Ethereum (ETH) Price failed to achieve a significant rally after the project was approved by the Securities and Exchange Commission (SEC). Spot ETF Ethereum. This is undoubtedly surprising, given that the approval was supposed to trigger a massive price surge for the second-largest crypto token.
Why ETH price failed to recover
Ethereum price may have failed to rally because the crypto token was already embedded in news regarding potential approval. It should be noted that the price of ETH increased by almost 20% earlier this week when Bloomberg analysts Eric Balchunas And James Seyffart increased their chances of approval from 25% to 75%, suggesting that approval was almost likely.
So this could have turned out to be a typical “selling the news” event, with many traders currently making profits on their previous ETH investments. NewsBTC reported that Ethereum whales purchased over 110,000 ETH ($341 million) between May 19 and 20 as they positioned themselves ahead of any news regarding possible approval of these funds.
Meanwhile, historically speaking, this might have been expected from the price of ETH, given that Bitcoin (BTC) saw a significant decline after the Spot Bitcoin ETF approval.
However, it is worth mentioning that unlike Bitcoin ETFs, which began trading immediately, these Spot Ethereum ETFs I will not start trading just now. The SEC has only approved the exchange filings (19b-4s) and will still need to approve the registration filings (S-1) before these funds can begin trading.
The fact that these Ethereum ETFs will not start trading yet could be another reason why the ETH price has not reacted positively to this development. Thus, the approval of registration files, which may take weeks or months, could be necessary to trigger a new rally in favor of Ethereum and other altcoins by extension.
A key positive is that ETH is up over 28% in the last seven days, which is a big deal considering the crypto token has been a laggard for some time now and has not been successful to match other large-cap crypto tokens.
Another reason to be bullish on Ethereum
The approval of Spot Ethereum ETFs is a clear indication that the SEC does not consider ETH a securityunlike the previous one reports that the Commission may have had this belief for some time now.
TuongVy Le, general counsel at Digital Anchoragenoted in an X (formerly Twitter) job that funds whose assets consist of 40% or more of securities cannot register via an S-1 form but via the N-1A or N-2 form.
Therefore, if the SEC considered ETH to be a security, it would have rejected the S-1 filings made by the various fund issuers as black rock since these Ethereum ETF will hold ETH as their primary assets.
At the time of writing, ETH is trading at around $3,803, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
