Last week saw a significant shift in market sentiment towards Ethereum (ETH) after the SEC unexpectedly approved spot exchange-traded funds (ETFs), and market data suggests that Ethereum is heading higher soon, according to a report from the on-chain analysis firm Kaiko.
The SEC’s decision came by approving 19b-4 filings from major exchanges including NYSE, Cboe and Nasdaq.
With these approvals, the SEC implicitly stated that ETH (without cadastral signature) is a commodity and not a guarantee. It’s not just about access to ETH, but it has significant and potentially positive implications for how all similar tokens are regulated in the United States regarding trading, custody, transfer, etc.
The expectation of approval was hinted at earlier in the week when several exchanges modified their profiles to rule out stacking. The market reacted quickly, with ETH’s implied volatility jumping to the nearest expiry from less than 60% to nearly 90% within two days, before stabilizing by the end of the week.
The derivatives market echoed this shift in sentiment, with funding rates for Ethereum perpetual futures rising from a one-year low to a multi-month high within three days. Open interest also reached a record $11 billion, suggesting strong capital flows. Despite this, the ETH to BTC ratio showed a rise from 0.044 to 0.055, remaining below its February highs.
Moreover, Delta’s cumulative volume of Ethereum (CVD) revealed a broad-based rally, with strong net buying in both US and overseas spot markets starting May 21. This represents a change from the net selling previously recorded on overseas exchanges.
Ethereum records strong gains targeting the $4,000 level
The cryptocurrency economy had a good week full of gains, as the currency rose Bitcoin Ethereum jumped 27% last week. However, the biggest leader of the week was Pepe (PEPPER) which rose 78.5% over the seven days.
Ethereum is now targeting the $4,000 level, with the possibility of reaching all-time highs. “Ethereum has broken the falling wedge, turned key areas into support, and is now heading towards $4,000. New highs and records are on the horizon. This optimistic outlook is shared by many in the cryptocurrency community, who believe that Ethereum’s fundamentals and technical indicators are in line with a strong upward trajectory.
Factors Leading to Ethereum Price Rise
Several factors contribute to the recent rise in Ethereum prices. One of the most important of these factors is the growing interest in Ethereum’s financial products, such as the approval of Ethereum’s spot ETF fund in the United States. This development has attracted more institutional investors to the market, resulting in higher demand, and therefore the price of Ethereum.
Market sentiment around Ethereum has been very positive, supported by the increasing adoption of Decentralized Finance (DeFi) and Non-fungible Tokens (NFTs) on the Ethereum blockchain. In addition, institutional interest has risen, as financial institutions and large corporations have explored Ethereum-based solutions and investments. This influx of institutional capital provides a strong foundation for Ethereum price growth.
Current Market Performance
Ethereum has seen a 2.5% increase over the past 24 hours, trading at $3,959. This upward trend is a testament to the growing confidence in Ethereum’s long-term potential and ability to overcome recent market volatility.
Impact of SEC approval on Bitcoin and Ethereum funds
Find out how the US Securities and Exchange Commission’s approval of Bitcoin and Ethereum ETFs affects financial regulators and potential implications for the cryptocurrency market.
US Securities and Exchange Commission Approval of Bitcoin and Ethereum ETFs
The U.S. Securities and Exchange Commission (SEC) recently approved spot Bitcoin ETFs in January and Ethereum ETFs last week, triggering waves across the global financial landscape. This historic decision not only boosted the legitimacy of cryptocurrencies, but also set a precedent for other countries to consider similar regulatory moves.
The approval of these ETFs in the United States has put enormous pressure on South Korean financial regulators, specifically the Financial Services Commission (FSC) and the Financial Supervision Service (FSS). Despite the growing demand, both the FSC and the FSS have remained cautious, citing the Capital Markets Law, which states that ETFs should rely solely on real financial assets or securities.
Market feedback and expert opinions
Seoul-based cryptocurrency data provider Xangle founder noted that the SEC’s recent decision on Ethereum is expected to force regulators in South Korea to reassess their stance on digital assets. This sentiment was echoed by Jung Eui-jong, chairman of the Korean Shareholders Alliance, who stressed the critical importance of following U.S. leadership to prevent capital flight from traditional and digital asset investors.
Given the current trajectory, it seems inevitable that South Korea will eventually approve Bitcoin and Ethereum ETFs. This move will not only align South Korea with global financial trends but will also provide a safer and more regulated environment for cryptocurrency investments. Experts believe that such regulatory developments can significantly boost investor confidence and market stability.
