The crypto community is filled with speculation and expectancies as the SEC speeds up the review of Spot Ethereum ETFs. We explained how the approval of Ethereum ETFs would greatly impact Ethereum and the wider crypto market.
In May, the crypto market priced in denial and even the possibility of Ethereum being labeled a security. However, the odds have changed with the speculation of ETH ETF approval. Bitcoin Price surged above $70k, while Ethereum saw a double-digit rally, surging above $3500.
The Ethereum ETF approval odds have significantly increased, with Bloomberg analysts Eric Balchunas and James Seyffart boosting their probability estimate from 25% to 75% in the final hour.
Ethereum ETF’s Impact on ETH and Altcoins
The ETF approval can significantly impact ETH’s Price; while Bitcoin’s market capitalization is $1.3 trillion, Ethereum’s is just $376 billion, making it much easier for Ethereum to surge in price. Additionally, there isn’t that much ETH available to buy; the current supply on exchanges is at an all-time low of just 9.9% of the total supply.
Unlike Bitcoin, Ethereum has no miners, adding supply to the market. Since the Ethereum network transitioned to a proof-of-stake mechanism, ETH has been deflationary, reducing the supply. Many people hold ETH in different ways, such as staking, farming, using it as collateral, or for decentralized finance (DeFi) activities.
Because of these factors, very little ETH can be easily bought to meet the potential demand from traditional finance (tradfi) investors. Even if the inflows into ETH are not huge, they will still greatly impact its price.
Additionally, the approval of an ETF and the surge in ETH’s Price can Fuel a Major altcoin rally. Solana, Avalanche, and many Layer-2 altcoins will see a major rally in the coming days.
Also Check Out : Ethereum Surges Over 20% as Rounds of Spot ETF Approval Loom Over the Market: Is a New ATH on its Way?
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