BlackRock Files Spot Ethereum ETF Application
BlackRock, a leading asset management firm, has filed an application for a spot Ethereum ETF. This move has shifted the focus to Ethereum, the second-largest cryptocurrency by market capitalization and the top smart contract platform.
The news of the filing sent the price of Ethereum soaring above $2,000, reaching a high near $2,136 overnight on the Coinbase exchange. Analysts described this surge as a ‘massive short squeeze’ and noted that market-neutral crypto hedge funds are profiting from the high funding rates.
Spot Ethereum ETF Benefits
If approved, a spot Ethereum ETF would provide a regulated and accessible investment option for institutions and consumers to participate in the ETH ecosystem. It would also allow for the staking of ETH, which could provide additional rewards. Diogo Mónica, co-founder and president of Anchorage Digital, believes that a spot Ether ETF would drive institutional demand for safe, secure, and regulated staking. This increased participation in Ethereum staking would improve the scalability and security of the network.
Crypto Market Surge
The filing of the spot Ethereum ETF comes as the trading volume for the crypto market surpassed $100 billion in the past 24 hours. Ether saw $44 billion worth of volume, while Bitcoin saw $35 billion in transactions. The total cryptocurrency market cap climbed above $1.5 trillion for the first time since May 2022.
Potential Gains Ahead
Analysts project further gains for Ethereum, with a trading model predicting a +39.8% upside over the next two months. Many believe that Ethereum is set to outperform Bitcoin, especially with the expected approval of a Bitcoin ETF. The approval of a Bitcoin ETF is seen as a significant driving force behind the momentum in the crypto market. Analysts estimate that a BlackRock Bitcoin ETF could lift prices by +48%.
While the approval for a spot Bitcoin ETF may still face some skepticism, the market pricing signals a high probability of approval. However, there will be a window of several weeks before the ETF starts trading, during which only buyers will be front-running the launch. This could lead to a major squeeze in the market.
Rising Momentum for Ethereum
With the SEC’s extension of the review process on the spot BTC ETF applications, the filing of a spot ETH ETF fills the momentum void. Analysts believe that this new narrative will fuel the crypto market’s animal spirits and drive prices higher. Additionally, improved macro conditions and support for risk assets are expected to keep crypto prices supported.
Ethereum’s Potential Targets
Crypto trader Jacob Canfield suggests that after testing resistance at $2,100, the next target for Ethereum could be around $3,000 in the coming weeks. This bullish outlook for Ethereum also presents potential gains for other altcoins closely tied to its rising momentum.