‘Interest in ETH to grow over time’

Trading for new SEC-approved spot Ethereum (ETH) ETFs scheduled to begin on July 23

The approval process required issuers to complete their S-1 filings by Wednesday, July 17, which would allow the ETFs to launch on July 23. These new financial products are expected to attract significant investment, with projections predicting inflows of up to $5 billion in the first six months and potentially as much as $20 billion in the first year.

According to a recent report from Bybit, market trends and trading signals across spot volume, futures, options, and perpetual contracts are showing an increasing bullish bias toward ETH over Bitcoin (BTC). This trend is reflected in the volatility premium ETH has maintained over Bitcoin despite recent market activity and sell-offs.

Update: Nate’s instincts were correct, heard the SEC finally got back to issuers today, asking them to return FINAL S-1s (including fees) on Wednesday and then request a TUESDAY 7/23 LAUNCH after the close on Monday. This was achieved without any unforeseen last minute issues, of course! https://t.co/D21FD9Qf94

— Eric Balchunas (@EricBalchunas) July 15, 2024

The report revealed a significant shift in investor confidence between Ethereum and Bitcoin.

“I expect interest in ETH to increase over time because more investors can access ETH,” Eugene Cheung, Head of Institutions at Bybit, told crypto.news in an interview.

Cheung noted the long-term upside potential of spot ETFs.

“In the short term, the market is pricing in an underreaction, but this is a bullish catalyst in the long term. ETH could also offer diversification benefits in the long term, given its different and broader use cases compared to BTC,” Cheung said.

Eight major issuers, including leading asset management firms, are set to launch Ethereum-based ETFs. The SEC’s preliminary approval of these products marks a significant advancement for the cryptocurrency industry following the successful launch of spot Bitcoin ETFs earlier this year.

The price of Ethereum responded positively to the news and has increased by more than 12% in the last five days. The investment flow from these ETFs is expected to influence the market dynamics of Ethereum.

Market effects and investor confidence

Market analysts suggest that the launch of spot Ethereum ETFs will encourage immediate investment and support long-term growth due to increased regulatory clarity and technological advancements in the Ethereum ecosystem.

“We have seen BTC ETFs being used as a base trade, with investors going long the ETF and shorting futures to capture funding rates,” Cheung said. “I think this trade could open up for ETH ETFs in the future as well.”

The ETH ETF is a win for cryptocurrencies as it integrates digital assets into traditional financial markets and sets a precedent for future innovations.