Some market observers believe that while ether spot-exchange traded funds (ETFs) may encourage institutional participation in Ethereum’s token, they are unlikely to result in significant price increases.
While interest in ether bets has increased dramatically, an ETF may result in sustainable growth rather than spectacular development in the ether market.
Some market observers believe that while Ether (ETH) spot-exchange traded funds (ETFs) may promote institutional investment and power the world’s most widely used blockchain, they are unlikely to result in euphoric price increases.
The launch of spot bitcoin (BTC) ETFs in January spurred a surge in ether bets, giving ether traders hope. Last week, Ethereum’s native token surpassed $3,000 for the first time since April 2022, climbing 15% in a week and outperforming bitcoin’s 8% gain during the same period.
Crypto circles on social media platform X predict such price activity to continue with the planned release of ether ETFs later this year. According to the narrative, these inflows may eventually make their way into the larger Ethereum ecosystem.
However, some argue that an ETF could result in long-term, rather than exponential, expansion in the ether market.
“Ethereum ETFs won’t cause bubbles.”
“Despite concerns, institutional investment through an ETF could stabilize the Ethereum market, as seen with bitcoin and gold ETFs, fostering sustained growth.”
“Ethereum’s Layer 2 solutions enhance scalability by enabling faster, cheaper transactions outside the main blockchain, fostering growth. Unlike bitcoin’s security focus, Ethereum’s L2 solutions prioritize rapid expansion, potentially attracting institutional investment and broadening application scope.”
Jag Kooners, Head of derivatives at Bitfinex
However, an ether ETF still faces regulatory headwinds. “Ether’s classification as a security or commodity remains a key hurdle despite ongoing regulatory discussions,” Kooners said.
Some traditional finance firms say there is a 50% chance of an ether ETF approval by May, as reported, with ether considered the “only digital asset other than bitcoin” to get spot ETF approval in the U.S.
