Ether sets sights on record highs amid US ETF buzz

Investor optimism for Ether is growing following a surprising shift in US regulatory stance towards approving exchange-traded funds (ETFs) for the digital asset, despite uncertainties regarding demand for such products, Bloomberg reported on Monday.

The move by the US Securities and Exchange Commission (SEC) triggered a 26 per cent surge in Ether over the past seven days, marking its largest weekly gain since the 2021 crypto bull market, as per Bloomberg data.

The recent success of US spot-Bitcoin ETFs, which have accumulated $59 billion in assets since their record-breaking January debut, may have emboldened speculators. However, Ether’s lesser recognition compared to Bitcoin complicates the assessment of investor interest in ETF exposure.

Spot-Ether ETFs will not participate in staking, a factor that could dampen enthusiasm for the funds compared to holding actual tokens. Moreover, further SEC approvals are necessary before major issuers like BlackRock Inc. and Fidelity Investments can launch products, with the timeline remaining uncertain.

As of Monday morning in London, Ether was trading around $3,900, up about 1 per cent, while Bitcoin remained relatively stable at $68,500.

According to Chris Weston, Head of Research at Pepperstone Group, the risk in Ether continues to favour the upside, presenting buying opportunities during pullbacks.

Analysts observe bullish options bets suggesting that Ether could reach $5,000 or higher, based on data from the Deribit trading platform. The current spot-ether record stands at $4,866 as of November 2021.

The gap between the T3 Ether Volatility Index and its Bitcoin counterpart indicates that speculators anticipate larger price swings in Ether compared to Bitcoin, hinting at heightened volatility.

However, the level of institutional engagement with Ether futures hosted by CME Group Inc. remains lower than that of CME Bitcoin futures, suggesting potentially lower initial inflows into Ether ETFs upon launch.