After Two Years Ether Surpasses $4,000 - Where Will it Peak?

Ether, the second-largest cryptocurrency by market capitalization, has recently surpassed the $4,000 mark for the first time since December 2021. This milestone comes amid ongoing speculation about the potential approval of a spot Ether exchange-traded fund (ETF) in the United States this year.

The Price Surge: A Steady Upward Trend

The price of Ether has been on a steady upward trend, with a 4% increase in the last 24 hours, a 15% increase over the past week, and a remarkable 68% increase over the past month. This growth has put Ether on track to outperform Bitcoin, which has registered 60% year-to-date gains. The GM 30 Index, representing a selection of the top 30 cryptocurrencies, has also seen a 3% increase to 150.04 over the last 24 hours.

The Spot Ether ETF Speculation: Driving Force Behind the Surge

The successful launch of spot Bitcoin ETFs in January has sparked interest in another potential narrative for the crypto markets: the prospect of a spot Ether ETF in the U.S. Several big-name firms, including Fidelity, BlackRock, and Franklin Templeton, have applied for a spot Ether ETF over the past few months. The growing speculation over the potential approval of these products this year has seen Ether outperform Bitcoin in 2024, with Ether registering 73% year-to-date gains compared to Bitcoin's 60%.

Bloomberg ETF analyst Eric Balchunas has suggested a 70% probability of approval by May 23, the final deadline for the Securities and Exchange Commission (SEC) to rule on a spot Ether ETF application from Ark and 21Shares, the first that was filed. Standard Chartered has also predicted that Ether could reach the $4,000 level if it mimics Bitcoin's pre-spot ETF approval performance. However, investment bank TD Cowen has previously stated that the SEC is unlikely to approve spot Ether ETFs "any time soon," and JPMorgan doesn't see more than a 50% chance of a spot Ether ETF approval by May.

Legal Issues and Policy Environment: Factors Influencing Approval

Earlier this week, Variant Fund Chief Legal Officer Jake Chervinsky added that the SEC's denial of spot Ether ETFs by the May deadline is more likely than people think. Chervinsky cited legal issues and the policy environment in Washington D.C. as factors that could hinder the approval process. While some in the crypto community have pointed to BlackRock's record of just one ETF denial in its history as a positive indicator of a spot Ether ETF approval, Chervinsky disagreed. "‘BlackRock always wins' is a lazy bull take," the former Compound Labs General Counsel said.

SEC Chair Gary Gensler's statement that the agency's approval of spot Bitcoin ETFs was limited to the single cryptocurrency and "shouldn't be read to be anything more than that" has also added to the uncertainties surrounding spot Ether ETF approvals, given Gensler's stance that cryptocurrencies other than Bitcoin are securities.

Optimism Amid Uncertainty: Market Sentiment

Despite these uncertainties, the surge in Ether's price and the anticipation of a potential spot Ether ETF approval have fueled optimism in the crypto market, with many investors and analysts eagerly awaiting the SEC's decision.

Bottom Line

The recent surge in Ether's price to $4,000 and the ongoing speculation about a spot Ether ETF approval in the U.S. have added to the excitement in the crypto market. While the outcome remains uncertain, the potential approval of a spot Ether ETF could further boost the cryptocurrency's growth and solidify its position as a leading player in the digital asset space. Investors will be closely monitoring regulatory developments and market dynamics to gauge the future trajectory of Ether and the broader cryptocurrency market.