Title: Ethereum Surges to $5,000? Experts Predict Impact of ETF Approval on Prices
Author: Eric Johansson, DL News
Translation: Ismay, BlockBeats
Editor’s Note: With the approval of the Ethereum ETF in the United States, the market’s enthusiasm for Ethereum is soaring. Industry experts predict a new round of price increases for Ethereum, driven by demand from institutional investors. However, they also warn of potential market challenges and volatility. This article gathers different perspectives to explore the future prospects of this important market trend.
In May, Ethereum surged over 30% to reach $3,800 following the approval of the ETF in the United States. Market observers now expect Ethereum to reach a new high of over $5,000 in early June. As the dust settles, the market is speculating on Ethereum’s next move.
Here are the experts’ opinions:
Galaxy
Mike Novogratz, CEO of Galaxy, states that the “broad” transformation in Washington has caused the SEC to change its attitude towards the Ethereum ETF. If the SEC’s change in attitude is politically motivated, “it would be a major shift,” and prices would likely be much higher than they are now.
However, since making these comments, President Joe Biden has fulfilled his threat to veto the bipartisan-supported pro-cryptocurrency bill.
FRNT Financial
David Brickell, Head of International Distribution at FRNT Financial, believes that Bitcoin and Ethereum will reach new all-time highs by the end of June. He states that the approval of the Ethereum ETF, along with a more positive economic outlook and a series of cryptocurrency-friendly votes on Capitol Hill, indicates that these two leading cryptocurrencies will enjoy strong tailwinds in the coming weeks. “I wouldn’t be surprised to see Bitcoin at $80,000 and Ethereum at $5,000.”
CCData
Jacob Joseph, a research analyst at cryptocurrency data company CCData, not only predicts that Ethereum will set new records but also expects investors to pour $3.9 billion into the US Ethereum ETF within the first 100 days of its launch. He arrived at this figure based on the performance of the top 10 Bitcoin ETFs in their first 100 days.
However, he warns that Ethereum may face challenges from outflows from the Grayscale Ethereum Trust, which could dampen market sentiment. According to BitMEX research, the Grayscale Bitcoin Trust has seen outflows of over $17.7 billion since its launch in January, with the funds primarily flowing into lower-cost funds.
OKX
Lennix Lai, Global Chief Business Officer of OKX, predicts that the launch of the US Ethereum ETF will trigger a new wave of institutional investor demand. He suggests that they could invest $500 million into the Ethereum ETF in the first week. “This may be as important as, if not more important than, the approval of the Bitcoin ETF.”
TzTok-Chad
The growing optimism in the industry has led traders to invest approximately $3.4 billion in bullish options, betting that Ethereum will surpass $4,000 by June 28. TzTok-Chad, the anonymous founder of decentralized options exchange Stryke, states that the positioning in the derivatives market indicates that many traders are even targeting prices above $5,000.
However, he warns that the road to a new record won’t be smooth and expects some volatility.
Consensys
Joe Lubin, the founder of Consensys and co-founder of Ethereum, believes that there will be a “flood-like” surge in demand for Ethereum, leading to supply shortages and driving up prices. Lubin suggests that institutions already involved in Bitcoin ETFs are “likely to diversify their investments into the second approved ETF.” He states, “The natural and long-suppressed demand for purchasing Ethereum through ETFs will be significant, but the supply to meet this demand will be less than when the spot Bitcoin ETF was approved in January.”
Bernstein
Gautam Chhugani and Mahika Sapra, analysts at Bernstein, state that we should not expect the inflow of funds into the Ethereum ETF to reach the level of Bitcoin funds. In their June 3 report, they suggest that the ETF represents an opportunity to capitalize on the “pent-up demand from the same participants as Bitcoin ETFs, which may result in a lower allocation to Ethereum.” They believe that Ethereum will see positive price performance when the ETF is launched, expected to be sometime in the next few days or this month, given Ethereum’s supply situation (staking, smart contracts, holding data).
Kaiko
Adam McCarthy, an analyst at Kaiko, states that traders focusing on call options are now seeing profits. However, he warns that the Hong Kong ETF hasn’t seen significant demand and has experienced several days of net outflows. He also highlights the lack of staking as an important factor that could further impact demand. McCarthy suggests keeping an eye on Grayscale’s ETHE product, which is valued at $9 billion. “If there is a significant outflow of funds, it will have a major impact on the price.”
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