Digital asset trading company QCP Capital stated in a post yesterday that there are two main reasons for the sudden rebound of Ethereum in the market downturn on the 18th. They also predicted that ETH may approach its historical high of $4,800 after the listing of Ethereum spot ETF.
Title: Ethereum spot ETF may push ETH price close to $4,800 historical high
SEC to end investigation into Ethereum
The U.S. Securities and Exchange Commission (SEC) approved the 19b-4 rule change documents for 8 Ethereum spot ETFs on May 24, marking an important step towards the listing of Ethereum spot ETF. The market is closely monitoring when the SEC will approve the S-1 registration statement and officially list the ETF.
However, the market is currently experiencing a downturn. After the approval of the 19b-4 document by the SEC, the price of ETH briefly reached a high of $3,977, but then continued to fluctuate and fell to $3,355 on the 18th of this month, a decrease of 13.7%.
However, there has been a significant rebound in the past two days, with the price pulling back to $3,545 before the deadline. Compared to Bitcoin’s increase, Ethereum has shown much stronger strength and has fully recovered from the decline of the past week.
In this context, QCP Capital, a digital asset trading company, stated in a post yesterday that the price of ETH has risen sharply from a low of $3,400 on the 18th, implying a significant increase in short-term volatility to 65%. There are two main factors behind this strong bullish sentiment:
The U.S. Securities and Exchange Commission (SEC) has decided to end its investigation into Ethereum 2.0, excluding the accusation of treating ETH sales as securities transactions.
According to sources, potential issuers of Ethereum ETF are actively responding to the comments made by the SEC and plan to submit their responses this week.
QCP Capital pointed out that the options market currently shows optimistic sentiment, with active trading of call options at different maturities. In addition, QCP Capital also predicts that after the listing of Ethereum spot ETF, the price of ETH is expected to approach the historical high of $4,800.
Implied Volatility (IV) is the expected volatility derived from option prices. It reflects the market’s expectation of the degree of price volatility of the underlying asset in the future. Specifically, implied volatility represents investors’ views on the magnitude of price changes in the asset over a period of time. When implied volatility rises, it usually means that the market expects greater volatility in the underlying asset’s price; conversely, when implied volatility decreases, it means that the market expects a decrease in price volatility.
According to a previous report by Dongqutou, the parent company of the Metamask wallet, Consensys, received a Wells notice from the SEC in April, stating that the SEC considers Consensys an unregistered broker-dealer and intends to take enforcement action against it for violating securities laws through the MetaMask wallet.
To defend the Ethereum ecosystem, Consensys also filed a lawsuit against the SEC in that month, accusing the SEC of attempting to classify Ethereum as a security, which constitutes an “illegal seizure” of Ethereum and requested the court to declare that Ethereum is not a security. It also argued that any investigation conducted against ConSenSys based on the premise that Ethereum is a security would violate administrative procedures.
After two months of silence, Consensys announced in a tweet yesterday that the SEC will end its investigation into Ethereum and will not accuse the sale of Ethereum as a securities transaction.
Meanwhile, according to The Block, two sources reveal that the issuers of Ethereum spot ETF received comments from the SEC regarding the S-1 document last week and plan to submit their responses before this Friday. A source from one issuer described the latest round of comments as “reasonable” and expects approval as soon as possible, while another source from another issuer described the comments as “relaxed”.
Previously, Eric Balchunas, an analyst from Bloomberg who has been closely following ETF developments, predicted in a post on the 15th that the launch date of Ethereum spot ETF would be brought forward to July 2.
With the release of news about the progress of SEC’s approval of Ethereum spot ETF by numerous institutions and analysts, we are getting closer to the listing of Ethereum spot ETF. However, whether the cryptocurrency market can break free from its continuous decline through the listing of Ethereum spot ETF still needs continuous attention.