- The decline in ETH on-chain trading volume indicates that interest is waning ahead of the ETF ruling.
- A financial institution predicted a delay for Ethereum ETFs, but not a complete rejection.
Several big events are scheduled to take place by the end of May. But if there's one thing that the crypto community puts at the top of their game, it's the U.S. Securities and Exchange Commission's decision regarding the Ethereum slew. [ETH] ETF application.
ETF stands for Exchange Traded Fund. Unlike regular cryptocurrencies like ETH, Ethereum ETFs only expose investors to altcoins and do not directly own them.
However, whether this will happen remains a subject of great debate. For some, now that the SEC has given the green light to Bitcoin ETFs, they have no choice but to approve.
obstacles appear
But some believe recent developments indicate regulators do not share that view. One notable person who could potentially block the approval of an Ethereum ETF is Gary Gensler.
SEC Chairman Gensler has been publicly expressing his distaste for the cryptocurrency ecosystem for some time. Recently, the SEC sent his Well Notices to several companies, including Consensys.
A Wells Notice is a formal notice from the SEC written to inform the recipient that the SEC plans to take enforcement action against the recipient.
Consensys is a blockchain software company developed to be the knowledge center for Ethereum. Because of the company's ties to Ethereum, there is a possibility that the SEC will flatly deny the application.
However, JP Morgan had contradictory ideas. The company said it was unlikely to receive approval this month, but said it would not be rejected outright. It was explained as follows.
“The market does not expect approval before this month, as suggested by the deep discount to NAV by Grayscale Ethereum Trust ETHE.”
The SEC has a decision deadline of May 23-24. However, the broader market seemed skeptical that any good news would come from this development.
Interest in ETH decreases
This was evident in a series of leaks from Ethereum investment products reported by AMBCrypto. Regarding volume, we also evaluated on-chain volume.
As of this writing, its volume was 11.17 billion. This is a significant decrease from the peak in March. The decline in ETH volume indicates that market participants are losing interest in altcoins.
Source: Santiment
If the SEC approves an Ethereum ETF, the price of ETH could also be affected. At the time of writing, the price of ETH was $2,910. If given the green light, up to $3,500 in cryptocurrency could be transferred.
However, if this is not the case, a drop to $2,700 could become a reality. However, attention will be focused on his two main applications of VanEck and ARK.
Applicant closes loophole
Previously, joint applicants ARK and 21 Shares included staking in their Ethereum ETF application. But in an amended filing on May 10, they changed that.
The companies expected staking to be included, adding it as a feature in February. The rationale for this inclusion was that ETH could serve as part of the company's income.
However, the SEC still had no choice but to play it safe, as it still has questions about whether to classify cryptocurrencies as securities. However, this does not mean that the Ethereum ETF will be approved.
Meanwhile, JPMorgan also commented on the possibility of a delay.
The financial institution said a refusal could trigger a lawsuit, similar to how Grayscale took regulators to court before the Bitcoin ETF was approved.
read ethereum [ETH] Price prediction for 2024-2025
This is because Grayscale had also applied to convert the Ethereum Trust into an ETF. From a perspective,
“The template is likely to be similar to Bitcoin. Since a futures-based Ethereum ETF has already been approved, the SEC will face legal challenges (if it refuses to approve a Spot Ethereum ETF) and the final is likely to lose the case.”
Despite the expected ruling, the number of ETH holders is increasing. According to Santiment, the total number of participants holding ETH exceeded 12 million.
Source: Santiment
