The U.S. Securities and Exchange Commission (SEC) recently approved multiple Bitcoin spot ETFs, leading the market to believe that an Ethereum spot ETF will also be launched this year. But if an Ethereum spot ETF is approved, will it experience a similar decline to Bitcoin?
In the past, when the Bitcoin spot ETF was launched, the market believed that traditional financial institutions would accelerate their entry into the market with regulatory support, and Bitcoin quickly surged to $49,000. However, Bitcoin failed to stabilize and experienced a sharp decline, falling below $39,000 at one point, with a 11.6% drop in two weeks.
The continuous decline is believed to be related to the Grayscale Bitcoin Trust (GBTC) trading at a discount to its net asset value and high management fees, leading investors to take profits. According to the latest data from Arkham Intelligence, Grayscale has transferred nearly 113,000 Bitcoins worth over $4.5 billion out of its wallet addresses since the 11th.
If a Grayscale Ethereum spot ETF follows the same pattern as the Bitcoin spot ETF, the Ethereum price may also be impacted if an Ethereum spot ETF is approved.
However, on the other hand, if you are looking for long-term investment opportunities, now may be a good time to consider investing in the Ethereum Trust (ETHE). According to ycharts, the current premium rate for ETHE is 16.49%. If the Ethereum spot ETF is approved as expected this year, the discount may present a good entry opportunity. (It remains to be seen whether the situation with Ethereum will replicate that of Bitcoin, considering the price of the Ethereum spot ETF and its potential for continued growth).
Another potential positive factor is the long-awaited upgrade of the Ethereum network, known as the London Hard Fork, which plans to introduce the EIP-4844 (protodanksharding) proposal to temporarily store transaction data and enhance Ethereum’s data storage capacity. This has the potential to further reduce transaction fees on the second layer network, leading the market to believe that the price of ETH will reach a new level.
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