The Securities and Exchange Commission gave green light to the first-ever exchange-traded funds for Ethereum.
Just like the launch of spot Bitcoin ETFs, this approval also a big step for Ethereum and the whole digital asset industry, the clear sign of the mainstream financial integration.
Arrival
Several firms, including 21Shares, Bitwise Asset Management, BlackRock, Invesco, Franklin Templeton, Fidelity Investments, and VanEck announced that trading for Spot Ethereum ETFs start on Tuesday.
From now they offers the possibility for investors to directly invest in Ethereum through a regulated financial product, and many thinks this could lead to more investment and liquidity in the market in the same way as it did with Bitcoin.
Since January, Bitcoin ETFs have seen multibillion dollars investments from both retail and institutional investors.
Ethereum’s market response was unexpectedly muted, despite the long waiting before the launch. The price of Ethereum fell by 1.32% right after the announcement, dropping to around $3,400 before stabilized.
As analysts say, this drop is a textbook example of a so-called ‘sell-the-news’ effect, where prices dip after major news is released.
The lukewarm response has left many investors and analysts in surprise, given the importance of the SEC’s decision.
Money in, money out
In a new interview with the crypto news agencies, Matteo Greco, a Research Analyst at Fineqia, discussed the potential for initial outflows from ETFs, which might add more to selling pressure.
Greco mentioned that the Grayscale Ethereum Trust, which was trading without redemption options for years, likely will see net outflows similar to those experienced by the Grayscale Bitcoin Trust when Bitcoin Spot ETFs were launched.
Investors ditched their papers in favor of other issuers’ products. These outflows could offset net inflows to the new Grayscale ETH Spot ETFs, for example the Ethereum Mini Trust, mirroring the pattern observed with Bitcoin in January, what means Grayscale maybe won’t get any additional funds from investors.
Whale alert
After the news, experts reported a large transaction by an Ethereum whale identified as 0xf26.
This unkown investor deposited 8,762 ETH, valued at approximately $30.34 million, into Binance.
This is not the first time this address is active, two months ago the whale withdrawn 8,763 ETH from Binance at an average price of $3,882, costing about $34 million.
This is the amount what the user now sending back to the exchange, likely to sell.
But selling now would result in a loss of around $3.67 million, a 10.8% decrease after nearly two months.
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