Ethereum ETF Approval in Q3 Could Trigger Crypto Bull Run: Analyst

The approval of U.S. spot ether exchange-traded funds (ETF) during the third quarter could further amplify positive momentum in crypto triggering a bull run, said a Bitfinex analyst in a note.

This anticipated regulatory green light could further enhance the positive momentum that digital assets have been experiencing recently.

The first-quarter economic activity suggests slowing momentum, which is fuelling expectations that the Federal Reserve could cut rates this year.

Bitfinex highlights investors’ appetite for riskier assets such as Bitcoin might fluctuate and translate into uneven flows into ETFs tracking these assets, potentially impacting investor sentiment.

Analysts at Bitfinex estimate Bitcoin could see tailwinds from the halving in April, as historical patterns show the start of a bull market 10-12 weeks after rewards for miners are decimated.

“A potential Ethereum ETF launch in Q3 could further amplify this positive momentum for crypto. Looking ahead to July, increased volatility is expected in both traditional and crypto markets due to regulatory developments and macroeconomic policies,” said Bitfinex.

The approval of spot Ether ETFs is expected to attract significant institutional investment. Many large financial institutions and asset managers have been hesitant to invest directly in crypto due to regulatory uncertainties and the complexities involved in holding digital assets.

However, a regulated ETF would provide a familiar and compliant vehicle for these entities to gain exposure to Ether. The note from the Bitfinex analyst emphasized that the approval could act as a major bullish signal for the crypto market. The approval of spot Ether ETFs could also lead to a surge in Ether’s price.

In June, the Securities and Exchange Commission (SEC) Chair Gary Gensler said that the progress of launching the first spot Ether exchange-traded funds (ETFs) is “going smoothly.”

More Volatility in Crypto Expected

Jag Kooner, head of Derivatives at Bitfinex, said looking ahead to July, market participants should watch for a comeback in volatility in traditional markets and crypto alike as additional, regulatory developments and macroeconomic policies will play a crucial role in shaping market dynamics. “Investors might anticipate further economic data releases and Fed policy updates, which could influence both traditional and crypto markets,” said Kooner.Another key point to note, said Kooner, is that the Fed Funds futures data suggests that the market is still expecting and pricing in two rate cuts in 2024. “The Fed’s statements and a possible continuation of a more hawkish stance are important factors to watch,” said Kooner.