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Time to Buy Ether ETFs on Approval Rally Hopes?

Yashwardhan Jain
·3-min read

Following the SEC's feedback on the S-1 forms and requests for resubmissions, the launch date for spot Ether ETFs has potentially been postponed to mid or even late July. The approval will mark a significant milestone in the evolving landscape of cryptocurrencies, affecting the entire cryptocurrency market as well as Ethereum.

According to Rob Nelson, Roundtable anchor, as quoted on Yahoo Finance, a positive approval by the SEC could pave the way for digital assets to be more widely accepted.

Rising Investor Confidence

According to a recent survey, as per cointribune, the popularity of Ether ETFs among Americans is growing, with its launch driving investments in digital currencies. About 33% of participants have become more accepting of the digital asset since the beginning of 2024, with nearly 47% of participants expecting that the asset will constitute a part of their portfolio.

Analysts anticipate a significant capital inflow, reaching up to $15 billion in the first few months. Driven by increasing interest in emerging technologies and expectations for clear regulation, the future of Ether ETFs looks promising.

Rate Cut by Fed to Boost Ether’s Prospects

With increasing expectations of an interest rate cut by the Fed cuts rates in late 2024, investors may view cryptocurrencies as an alternative to the depreciating dollar, which moves inversely with interest rate adjustments by the Fed. This indicates positive signs for Ether, creating more investment opportunities in digital currencies.

Moreover, any Fed rate cut would boost risk-on sentiments. Coupled with the approval of spot Ether ETFs, this combination is forecast to support the rise in digital asset prices.

Making Sense of Current Price Fluctuations

During the past week, Ether has declined by approximately 12%. This decline may signal a negative trend in the crypto market, raising questions about whether the approval of spot Ether ETFs could provide a significant boost.

However, a similar trend was showcased by Bitcoin prior to obtaining approval for spot ETFs. Bitcoin fell about 8.6% a few days before getting approval on Jan 10, followed by an additional drop of 8.5% post-approval. Following the decline, the cryptocurrency has since surged a significant 44% despite the recent fluctuations in the digital asset market.

This trend paints a promising picture for Ether's future, suggesting potential surges and an encouraging outlook for both the short and long term.

ETFs in Focus

Below, we highlight a few ETFs with heavy exposure to Ether, presenting a chance for investors to bolster their portfolios with the cryptocurrency, which has surged about 30% year to date. These ETFs offer a way to profit from future market moves as approval by the SEC becomes imminent.

ProShares Ether Strategy ETF (EETH)

ProShares Ether Strategy ETF employs an active strategy and has amassed an asset base of $99.4 million. The fund charges an annual fee of 0.95% and has a dividend yield of 10.75%.

ProShares Ether Strategy ETF has gained 39.58% year to date but has fallen 11.46% over the past three months.

VanEck Ethereum Strategy ETF (EFUT)

VanEck Ethereum Strategy ETF employs an active strategy and has gathered an asset base of $28.5 million. The fund charges an annual fee of 0.66% and has a dividend yield of 5.13%.

VanEck Ethereum Strategy ETF has gained 32.65% year to date but has fallen 9.07% over the past three months.

Bitwise Ethereum Strategy ETF (AETH)

Bitwise Ethereum Strategy ETF employs an active strategy and has gathered an asset base of $12.8 million. The fund charges an annual fee of 0.85% and has a dividend yield of 5.50%.

Bitwise Ethereum Strategy ETF has gained 36.33% year to date but has fallen 11.33% over the past three months.

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Bitwise Ethereum Strategy ETF (AETH): ETF Research Reports

ProShares Ether Strategy ETF (EETH): ETF Research Reports

VanEck Ethereum Strategy ETF (EFUT): ETF Research Reports

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