Why did the Ethereum spot ETF pass but not see a big surge?

24-05-24 13:28
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At 5:00 a.m. Beijing time on May 24, the U.S. Securities and Exchange Commission approved the 19b-4 forms of multiple Ethereum spot ETFs, including those from BlackRock, Fidelity, and Grayscale. However, although the form has been approved, ETF issuers need to make the S-1 registration statement effective before they can start trading.

The Galaxy Digital report released earlier predicted that the Ethereum spot ETF may be listed on the exchange in July or August. James Seyffart, an ETF analyst at Bloomberg, recently said that it is also possible for the Ethereum spot ETF to be listed in mid-June.


The Ethereum spot ETF went from being unpopular and having a 7% approval rate to a 75% approval rate overnight, and the ETH price repeatedly broke through the $3,800 mark. Perhaps no one expected that the Ethereum ETF would be approved just over four months after the Bitcoin ETF was approved. Although the reasons for the sudden change in the wind direction are still controversial, market observers and senior cryptocurrency practitioners generally believe that the approval of regulators will have different degrees of impact on Ethereum and other cryptocurrencies.


After the Ethereum spot ETF was approved today, it only briefly broke through $3,900 at 5 a.m., and then the price remained at $3,700-3,850. Why did ETH not usher in the expected "big surge", what is the reason behind it? Let's listen to the analysis and opinions of the crypto KOLs:


BITWU.ETH (Crypto KOL)


Why did the Ethereum spot ETF not usher in a surge? I think many people don’t quite understand this question, so here’s a brief introduction to the difference between the two documents:


Last night, the U.S. SEC approved 19b-4 documents for eight Ethereum spot ETFs, a form used to notify the SEC of rule changes that allow ETFs to be traded on exchanges—such as introducing new products, modifying trading mechanisms, or other relevant exchange policies. Once submitted, the SEC will review the proposal and publicly solicit public comments before deciding whether to approve it.


However, the approval of the 19b-4 document does not mean that the ETF has been approved. Formal listing requires the ETF issuer to obtain the S-1 document approved by the SEC.


The S-1 document is a registration statement submitted by a company to the SEC for an initial public offering (IPO) or other securities offering, including the listing of an ETF.


The S-1 filing is not the last step, but it is a very critical step under the supervision of the US SEC!


Only after the SEC completes its review and approves the S-1 filing, the S-1 filing will take effect, and fund managers can continue to prepare for the official listing of the ETF, including determining the listing date and marketing.


In general, the passage of 19b-4 means that this thing is possible; after the passage of S-1, it is considered a done deal. At present, this process takes about weeks to months, so the price will not soar in a short period of time.


Plus, multiple spot Ethereum ETFs have been listed on the DTCC website, and it is likely that this is the script for the #Bitcoin spot ETF!



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Fiona (Crypto KOL)


ETH ETF has suddenly turned so big, the Democratic Party has made great efforts, and it will be too late if they don’t make efforts in the upcoming election.


From the one-sided situation of the Democratic Party in the House of Representatives voting FIT21, we can also see that the people at the top have made efforts!


Today, I thought that the most direct benefit of ETF is ETH itself, followed by POS ETH. If there is an ETF, then the next $SOL will also have a chance.



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Chain Research Society (Crypto KOL):


SEC approved 8 spot Ethereum ETFs at one time, including ETFs from BlackRock, Fidelity and Grayscale. Although the form has been approved.


However, the listing transaction still requires approval of the issuer's planned S-1 form, which is expected to be completed in a few weeks to 3 months.


Unlike the previous prediction, the SEC passed it all at once, rather than approving only one, which means that this time ETH will still experience Grayscale's Ethereum selling pressure, which is about 10 billion US dollars.


Grayscale's GBTC had a selling pressure of 21 billion US dollars at the time, ETHE's holdings were less than 10 billion US dollars, and the inflow of Bitcoin spot ETF on the first day of listing was 300 million US dollars. How much money will Ethereum spot ETF have inflow? After Grayscale starts redemption, ETH's own buying may not be able to withstand such a large selling pressure.


