In a post on social media platform X (formerly known as Twitter) on 23 December 2023, Pentoshi, a prominent pseudonymous crypto analyst working with Merit Circle, shared their perspective on the potential launch of spot Ethereum (ETH) Exchange-Traded Fund (ETF) in the U.S. and its likely impact on the market.

Historical Context with Bitcoin ETF

Pentoshi recalls their optimistic stance (“bull tweeting”) on the Bitcoin (BTC) ETF when Bitcoin was priced between $25,000 and $28,000. This historical reference sets the stage for their current predictions regarding Ethereum.

Expectations for Spot Ethereum ETFs in the U.S. in 2024

The crypto analyst expresses a similar sentiment for the anticipated spot Ethereum ETFs in 2024. The introduction of an ETF for Ethereum would enable investors to trade shares representing Ethereum on traditional stock markets, potentially broadening its appeal and investment base.

Game Theory and Market Behavior

Pentoshi applies game theory to predict market behavior as the launch of a spot Ethereum ETF in the U.S. nears:

  • Reduced Selling Pressure: Pentoshi expects investors to hold onto their Ethereum holdings in anticipation of a price increase leading up to the spot ETF launch. This behavior is likely to decrease the supply of Ethereum in the market.
  • Increased Buying Interest: Pentoshi believes there might be an increased demand for Ethereum, as investors aim to purchase before the spot ETF launch, expecting bullish market conditions thereafter.

Ethereum Price Targets

Pentoshi sets forth potential price targets for Ethereum, indicating levels at “$2,7xx” and “$3.4k.” These targets suggest specific price ranges they believe Ethereum could achieve around the ETF launch.

At the time of writing, $ETH is trading at around $2,283.50, down 0.35% in the past 24-hour period but up 90.24% in the year-to-date period.

Source: TradingView

According to a report by Cointelegraph published on 19 December 2023, the U.S. Securities and Exchange Commission (SEC) has postponed its verdict on several Ethereum ETFs to May 2024, as indicated in recent regulatory filings dated December 18.

These filings reveal that the SEC has deferred its decision regarding the Hashdex Nasdaq Ethereum ETF and the Grayscale Ethereum Futures ETF. The Hashdex Ether ETF is designed to include both direct Ether holdings and futures contracts. On the other hand, Grayscale’s Ethereum Futures ETF is perceived as a strategic move, often referred to as a “trojan horse,” aimed at nudging the SEC towards approving the conversion of Grayscale’s Ethereum Trust into a spot Ethereum ETF.

In these documents, the SEC announced the initiation of proceedings to collect additional public feedback to determine the viability and appropriateness of listing these ETFs.

Furthermore, the SEC has also delayed its decision on the VanEck spot Ethereum ETF and the spot Ethereum ETF proposed by Cathie Wood’s ARK Invest in collaboration with 21Shares.

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