Ethereum ETF Approval Hopes Surge: Can ETH Take the Lead from Bitcoin? In-Depth Analysis

With the successful launch of Bitcoin spot ETFs in the U.S. market in early 2024, triggering a flood of capital, the crypto market's focus is rapidly shifting to the next potential catalyst—Ethereum spot ETFs. Recently, multiple industry analysts and regulatory observers have noted that the U.S. Securities and Exchange Commission (SEC) may be subtly shifting its stance on Ethereum ETF applications, and the market's reassessment of approval odds is driving up ETH prices and DeFi ecosystem expectations.

I. From 'Impossible' to 'Possible': Catalysts for Probability Reassessment

For a long time, the market widely believed that spot Ethereum ETFs faced much higher approval hurdles than Bitcoin, primarily due to the SEC's debate over whether Ethereum is a 'security' and the lack of precedents like Bitcoin futures ETFs. However, a series of recent events are breaking the deadlock:

• Legal Precedent: In the lawsuit between Grayscale and the SEC, the court ruled that the SEC's denial of the Bitcoin spot ETF conversion was 'arbitrary and capricious,' providing legal support for other crypto asset ETF applications.
• Internal SEC Divergence: According to sources, SEC Chair Gary Gensler remains cautious about the crypto market, but some commissioners have begun pushing for substantive review of Ethereum ETF applications.
• Issuers Gear Up: Major asset managers including BlackRock and Fidelity have submitted or updated spot Ethereum ETF applications, explicitly classifying Ethereum as a 'commodity' in filings to avoid securities disputes.

According to Bloomberg analysts, the probability of a spot Ethereum ETF being approved by the end of 2024 has risen from below 30% to over 50%. This jump in probability has directly ignited market sentiment.

II. ETH Price: History Repeating or Independent Rally?

Before the Bitcoin spot ETF approval, BTC prices surged from around $25,000 to nearly $45,000 on expectations, and even broke through $100,000 after approval. The market widely expects Ethereum to follow a similar path of 'anticipation first, consolidation after approval.'

Recently, ETH prices have shown clear divergence: against Bitcoin's high-level consolidation, the ETH/BTC ratio has rebounded from around 0.05 to above 0.06, indicating capital rotation from Bitcoin to Ethereum. According to CoinGecko data, ETH has significantly outperformed BTC in the past month, sparking discussions on whether 'ETH can take the lead from BTC.'

However, analysts also point out that Ethereum's narrative differs fundamentally from Bitcoin's: Bitcoin ETF's core selling point is 'digital gold' and an inflation hedge, while Ethereum ETF focuses more on 'decentralized computing platform' and 'DeFi ecosystem value capture.' This means ETH's price drivers will be more complex—beyond ETF inflows, on-chain activity, gas fees, Layer2 developments, and other fundamentals are equally critical.

III. DeFi Ecosystem: The 'Butterfly Effect' of ETF Approval

If a spot Ethereum ETF is approved, its impact will extend far beyond ETH price, potentially providing a systemic boost to the entire DeFi ecosystem:

• Influx of Compliant Capital: ETFs offer traditional institutions compliant, convenient exposure to ETH. This capital may flow into DeFi protocols through staking, lending, etc., boosting Total Value Locked (TVL). According to DeFi Llama, Ethereum's on-chain TVL has rebounded from 2023 lows to around $50 billion, and ETF approval could accelerate this trend.
• Mainstreaming of DeFi: ETF approval would signal to traditional finance that 'Ethereum is a legitimate asset,' lowering trust barriers for DeFi protocols in compliance, custody, and auditing. For example, top protocols like Aave and Uniswap could attract more institutional liquidity providers.
• Staking Economy Expansion: Since Ethereum's transition to PoS, staking has become a core ecosystem activity. After ETF approval, institutions may earn yields by staking ETF shares or directly participating in on-chain staking, further strengthening Ethereum's security. Currently, over 30 million ETH are staked, about 25% of circulating supply.

However, the DeFi ecosystem also faces potential challenges: the 'passive investment' model brought by ETFs could reduce on-chain activity, as some users may shift from directly using DeFi to holding ETFs, temporarily pressuring on-chain transaction volumes and gas fees. In the long term, ETFs and DeFi are more likely to complement rather than replace each other.

IV. Risks and Uncertainties: The Regulatory Game Continues

Despite rising expectations, spot Ethereum ETF approval is not a done deal. Key risks include:

• SEC's 'Security' Classification: The SEC has treated ETH as a security in multiple enforcement actions. If this stance is upheld in court, ETF applications would face substantial obstacles.
• Market Manipulation Concerns: Compared to Bitcoin, Ethereum's spot market depth is relatively lower, and the SEC may impose higher requirements regarding price manipulation risks.
• Macroeconomic Headwinds: If the Fed maintains high interest rates or liquidity tightens, risk assets overall may face pressure, and short-term ETF inflows could fall short of expectations.

Additionally, the market must monitor Ethereum's own upgrade progress: the upcoming 'Cancun' upgrade's ability to effectively reduce Layer2 fees and increase network throughput will directly impact ETH's long-term value narrative.

V. Conclusion: Taking the Lead or Rotating?

The rising approval expectations for spot Ethereum ETFs are reshaping the market landscape. In the short term, ETH is likely to outperform BTC in 'expectation trading,' but whether it can truly 'take the lead' depends on two key variables: the timing and conditions of the SEC's final decision, and the pace of improvement in Ethereum's on-chain fundamentals. For investors, rather than betting on a single asset, it may be more prudent to focus on the structural opportunity of 'crypto asset mainstreaming' that ETF approval could trigger—from ETH to DeFi, from Layer2 to RWA (Real World Assets), the entire ecosystem could undergo value reassessment.

Risk Warning

The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile and uncertain. The outcome of spot Ethereum ETF approval, policy changes, and market sentiment can all lead to drastic price fluctuations. Investors should make independent decisions based on their own risk tolerance and ensure diversified asset allocation.