The price of Ethereum (ETH), the second-largest cryptocurrency by market capitalization, could experience a significant surge if the U.S. Securities and Exchange Commission (SEC) give their approval for multiple futures exchange traded funds (ETFs) based on Ether.
The speculation has been gaining traction in the crypto market as the Wall Street Journal (WSJ) indicate that the SEC is considering the listing of several Ethereum futures ETFs simultaneously. That would be a historic moment for the crypto industry, marking the first time U.S. investors could access Ethereum-based ETFs.
These financial products would track ETH futures contracts, enabling individuals to buy or sell ETH at predetermined prices and dates in the future. One company seeking approval for an Ethereum futures ETF is Volatility Shares, intending to launch its product on October 12th.
Since July, there has been no request from the SEC asking Volatility Shares to withdraw its application—a positive sign hinting towards a potentially favorable outcome. However, it’s important to note that official approval or rejection of any Ethereum futures ETF by the SEC is yet to be confirmed.
Ethereum Futures ETFs Could Attract More Institutional Investors
The introduction of Ethereum futures ETFs in the U.S. could significantly impact the demand, supply, and price of ETH. A notable example is the historical rally seen in Bitcoin’s price after the introduction of Bitcoin futures in December 2017, which attracted more institutional investors to enter the market.
A similar scenario may unfold for Ethereum, as it would allow investors to gain exposure to ETH without directly purchasing or storing it. This increased accessibility could enhance liquidity and bolster ETH’s legitimacy as an investment asset across various sectors.
Although Ethereum currently stands around $1,668.03, below its previous peak of $4,362.35 in May 2021, news surrounding potential Ethereum futures ETFs has the potential to act as a strong bullish catalyst propelling ETH towards new highs.
However, investors must remain aware of associated risks and uncertainties related to investing in Ethereum futures ETFs and ETH itself. The actual impact these ETFs will have on ETH’s price depends on several factors like market sentiment, regulatory developments, launch dates, and their subsequent performance.
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