Traders are expressing doubts about the potential decline in the price of Ether (ETH) following the introduction of spot Ether exchange-traded funds (ETFs), similar to what happened with Bitcoin (BTC) when spot Bitcoin ETFs were launched.
In a recent post on X, crypto trader Matthew Hyland explained his skepticism, stating that he believes there is a lower chance of a selloff after the introduction of an ETH ETF compared to the BTC ETF. Hyland pointed out that Bitcoin did not experience a price decline leading up to the approval of spot Bitcoin ETFs, unlike Ether. He added that selling pressure began when the Grayscale ETF was listed the day after the BTC ETF, resulting in the shedding of $17.6 billion in assets for Grayscale Bitcoin Trust (GBTC), according to Farside data.
By May 20, Ether had already declined by 15% over two months. However, the price surged by 29% shortly after reports suggested a possible pivot in the SEC’s stance on ETF approvals. At the time of publication, Ether is trading at $3,752 according to CoinMarketCap.
Despite the positive news of spot Ether ETF approvals, there have been concerns about Grayscale’s plan to convert its Grayscale Ethereum Trust (ETHE) to an ETF, which could potentially lead to selling pressure and price impact. Hyland emphasized the similarity between the BTC and ETH ETFs, noting that both have a Grayscale product and suggesting that the ETH ETF may face similar selling pressure once it is listed.
Hyland predicted upward momentum for Ether’s price, citing the “local highs” of $4,092 in March of this year. These highs were reached without the positive news of spot Ether ETF approval. However, ETF analyst Eric Balchunas lowered his approval hopes for spot Ether ETFs to 25%.
Meanwhile, Michaël van de Poppe, founder of MN trading consultancy, echoed the sentiment of uncertainty until the spot Ether ETFs start trading. He stated that it is a waiting game until the listing takes place and that the inflow of trading will determine whether there will be a strong continuation upwards.
In a recent article, Cointelegraph reported on the widespread commentary about the lack of movement in Ether’s price following the approval of spot Ether ETFs by the SEC. Independent Ethereum educator Sassal argued that ETH is undervalued and that the market has had only three days to “price in the ETF approval.”