Ethereum ETF Approval Expectations Heat Up: Can ETH Follow BTC to Lead a New Rally?

Ethereum ETF Approval Expectations Heat Up: Can ETH Follow BTC to Lead a New Rally?

As Bitcoin broke through the $100,000 mark in 2024, the cryptocurrency market once again erupted in celebration. However, market attention is gradually shifting to the next potential catalyst—the approval progress of a spot Ethereum ETF. Recently, the U.S. Securities and Exchange Commission (SEC) has shown subtle changes in its stance on the Ethereum ETF, rapidly heating up market sentiment. This article analyzes the correlation between approval dynamics, market sentiment, and ETH price trends to assess whether Ethereum can follow Bitcoin and lead a new rally.

1. SEC Approval Dynamics: From Silence to Positive Signals

For a long time, the SEC has been conservative in its stance on approving an Ethereum ETF. However, a series of recent events suggest that regulators may be accelerating the process. According to sources familiar with the matter, the SEC has held multiple technical discussions with several applicants (such as BlackRock and Fidelity) regarding the details of an Ethereum ETF, covering key terms such as custody arrangements and market manipulation prevention mechanisms. Additionally, SEC Chair Gary Gensler has repeatedly mentioned "improving the regulatory framework for crypto assets" in public, though without directly naming Ethereum, the market widely interprets this as a positive signal.

Notably, the SEC has already approved a spot Bitcoin ETF, setting a precedent for the Ethereum ETF. According to a Federal Reserve statement, the regulatory logic for classifying and overseeing crypto assets is gradually becoming clearer. If Ethereum is classified as a commodity rather than a security, the obstacles to its ETF approval will significantly decrease. Currently, the market generally expects the SEC to make a final decision in the first quarter of 2025.

2. Market Sentiment: From Wait-and-See to Frenzy

The warming approval expectations are directly reflected in investor sentiment. According to CoinGecko data, search interest for Ethereum has surged over 200% in the past month, and social media discussions about "ETH ETF" have hit an all-time high. Options market data shows that Ethereum's implied volatility has risen significantly, with call option open interest surging, indicating that traders are betting on price increases.

In terms of capital flows, according to a CoinShares report, Ethereum investment products recorded net inflows of over $300 million in the latest week, the highest weekly level since 2024. This closely mirrors the capital inflow pattern before the Bitcoin ETF approval. Analysts point out that once the Ethereum ETF is officially approved, it could attract significant traditional institutional capital, pushing ETH prices to break historical highs.

3. Price Trends: ETH and BTC Correlation and Divergence

From historical data, Ethereum and Bitcoin price trends are highly correlated, but Ethereum typically exhibits greater volatility. During Bitcoin's rally above $100,000, the ETH/BTC exchange rate once fell below 0.03, indicating relative weakness in Ethereum. However, with the heating of ETF expectations, the ETH/BTC exchange rate has rebounded to around 0.04, suggesting that capital is shifting from Bitcoin to Ethereum.

From a technical perspective, Ethereum has formed strong support around the $3,000 level. If it breaks through the $4,000 resistance level, it could trigger a new rally. However, caution is warranted: if the SEC delays or rejects the approval, ETH prices could face a significant correction. According to TradingView data, Ethereum's RSI indicator has entered overbought territory, indicating a short-term need for technical correction.

4. Macro Environment and Ecosystem Development

Ethereum's long-term value depends not only on ETF approval but also on the prosperity of its ecosystem. After the Ethereum 2.0 upgrade, network performance has significantly improved, and the adoption rate of Layer 2 solutions (such as Arbitrum and Optimism) continues to grow. According to DefiLlama data, the total value locked (TVL) on the Ethereum chain has rebounded to over $80 billion, with new projects emerging in DeFi and NFT sectors.

Additionally, Ethereum's supply is decreasing due to the EIP-1559 mechanism, enhancing its deflationary properties. If ETF approval triggers a surge in demand, supply-demand imbalance could further push prices higher. However, the rise of competitors (such as Solana and Avalanche) could also divert some capital, requiring Ethereum to maintain its technological edge.

5. Conclusion: Follow-up or Catch-up Rally?

In summary, the expectation of Ethereum ETF approval is the core driver of recent market sentiment. If the SEC ultimately approves, ETH could replicate Bitcoin's "ETF rally," with short-term gains potentially exceeding those of Bitcoin. However, if approval is delayed or market expectations are overextended, ETH could face a "buy the rumor, sell the news" correction risk. In the long term, Ethereum's ecosystem value and technological upgrades provide fundamental support, but investors need to monitor regulatory developments and macroeconomic changes.

Risk Warning: The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile; invest with caution. Please make decisions based on your own risk tolerance and consult a professional financial advisor.