Capital’s Andrew Kang has forecasted a 30% drop in Ethereum’s value following the launch of its newly approved Spot ETH ETF, potentially bringing its price down to $2,400. This prediction comes as the cryptocurrency market eagerly awaits VanEck’s impending launch of a Spot Ethereum ETF, spurred by the recent 8-A filing. Consequently, many investors have preemptively bought into Ethereum, anticipating a rise similar to that experienced by Bitcoin during its ETF debut.
Andrew Kang Casts Doubt on Ethereum ETF Impact
However, only some people are optimistic about the potential impact of the new ETF. Andrew Kang, Managing Partner at Mechanism Capital, shared his reservations on social media, suggesting that the benefits of the Ethereum ETF might already be reflected in its current price levels. In his analysis, he argues that the Ethereum ETF might only provide significant price benefits by substantially improving Ethereum’s economic model.
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Kang analyzed the Spot Bitcoin ETF and noted that only some recorded inflows were direct investments. He attributed a portion to the “basis trade,” with substantially lower new inflows. Contrary to more optimistic forecasts, he predicts the Ethereum ETF could see about $0.84 billion in inflows. His analysis suggests that external factors, rather than direct ETF purchases, were pivotal in previous Bitcoin price surges.
— Andrew Kang (@Rewkang) June 23, 2024
Realistic Expectations for Ethereum’s Market Impact
Kang also critiques the heightened expectations within the crypto community, pointing out that Ethereum might hold less allure outside hardcore crypto circles. Despite this, he does not dismiss the broader market dynamics, conceding that a significant rally in Bitcoin could indirectly boost Ethereum’s value to new highs.
This tempered view starkly contrasts the general market excitement and serves as a reminder of the complex factors in cryptocurrency pricing and investment. As the market evolves, the launch of the Ethereum ETF will test these theories, potentially reshaping investor approaches to both Ethereum and the broader crypto ecosystem.
SEC Greenlights Ethereum ETFs After Key Ruling
The SEC has wrapped up its examination of Ethereum 2.0, confirming that it will not be classified as a security. This crucial decision solidifies Ethereum’s regulatory status and could significantly influence its market perception and legality.
Makes sense. What I heard: issuers still waiting to get comments from Corp Fin on S-1s which they handed in 2wks ago. Corp Fin is just looking at these docs for first time (why? bc of the (highly likely) political last min 180 (remember they were as surprised by this as anyone… https://t.co/N32N6jFXBv
— Eric Balchunas (@EricBalchunas) June 13, 2024
Promptly after the verdict, the SEC authorized the launch of eight spot Ethereum ETFs, set for July 2024. and are expected to draw substantial institutional investments, potentially boosting Ethereum’s market position and contributing to the growth of its ecosystem. This move signifies a significant step forward in integrating Ethereum into mainstream financial portfolios.
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