ETH to reach new highs?

• ETH spot ETFs may be launched in July
   
• Open interest in ETH futures reaches $14.5 billion
   
• ETH spot ETFs' inflows may total $45 billion  

Ethereum consolidates around $3,370 as investors prepare for the actual launch of the first US ETH spot ETF.
 

In his commentary, Securities and Exchange Commission Chairman Gary Gensler stated that he does not know the timing, but “it is going smoothly”.

Recently updated S-1 forms by BlackRock, Grayscale, VanEck and Invesco may be one of the last steps before the actual launch of the instruments.

The first spot ETF on the second largest cryptocurrency may not only provide new retail investors with a convenient and liquid way to gain exposure to the cryptocurrency without having to buy and hold the underlying asset themselves but may also encourage institutional players to reallocate their assets between a spot ETF on ETH and the spot bitcoin ETF launched earlier this year.

However, the inability of ETH ETF issuers to generate income from staking could make investing in spot ETH ETFs on ether less attractive compared to buying the cryptocurrency outright.

Staking was believed to be a major stumbling block for the launch of ETH ETFs.

The heightened excitement around ETH is evident in ETH futures contracts, which had a cumulative open interest of $14.54 billion as of 06/25/2024. 
 

Some market participants estimate that inflows into recently approved spot ETFs could total as much as $45 billion.

Ether's growing appeal may be due to the popularity of its blockchain platform among developers. According to a report by Electric Capital, Ethereum has attracted more developers than all other blockchain platforms combined.

However, despite the positive outlook, ETH's growth could be significantly limited.

If US interest rates remain high for an extended period, it could scare investors away from risky assets such as cryptocurrencies.

At the Fed's press conference after the 12.06.2024, it was noted that the regulator expects only one rate cut in 2024 versus the three that were projected in March.

In addition, the recent launch of a similar product in Hong Kong has not shown much success. Thus, Ethereum accounts for about 15% of assets under management versus 85% for bitcoin ETFs.