But unfortunately, I have no reason to believe that.”
If the spot ether ETF launches next week, it will do so right before the annual Bitcoin Conference which kicks off on July 24 in Nashville and will feature Trump as its marquee guest. Trump has confirmed he will be speaking at the conference despite the injury he sustained in the attempt on his life.
The controversial former president has already received $1.8 million in bitcoin contributions and almost $1 million in ether according to the Wall Street Journal. He also launched a “Mugshot Edition” NFT last year following his indictment for election racketeering, in addition to his other collections which include the POTUS Trump NFT collection and the Donald Trump NFT collection, according to NFT site nftevening.com.
Read more: Trump Picking J.D. Vance as Vice Presidential Running Mate Sends Vance Related-Memecoins Soaring
Conversely, many consider President Joe Biden outrightly anti-crypto given the hostile stance the SEC has taken against many crypto firms during his administration. And Biden himself vetoed the repeal of SAB 121 – an SEC accounting guideline that makes it onerous for banks to service crypto clients.
Leading up to the veto, Trump’s campaign appeared to criticize Biden’s stance on crypto regulation, touting Trump’s record on “innovation in financial technology” while blasting Biden for his more restrictive crypto policies.
Unlike Bier, Davis told Unchained he expects Trump to follow through on his commitment to crypto.
“I think we can expect some very positive crypto announcements and regulations from the White House,” Davis said. “It is an oddly bullish moment for the markets.”
Whatever the outcome of the election and the resulting crypto regulatory landscape, most analysts agree that a spot ether ETF will lift the price of ETH in the long run, even if prices fluctuate soon after such a launch.
“Regardless of the near-term price action for BTC and ETH, we view the longer-term investment case for crypto to be as strong as ever,” Lapenta said. “Current prices may present an extremely attractive entry point for investors with extended time horizons.”
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