SCRYPT’s CEO Norman Wooding conveyed to crypto.news that the approval of spot Ethereum (ETH) ETFs by the SEC could lead to a significant uptick in ETH prices. Drawing parallels with spot Bitcoin (BTC) funds, Wooding predicted that ETH prices could surpass $4,000 upon approval. He emphasized that the introduction of spot ETH ETFs would alleviate concerns about Ethereum, thereby stimulating market demand.
Wooding suggested that if spot ETH ETFs capture between 10-20% of Bitcoin ETF flows, Ethereum could revisit its peak of $4,800. He highlighted the potential for these ETFs to attract a new investor base, driving demand and propelling Ethereum’s price upwards post-approval. According to Wooding, similar Grayscale spot Bitcoin ETFs accumulated over $35 billion in assets within six months of launch, foreshadowing substantial potential for spot ETH funds to see $5 billion in net inflows over a similar timeframe.
Observers have long speculated on the inevitability of spot ETH ETFs, viewing them as a matter of ‘when’ rather than ‘if.’ However, skeptics have debated the necessity of an institutional vehicle tracking spot Ether prices. Unlike Bitcoin, which is predominantly seen as digital gold and a store of value, Ethereum functions within a smart contract ecosystem for decentralized applications, relying heavily on Ether as a liquid asset and economic driver.
Wooding acknowledged concerns about potential Ethereum locked up in ETFs and the absence of staking, which could lead to reduced liquidity. Despite this, he argued that this scenario might encourage greater direct engagement in staking and decentralized finance (DeFi), ultimately benefiting ETH proponents. He noted that while ETFs could temporarily affect DeFi liquidity, broader market exposure could drive increased participation in staking and DeFi activities over time.
Regarding the timeline for spot Ethereum ETF approval, the SEC’s initial endorsement last month has set expectations for final approvals by the end of Q3 2024. Analysts such as Bloomberg’s James Seyffart anticipate potential approval as early as this month, with SEC Chair Gary Gensler hinting at a decision by summer’s end. Despite speculations and recent SEC actions against projects like MetaMask, Wooding expressed confidence in the SEC’s approval of spot ETH ETFs, asserting that a denial could harm the agency’s credibility.
Wooding also considered the potential impact of a rejection on Ethereum’s price, suggesting any downturn would likely be temporary. He highlighted Ethereum’s enduring technological value and utility, which he believed would stabilize the market and refocus investor attention on its long-term development prospects.
In summary, Wooding remains optimistic about the prospects of spot ETH ETFs, foreseeing significant positive implications for Ethereum’s market dynamics and investor sentiment upon their approval.