Ethereum’s value steadied on Tuesday following the SEC’s approval of spot ETFs by firms like BlackRock, Invesco, Bitwise, and Franklin Templeton. Why the price is in a consolidation phase remains under analysis.
Ethereum was trading at $3,500, maintaining the gains after a 25% increase from its month’s low.
SEC Approves Spot Ethereum ETFs
The SEC has greenlit spot Ethereum ETFs, expected to start trading today. This decision marks a significant shift, given the SEC’s historical stance on Ethereum’s classification as a security.
Among the approved ETFs are Grayscale’s ETH, Franklin Templeton’s EZET, VanEck’s ETHV, Fidelity’s FETH, and BlackRock’s ETHA. Most funds have no initial fee, with BlackRock’s ETHA at 0.12%.
Following this period, Grayscale’s ETH will be the most economical with a 0.15% expense ratio. Other affordable options include EZET (0.19%), ETHV (0.20%), and ETHW (0.20%).
Buy the Rumor, Sell the News
Ethereum’s price, theoretically, should be rising with this news. When Bitcoin’s spot ETFs were approved, the price surged from below $40,000 to a record $73,750.
However, Ethereum might face a decline post-approval due to market expectations. Ether’s 25% rise this year likely anticipated this event.
In market terms, this ‘buy the rumor, sell the news’ effect often causes an initial rise followed by a fall. Such phenomena happened with XRP in 2023 post-SEC’s lawsuit loss against Ripple.
Fortunately, Ethereum has formed a bullish flag chart pattern, indicating potential continuation. A breakthrough above $3,570 could confirm further upside.
Ethereum’s Strong Fundamentals
Ethereum’s fundamentals continue to be robust. Jay Jacobs, Blackrock’s Head of Research and Strategy, emphasized Ethereum’s utility in DeFi, metaverse, stablecoins, and NFTs. It holds over $79 billion in stablecoins and has accrued over $1.8 billion in fees this year.
Ethereum has also consistently outperformed Bitcoin, climbing 1,600% over the past five years versus Bitcoin’s 600% rise.
Investors in Bitcoin ETFs like Millenium Management, Susquehanna, and Apollo Global might diversify into these new ETFs. Ethereum’s decreasing exchange balances further signal strong fundamentals.
