- Ethereum ETFs expected to begin trading in July after Bitwise files amended S-1 ahead of due date.
- Ethereum ETFs could flip analysts' expectations if investors buy into ETH's Nvidia-like high-growth tech play narrative.
- Ethereum derivatives data reveals investors are becoming more risk averse following Mt. Gox headwind on horizon.
Ethereum (ETH) is down 3% on Wednesday following Bitwise filing an updated S-1 draft and a wider market downturn with potential Mt. Gox BTC supply flooding the market. Despite the general market lull, investors may gain consolation from Bitwise prediction that Ethereum ETFs could outperform analysts' expectations if positioned as a high-growth tech play similar to Nvidia.
Daily digest market movers: Could Ethereum be the next Nvidia?
Asset manager Bitwise filed its amended S-1 registration statement with the Securities and Exchange Commission (SEC) today ahead of its July 8 due date. The new filing added a fee waiver for up to $500 million in assets under management, similar to Van Eck's waiver last week.
Considering the comments on these drafts were light, Bloomberg analyst Eric Balchunas said spot ETH ETFs should have begun trading and expects them to launch before the end of July.
The SEC approved spot ETH ETF issuers' 19b-4 filings in May but also needs to greenlight their S-1 registration statements before the products can begin trading.
According to Bitwise CIO Matt Hougan, Ethereum ETFs could be more successful than earlier predicted if investors buy into the narrative that Ethereum is a high-growth tech play similar to Meta and Nvidia. Hougan had earlier predicted that spot ETH ETFs could attract up to $15 billion in net flows before the end of 2025.
"It's pretty easy for me to imagine investors selling a small amount of their tech exposure and adding ETH. I'd argue it's easier than imagining investors carving out an entirely separate portfolio sleeve for a new monetary asset," Hougan noted.
However, people need to buy into the idea that "Ethereum is a technology investment" for this to happen. Hougan noted that a clear understanding of how Ethereum differs from Bitcoin and the growth of applications on its network would help strengthen the “high-growth tech play” narrative.
"What might that look like? Imagine stablecoins going from $160 billion to $1.6 trillion in assets as more people embrace the speed and transparency of blockchain-enabled payments. Or consider decentralized finance applications opening up new avenues for lending and borrowing with the onset of regulatory clarity. Or imagine more firms following BlackRock's lead and building tokenized funds on the Ethereum platform," said Hougan.
Meanwhile, Lookonchain revealed in a recent analysis that Ethereum ranks number one among blockchain networks in terms of yearly revenue. Ethereum's revenue is at $2.728 billion per year, with Bitcoin coming behind at $1.302 billion. Increased revenue often indicates high user activity in a blockchain network, which helps estimate bullish sentiment.
ETH technical analysis: Ethereum traders are skeptical with Mt. Gox headwind in sight
Ethereum is trading around $3,307, down about 3% in the past 24 hours. ETH breached the $3,367 support level, pouring cold water on hopes of a potential rebound. ETH liquidations reached $44.33 million, equalling that of BTC in the past 24 hours despite having a lower market cap. Long liquidations accounted for 87% of ETH's total liquidations, with shorts at 13%.
Ethereum options open interest has declined by 57% since its spike following the SEC's approval of 19b-4 filings of spot ETH ETF issuers. As of May 24, ETH options OI was at $13.44 billion. However, following the expiry of May and June options, most investors have failed to open new positions as indicated in the chart below.
ETH options OI
ETH options OI is now at $5.69 billion, its lowest level since September. The decreasing options OI accompanied by ETH's price decline suggests option traders are more risk-averse. Two possible reasons for the uncertainty among traders include:
- SEC's delay in greenlighting prospective spot ETH ETF issuers’ S-1 drafts.
- Prevailing wider market bearish sentiment from Mt. Gox BTC supply.
The ETH Long/Short ratio also provides insights into traders' sentiment in the past week. The ratio's 7-day average is at 0.946, indicating the futures market is tilted toward the downside.
As a result, ETH may sustain a horizontal movement in the coming weeks until the SEC approves issuers' S-1 drafts for spot ETH ETFs to begin trading.
ETH/USDT 4-hour chart
A breach of the $3,203 support could strengthen bearish sentiment and send ETH back to the $2,850 to $3,029 range.
Ethereum FAQs
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.