Crypto prices spike as focus turns to ethereum ETF | CPT PPP Coverage

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The US regulator has set a May 23 date for its decision on whether the likes of Grayscale, VanEck and Fidelity can also offer ETFs that are linked to the ethereum price to retail investors, Mr Galvin added.

Ethereum pared gains to trade around $US2588 on Thursday, while bitcoin was steady at around $US46,189.

“We’ve seen a muted reaction to the acceptance so far given the general expectation that the SEC would issue an approval after a decade-long campaign,” said Josh Gilbert, a market analyst at eToro.

“[There has been] a positive price action from ethereum, the next crypto likely in line for a spot ETF. Ethereum is now playing catch-up after underperforming bitcoin in 2023.”

Bitcoin, which has soared 166 per cent over the past 12 months, accounts for the lion’s share of the $US1.3 trillion ($1.9 trillion) cryptocurrency ecosystem with a $US915 billion market capitalisation.

“Even if 1 per cent of that is reallocated across the rest of the crypto market, we’re talking about $US9 billion of flows, which is going to push other coins higher,” Mr Galvin said.

After tumbling 64 per cent in 2022, investors last year snapped up bitcoin ahead of the SEC’s ETF approval and the next so-called halving event in April which caps supply at 21 million tokens. The world’s largest digital currency hit a record after each of the last three events in 2023.

Expectations of central banks kicking off a round of interest rate cuts later this year has also boosted demand for risk assets including cryptocurrencies.

In the short term, however, with much of the news already baked into bitcoin’s price, attention will switch to investor inflows into the ETFs which Standard Chartered predicts will be between $US50 billion to $US100 billion this year.

“The anticipated flows into US-traded spot bitcoin ETFs in the initial days after launch are expected to be significant and would serve as an endorsement of the global investor preference for ETFs over other investing structures,” said Justin Arzadon, head of digital assets at Betashares.

Bloomberg crypto analysts estimate that the first US spot Bitcoin ETF will launch on Thursday, with assets under management likely to surpass $US30 billion on the first day of trading.

Grayscale Bitcoin Trust conversion will bring in $US28 billion in assets while BlackRock could start with $2 billion, according to Bloomberg.

“While regulators in many countries have approved spot bitcoin ETFs, including Australia, none are bigger than the US,” Mr Arzadon added.

“The SEC’s approval of spot bitcoin ETFs should add further confidence to the digital asset ecosystem and could pave the way for Wall Street to move deeper into cryptocurrencies as an asset class.”