Altcoins
Ethereum ETF Anticipation Triggers Supply Crush, Fueling Altcoin Price Surge and Optimism
The cryptocurrency market is experiencing significant development, marked by notable trends in the supply dynamics of the main digital assets. Ethereum, the second largest cryptocurrency by market capitalization, is attracting a lot of attention due to a sharp drop in its stock offering, now at its lowest level since late 2020. This trend is sparking widespread speculation among Investors.
Derek, crypto analyst underlines that this reduction in Ethereum available on exchanges coincides with the growing anticipation surrounding the approval and launch of the Ethereum Exchange-Traded Fund (ETF). The introduction of such an ETF is expected to attract broader institutional and retail investment into Ethereum, thereby increasing demand and potentially significantly increasing its price.
According to a report from crypto analytics firm K33 Research, the launch of an Ethereum ETF could attract $3 billion to $4.8 billion in inflows in the first five months. This forecast is slightly higher than JPMorgan’s $3 billion estimate for this year. The research firm compared existing ETH-based exchange-traded products to similar Bitcoin products and open interest in futures contracts.
K33 Research predicts that an Ethereum ETF could yield between 800,000 and 1.26 million ETH, representing approximately 0.7% to 1.05% of the total Ethereum supply. This influx can cause a supply shortage. Vetle Lunde, senior analyst at K33 Research, pointed out that this significant supply absorption would likely lead to Ethereum price appreciation. Historical data supports this claim, as Bitcoin saw an increase of almost 60%, reaching record highs following the introduction of US spot ETFs, indicating a similar potential outcome for Ethereum.
Contributing to this optimistic outlook, VanEck, a major asset management firm, predicts that Ethereum could reach $22,000 per coin by 2030. This depends on the expected approval of Ether spot ETFs for trading on US stock exchanges, likely attracting significant interest from financial advisors and institutions. investors. Bloomberg analysts suggest that the SEC could approve Ethereum spot ETFs between late June and early July.
Predicting Ethereum’s Potential Impact on Altcoins
Additionally, Crypto analyst Derek predicts that this Ethereum surge will have a positive impact on the broader cryptocurrency market, particularly benefiting altcoins. Historical market behavior supports this expectation, where increases in major cryptocurrencies often precede uptrends in altcoins.
A well-known crypto analyst, Capo Of Crypto, expressed optimism about altcoins, stating that June could be a good month for them. He observed that Bitcoin’s recent rally was mainly due to optimism over the US Spot Bitcoin ETF. This trend could reverse as investor interest diversifies into Ethereum and altcoins.
Currently, Ethereum is trading near $3,700, reflecting a 3.21% decline over the past seven days. Despite this slowdown, some analysts remain optimistic about Ethereum’s potential for a significant rebound. Crypto Analyst Mags predicted a strong rally, suggesting that Ethereum could reach as high as $4,200 if historical trends hold, representing a 13% increase.
Thus, the early approval of Ethereum ETFs is expected to generate substantial inflows and create a supply crunch, which could push prices higher. This development will likely have a ripple effect on the cryptocurrency market, benefiting altcoins and potentially leading to a significant market shift. Analyst optimism suggests a bright future for Ethereum and the broader crypto market.
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