So I will choose to stop profit and switch most of the $ETH positions to BTC, BNB, and SOL before the transaction is officially launched.


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Kay Capital (Crypto KOL)


What will happen if ETH ETF is approved?


ETH's ancient giant bull.


Before BTC ETF was approved, the entire market was facing the approval of ETF for the first time, and there were three scenarios in general:


1. As in history, the top is reached when a major event is implemented (short-term short)
2. Small steps and slow bulls brought by ETF Inflow (long)
3. ETF becomes a Blur, providing unprecedented liquidity and shipping opportunities for early whales, especially GBTC (long-term short)


Expectations were very inconsistent, resulting in a drop of about 20%, followed by a bull market that almost doubled from 38,000.


If ETH ETF is approved, most people's expectations must be to imitate the BTC ETF's first drop and then rise, so the high probability is to front-run this expectation. That is, pull it up directly.


1. ETH's increase in this round is not much. The expectation that ETH ETF may be accelerated through only appeared this week, and the increase is only 20%, which is far less than the one-fold increase of BTC.

2. ETH's price has been suppressed for too long this round, and the exchange rate is in the historically dense trading area
3. If it passes, will the traditional ETH chain activity of the wool-knowing people be less active? Is there a lack of legendary narrative in this round of wool-knowing people?
4. ETHE is far less than the selling pressure of GBTC


Current macro situation:


1. The four major US stock indexes are in a long position
2. Nvidia's earning call exceeded expectations and split stocks
3. VIX fell to a one-year low, and it is difficult for the US dollar and US bonds to continue to strengthen in the short term
4. The passage of the FIT21 bill and election donations are needed


That is to say, the direction of least resistance in the market is ETH, which is upward! We must learn to: play by the seat of the pants!


This is our front-run for traditional stupid money, cherish the opportunity.


What will happen to other coins?


In the previous "Crypto Industry, What is the Next Big Catalyst? 》 I shared: "Only if the US ETH ETF is approved, it can bring a carnival exclusive to the cryptocurrency circle, an epic copycat season, and countless dumb money and euphoric times. It's a very simple logic. The approval of the Shitcoin ETF is like domestic violence/women's clothing/prostate massage, there are only 0 times and countless times." Once the ETH ETF is approved, people will start to fantasize about the approval of the SOL/AVAX/PEPE/DOGE ETF. Even if SOL has been designated as a security by the SEC, it doesn't matter. It's enough to have emotions and momentum. Operate according to cognition. If you predict it, you must integrate knowledge and action. Position related 70% ETH, 30% PEPE, ready to welcome the long bull market.

Former Japanese Prime Minister Shinzo Abe met with Hillary Clinton in advance before the 2016 US presidential election, but after President Trump was elected, Abe's attitude changed 180 degrees and he immediately flew to the United States to meet with President Trump, and quoted the Book of Changes: "A great man changes like a tiger, a gentleman changes like a leopard" to respond to the outside world's change of attitude towards him.


Major countries grasp the changes in the situation, just as the stripes of a tiger change with the seasons, and other countries should also be like leopards, perceive the changes in the situation and make adjustments, so that they can survive in the treacherous and ever-changing international political and economic situation.


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Dovey Wan (Founder of Primitive Ventures):


Short term:


ETF approved with diminishing marginal pumpability +11B total ETHE plus 2.5% fees and (hidden costs of missing out on staking rewards)


Long term:


We will start to see more and more ETFs and other structures come to market, BlackRock and similar institutions issuing crypto index products, imagine a hybrid S&P500 95% BTC 5% index ETF or 50% gold 50% BTCETF or 50% FAANG 50 hybrid BTC/ETH/SOL coins, more accessible to the average person, people actually click a button and buy from their 401k.


Long term I think it will take multiple cycles, just like CME futures launched in the 2017 bull run, but only surpassed Binance futures in volume in this bull run.


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