Ethereum price bolstered as hype for spot ETFs builds

Ethereum (ETH) experienced a significant rebound over the weekend and continues to appreciate in price as institutional investors seize the opportunity presented by last week's price dip to increase their positions in the second-largest cryptocurrency by market capitalization.

Ethereum price climbed from a low of $3,048 on Friday, 12 July, to an intraday high of $3,372 on Monday, 15 July, marking a 10% increase. At the time of writing, ETH is trading at $3,454 as traders position themselves ahead of the expected launch of the first spot Ethereum exchange-traded funds (ETFs) in the US.

Spot Ethereum ETFs when?

To understand why the crypto community is so excited about spot ETFs, one only has to remember how the launch of these financial instruments for Bitcoin (BTC) earlier this year propelled the price of the world's largest cryptocurrency to new heights.

Now, it's Ethereum's turn to enjoy the benefits boasted by its big brother. But when will spot Ethereum ETFs launch? The buzz around the crypto community and financial insiders all but confirms that spot Ethereum ETFs are imminent and may even go live this week.

On Monday, Nate Geraci, ETF analyst and president of The ETF Store, highlighted this in a post on the X social media platform, stating, "Welcome to spot ETH ETF approval week." Geraci anticipates that up to eight spot Ethereum ETFs will be introduced by the end of this week.

The United States Securities and Exchange Commission (SEC) approved two spot Ethereum ETFs—Grayscale Ethereum Mini Trust and ProShares Ethereum ETF—for listing on the New York Stock Exchange’s (NYSE’s) Arca electronic trading platform. This approval, announced in a 17 July filing, allows NYSE to facilitate trading of these funds. However, final comments on the ETFs' respective S-1 filings are still pending before the spot products can commence listing. Grayscale expressed excitement over the approval and continues to work with the SEC for full regulatory approval of US spot Ethereum ETPs. The ProShares Ethereum ETF, having filed its Form 19b-4 later than its peers, is not among the eight expected to list next week.

On 23 May, the SEC approved spot Ether ETF 19b-4 filings from eight asset managers, including VanEck, 21Shares, and Bitwise. Experts believe the final approvals could be issued as early as this month.

During a June Senate Banking Committee hearing, SEC Chair Gary Gensler hinted that the commission could approve the S-1 filings "sometime over the course of this summer." Gensler did not provide a specific date. However, Bloomberg analyst Eric Balchunas predicts that the eagerly awaited Ethereum ETFs might debut in the United States by 23 July. Balchunas noted that the SEC requested applicants to submit revised S-1 forms by 16 July, ahead of a possible 23 July launch date.

Following the success of spot Bitcoin ETFs, spot Ethereum ETFs are anticipated to attract substantial capital inflows once they begin trading, potentially driving Ethereum's price higher.

Positive inflows in Ethereum investment products

Ethereum's recent rally coincided with increased inflows into global Ethereum investment products. Ether-linked investment products saw inflows of $72.1 million between 8 and 12 of July, bringing the total outflows for the past two weeks to $82.4 million and the year-to-date net inflows to $57 million.

During the same period, the price of ETH surged by approximately 11%, bucking the trend shown by Bitcoin and the wider crypto market, which was suffering under selling pressure from Mt. Gox repayments and the German government's Bitcoin sales.

Institutional investors could be capitalising on the recent crypto market decline, taking the opportunity to buy Ethereum at bargain prices in anticipation of price appreciation after the spot ETF launches, which may spur the crypto sector into a new uptrend. 

Ethereum's V for victory

Since 27 May, Ethereum's price has been forming a V-shaped recovery pattern on the daily chart.

A V-shaped recovery is a bullish chart pattern that occurs when an asset sharply rebounds after a significant decline, reaching the resistance at the top of the V formation.

At the time of writing, ETH currently trades above the 50-day exponential moving average (EMA) at $3,405. The rising relative strength index (RSI) also indicates building bullish momentum for ETH. This pattern suggests that with the approval and launch of spot Ethereum ETFs, ETH might complete the V-shaped recovery and trade around $4K.

Could Ethereum outperform Bitcoin?

A new report from crypto data firm Kaiko suggests that Ethereum might outperform Bitcoin following the introduction of the long-anticipated spot Ethereum ETFs.

The report focused on the ETH to BTC price ratio, which gauges the number of BTC needed to buy 1 ETH. An increase in this ratio indicates a higher price of Ethereum relative to Bitcoin and vice versa.

Currently, the ratio stands at 0.05, up from 0.045 before the SEC gave the green light to the spot Ether ETFs.

The report also pointed to Ether's 1% market depth as a potential trigger for an ETH bull run. Market depth refers to the level of liquidity in a market, with lower liquidity leading to higher volatility and higher liquidity helping to stabilize prices during large trades.

This low market depth is backed by the Ethereum Exchange Reserve, which tracks the amount of Ether available for purchase on exchanges. The reserve is at multiyear lows, indicating a possible supply shock driven by institutional demand for Ether ETFs, potentially pushing prices significantly higher.

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As excitement builds around the imminent launch of spot Ethereum ETFs, ETH has demonstrated impressive resilience and growth. The recent price rally, coupled with increased institutional interest, suggests that Ethereum could see substantial gains as the first spot ETFs become available.

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Thanks to its user-friendly interface, advanced trading tools, and competitive fees, StormGain stands out as a top choice for both new and experienced traders. The platform's robust features, such as a loyalty programme with increasing rewards and a built-in Bitcoin cloud miner that earns users BTC for free, give traders that little bit extra to boost their income.

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