The U.S. Securities and Exchange Commission (SEC) is set to decide this week whether to approve an Ethereum spot ETF. In response to this, Joseph Lubin, co-founder of Ethereum, expressed that if approved, Ethereum may face a supply shortage, driving up the price of the coin.
Background:
Opportunity to buy ETH at a discount? Grayscale’s Ethereum Fund (ETHE) continues to narrow its discount. Lawyers expect the SEC to no longer consider ETH as a security.
Important signs: VanEck and Franklin Templeton’s Ethereum spot ETF have been listed on the DTCC’s pre-market list! ETH surges to $3,800.
The SEC’s decision on whether to approve an Ethereum spot ETF this week has become the most anticipated issue in the cryptocurrency market. With more and more signs emerging, investor sentiment is gradually rising:
Bloomberg ETF analyst has increased the probability of approval for the Ethereum spot ETF (19b-4 form) from 25% to 75%.
The latest list from the Depository Trust & Clearing Corporation (DTCC) shows that the Ethereum spot ETFs launched by asset management giants VanEck and Franklin Templeton have been included in the active and pre-issuance lists.
All six applicants for Ethereum spot ETFs have submitted revised 19b-4 documents, including VanEck, Fidelity, Franklin, Ark Invest, Grayscale, and Invesco Galaxy.
Will Ethereum face supply shortage?
In this context, Joseph Lubin, co-founder of Ethereum and CEO of Consensys, also predicts that if approved, Ethereum may face a supply shortage for the following three reasons:
First, Joseph Lubin stated:
Furthermore, on-chain data shows that over 27% of the total Ethereum supply has been staked on the Ethereum network.
Third, the continuous activity of the Ethereum DeFi ecosystem.
Lubin believes that the combined effect of these three reasons will further reduce the Ethereum supply. At the same time, he mentioned that since Ethereum’s market value is lower than that of Bitcoin, this will make the price of Ethereum more responsive to capital inflows, implying that it may be easier to drive up the price of ETH.
Currently, whether the Ethereum spot ETF will be approved by the SEC is still unknown. However, if it becomes a reality, it can be expected that there will be more institutional demand shifting towards Ethereum, and a surge similar to Bitcoin’s after its approval cannot be ruled out. However, it is worth noting that the volatility of ETH may be quite significant in the near future, so investors should exercise caution.
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