Ethereum Price Spikes on High Likelihood of ETF Approval

Just as the possibility of an Ethereum ETF approval before the election seemed bleak, a rumor of the SEC reversing its stance on the matter sent shockwaves through the markets, underscoring the significance of this development.

What happened: On Monday, the SEC abruptly asked exchanges to update their amended filings “on an accelerated basis.” The news came as a complete surprise to both asset managers and investors, leading Bloomberg ETF analysts @EricBalchunas and @JSeyff to increase their odds of approval from 25% to 75%.

Around the same time, the world’s largest predictions market saw a jump in odds from 10% to 69%.

And that's just about when the market went gangbusters…

ETH has itself a day: On the news, ETH prices skyrocketed, smashing short sellers on the way up while earning its largest daily price candle in history (16.7%), moving from $3,143 to $3,665.

On the SEC pivot: You may be wondering why the SEC is making a sudden pivot just days before the deadline. And the answer is as clear as day: It’s all political. It’s to sway votes.

As we wrote last week, crypto has become one big political issue, thanks to Trump taking a pro-crypto stance on the heels of the Biden admin going full anti-crypto. The SEC's sudden pivot is a last-ditch effort from Team Biden to appeal to crypto enthusiasts like us.

What's next? Revisions will likely delay the approval, but the chances of an eventual launch are looking better by the day. The first step is approving all 19b-4s19b-4s (where we're at now), and then comes the S-1s.

ETH prices aren't even close to being priced in if the approval goes through. 

We just saw a huge pump, but inflows from institutions hauling in an asset that is technically now deflationary should have a larger impact.

Plus, The ETH/BTC ratio is still in the red YTD, Vitalik is still building furiously, and Vaneck just put an $11.8k price target on the asset.

Like BTC, will ETH prices pop after an "official" approval? Our assumption is yes.

Will ETH prices pop after the "official" launch? I'm not quite sure, but thanks to what we learned from bitcoin ETFs, we now know it will largely depend on inflow data. There's also a chance we'll see investors rotating out of Grayscale's ETHE, which could limit the initial upside.

Either way, it's hard not to be bullish on Ethereum right now.

Perhaps more importantly, the SEC's pivot has opened a new door for investors…

Seeing both sides of the political spectrum (all sides if you include RFK) taking action to finally appeal to Americans with crypto is refreshing. A political race to greenlight crypto and provide desperately needed regulatory clarity is now an emerging narrative that shouldn't be overlooked.