Ethereum ETF Approval Hopes Rise: Can ETH Replicate Bitcoin's Rally?

Ethereum ETF Approval Hopes Rise: Can ETH Replicate BTC's Rally?

With the U.S. Securities and Exchange Commission (SEC) recently signaling positive progress on spot Ethereum ETF approvals, the crypto market is once again focusing on this milestone event. Following the approval of Bitcoin spot ETFs in early 2024, which propelled BTC past $100,000, market expectations are high that an Ethereum ETF could provide similar upward momentum for ETH. This article explores the potential impact on ETH prices, drawing from SEC approval signals, institutional forecasts, market sentiment shifts, and the historical performance of BTC ETFs.

SEC Approval Signals: From Silence to Active Engagement

According to sources familiar with the matter, the SEC has recently engaged in formal discussions with multiple Ethereum ETF applicants, addressing product structure, custody arrangements, and market manipulation safeguards. This marks a stark contrast to the SEC's prolonged silence on Ethereum ETF applications in 2023. Although the SEC has not made a public statement, industry analysts believe this progress indicates regulators are seriously considering approving a spot Ethereum ETF. Previously, SEC Chair Gary Gensler emphasized in several public forums that Ethereum's regulatory classification (commodity or security) remains a key variable. However, with the growing maturity of the CME Ethereum futures market and the compliance experience gained from Bitcoin ETFs, the hurdles to Ethereum ETF approval are gradually diminishing.

Institutional Forecasts: Optimism Spreads

Multiple Wall Street institutions have raised their probability estimates for Ethereum ETF approval. According to Bloomberg analysts, the likelihood of a spot Ethereum ETF being approved by the end of 2024 has risen from 30% to approximately 60%. Additionally, asset management giants like Grayscale Investments and BlackRock have submitted or updated their Ethereum ETF applications, signaling institutional recognition of Ethereum's asset allocation value. Some analysts suggest that if an Ethereum ETF is approved, its first-year capital inflows could reach 30% to 50% of those seen with Bitcoin ETFs, largely due to Ethereum's unique ecosystem in decentralized finance (DeFi) and smart contracts.

Market Sentiment Shifts: From Waiting to Early Positioning

Against the backdrop of warming SEC signals, crypto market sentiment has turned markedly optimistic. According to CoinGecko data, Ethereum's open interest has hit multi-month highs, while the ETH/BTC exchange rate has seen a modest recovery, indicating that investors are reassessing Ethereum's relative value. On social media, discussions about Ethereum ETFs are heating up, with some traders even positioning in ETH options to bet on increased price volatility. However, the market must also be wary of the "buy the rumor, sell the news" risk—after the Bitcoin ETF approval, BTC prices experienced a short-term correction of about 10% before embarking on a long-term uptrend.

BTC ETF Historical Performance: Can the Rally Be Replicated?

Looking back at the market performance following the Bitcoin spot ETF approval, BTC prices climbed from around $40,000 to $60,000 within two months after the January 2024 approval, then underwent consolidation before eventually breaking through $100,000, driven by the halving event and sustained institutional inflows. This process demonstrates that ETF approval not only provides a compliant entry channel but also reinforces Bitcoin's narrative as "digital gold." If Ethereum follows a similar path, its price may face comparable short-term volatility, but the long-term trajectory will depend on Ethereum's own ecosystem development. Unlike Bitcoin, Ethereum's supply mechanisms (such as EIP-1559's burn mechanism) and staking yields could provide additional value support for ETH. According to Staking Rewards data, the current annualized staking yield for Ethereum is approximately 3.5%, which may attract yield-seeking ETF investors.

Potential Impact: Dual Catalysts for ETH Price and Ecosystem

If an Ethereum ETF is approved, its direct effect would be to lower the entry barrier for traditional investors and drive institutional capital inflows. Estimates suggest that the launch of an Ethereum ETF could increase ETH's market cap by 20% to 40% within a year, depending on the macroeconomic environment and market liquidity. Furthermore, the compliance aspect of an ETF could accelerate Ethereum's adoption in traditional finance, such as tokenized assets and cross-border payments. However, risks remain: the SEC may impose restrictions on Ethereum's staking functionality or require ETFs to exclude staking rewards, which could diminish its appeal. Additionally, regulatory policy uncertainty (e.g., policy shifts after the U.S. elections) remains a potential variable.

Risk Warning

The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile and uncertain, and the outcome of Ethereum ETF approvals, market reactions, and price trends are subject to significant variability. Investors should fully understand the associated risks and make decisions based on their own risk tolerance.