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Ethereum Sentiment Hits Eight-Month High on ETH ETF Approval Hopes 

Published May 22, 2024 2:54 PM
Shraddha Sharma
Published May 22, 2024 2:54 PM

Key Takeaways

  • Ethereum’s bullish sentiment reaches an eight-month high according to Santiment data.
  • Reports note that the SEC nears potential approval of spot Ethereum ETFs.
  • Key players like Fidelity, VanEck, and Ark Investments have amended their ETF applications.

Ethereum, the second-largest cryptocurrency, is driving positive investor sentiment, reaching its highest point in eight months.

The surge comes on the anticipation that the US Securities and Exchange Commission (SEC) might approve the first spot Ethereum exchange-traded fund (ETF). Ether’s weekly charts remain positive with minor profit-taking on the daily timeframe.

Ethereum’s Bullish Sentiment Surges

According to crypto analysis from Santiment Ethereum’s sentiment among investors has hit its most bullish level since September 2023. The optimism is fueled by the SEC’s potential to approve the first set of spot Ethereum ETFs. 

ETH Sentiments Bullish, BTC Relatively Bearish | Source:Santiment
ETH Sentiments Bullish, BTC Relatively Bearish | Source:Santiment

According to a report by Fox News , the SEC may give a partial go-ahead to the Ethereum ETF by May 23.

Sources told Fox News that the decision follows recent court rulings and prior guidance on Ethereum futures ETFs. Therefore, the approval could allow nine issuers to offer Ethereum-backed funds.

Sources close to the Commission reportedly indicate that SEC Chairman Gary Gensler and his team are warming up to the idea, influenced by recent legal precedents. The SEC’s decision could approve applications filed by the CBOE exchange to list ETFs from firms like VanEck and Ark Investments.

Fox Business News reporter Charles Gasparino noted that the SEC approval would represent one of the biggest turnarounds after speculation that Ethereum might be classified as a security.

A Regulatory Turnaround on Applications

Bloomberg analyst James Seyffart reported that several potential Ethereum ETF issuers have amended their applications. Firms like Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, and Franklin have all made significant changes, primarily removing ETH staking and clarifying that their funds’ Ethereum cannot be staked.

In addition, Bloomberg analysts have increased the approval odds after admitting their misjudgment about the agency’s readiness for Ethereum ETFs.

But not all reactions have been positive. Economist Peter Schiff voiced concerns about the potential approval, suggesting that any investment in new Ethereum ETFs might come at the expense of existing Bitcoin ETFs.

Schiff’s argument  centers on the idea that investors interested in cryptocurrencies may not increase their overall allocation, but rather shift their investments within the market.

At the time of writing, Ethereum (ETH) is priced at under $4K, reflecting minor profit-taking over the last 24 hours.

Over the past week until May 22, Ethereum has seen a notable  25% increase, suggesting strong market momentum and investor confidence.Ethereum’s market capitalization is $442b at press time, positioning it for an upside trajectory.

Approval Odds Change ETH Price Trajectory

The heightened likelihood of the SEC approving Ethereum ETFs has boosted investor sentiment, making them more bullish than BTC. The anticipation is driving Ethereum prices upward, reflecting strong market optimism.

Despite some critics warning of potential market shifts from Bitcoin ETFs to Ethereum ETFs, the prevailing mood remains positive.

In contrast to Ethereum’s positive crowd sentiment, Bitcoin remains relatively bearish, suggesting that the king coin might be overlooked and potentially undervalued in the current market context.

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