• ETFs are expected to be launched as early as the new year.
• The price of Ethereum could reach $20,000 as anticipation for the ETF’s approval rises.
• Ethereum has hit a new five-month high as a result of Bitcoin’s month-long bull run.

The newly released ETF caused a seismic reaction in the media and the industry’s price action alike, as it opened the door for more institutional capital to enter the market. The amount of capital flowing directly affects market volatility. Every crypto ETF increases institutional trust in the markets. A Ethereum ETF would therefore allow investors to be more exposed to cryptocurrency-assets.

Ethereum ETFs may be approved quicker

The market is full of optimism after the first Bitcoin futures ETF gained the SEC’s approval, and successfully launched in October 2021. New products like Ethereum ETFs will be easier to launch once the preconditions are met.

Grayscale’s CEO, Michael Sonnenshein, told CNBC that the ProShares Bitcoin futures ETF creates a precedent for the quicker delivery of new products for the market, including an Ethereum ETF. Because they actively monitor one, the SEC seems to be more comfortable with crypto ETFs.

VanEck, ProShares and many other firms have submitted for Ethereum ETFs to the SEC. However, they corrected their submissions as the SEC considered their Bitcoin ETF. Sonnenshein thinks it’s only a matter time before Ethereum ETFs can be approved and transacted.

Trey Griggs told Insider that the Bitcoin ETF already did all the “heavy lifting,” and with Ethereum bolstering, its place as an asset class calls for more demand from investors. He also noted that an Ethereum ETF is technically “an identical product with a slightly different underlier,” which could expedite the approval process.

Similar opinions were also expressed by other influential individuals. Stefan Coolican, Ether Capital’s CFO, highlighted that “it has become a certainty that an ether ETF of the same kind can’t be that far off,” given that a Bitcoin ETF has already received approval. Moreover, the Wolf of All Streets tweeted that an Ethereum Futures ETF is more plausible before there’s a “physical Bitcoin ETF.”

Flipside

• Ethereum could rally to an all-time high ahead of the launch of an Ethereum ETF. However, it may plummet as traders might be buying news.
• Bitcoin gained momentum before ETF but did not maintain its high-level value.
• Grayscale is still waiting for the SEC’s approval to convert its BTC Trust into a Bitcoin Spot ETF.

Crypto Is A Buzzword

ProShares’ ETF generated market uproar, however to combat competition, after speculation arose that a second futures ETF might be on the horizon, Grayscale, which handles multiple crypto trust funds including Bitcoin and Ethereum, is taking another SEC filing route.

Michael Sonnenshein noted that “the future and spot prices are interrelated,” arguing that the SEC will now be required to approve divergent crypto ETFs as they stand in the same financial pool.

What’s more, if an Ethereum ETF is approved and launched by 2021, other Altcoin ETFs could also be considered, including blue-chip tokens such as , , and , which ultimately have the same exact underlying usability.

In contrast to these theories, CEO of Arca Rayne Steinberg, argues that while futures ETFs are good for short-term trading, they have “massive tracking error issues over long periods,” which contradicts most Bitcoin trader values. While futures ETFs provide some market exposure, traders can still achieve stability and resilience in the physical Bitcoin ETFs.

What are the reasons to care?

Futures ETFs differ from physically-backed ETFs in that they allow investors to speculate about the future value of Bitcoin instead of being exposed to its price. Every crypto ETF needs to build trust within the market and attracted additional institutional capital. This helps reduce volatility over time.

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