Ether hit its largest increase in nearly a month, becoming the focus of the cryptocurrency market. This surge may be related to the prospect of the United States applying to launch an Ether exchange-traded fund (ETF). If the SEC allows ETFs to directly hold Ether, traders will realize the potential for Ether to rise. Giants like BlackRock and Fidelity Investments have already submitted applications to establish such funds, but regulatory agencies' attitudes remain uncertain. The possibility of the SEC rejecting Ether applications before May is 75%
According to the VESYNC Financial APP, Ether has achieved its largest increase in over a month, becoming the focus of the cryptocurrency market, with its surge possibly related to speculation about the prospect of the United States applying to launch an Ether exchange-traded fund (ETF).
As of the time of writing, the second largest digital asset Ether is trading at around $3,709. Ether's year-to-date increase exceeds 60%, approaching the approximately 67% increase of the market leader Bitcoin.
Edward Chin, co-founder of the digital asset hedge fund Parataxis Capital, said, "News of Ether ETF issuers meeting with the U.S. Securities and Exchange Commission (SEC) has spread."
After a court overturned a ruling last year, the skeptical SEC reluctantly approved the U.S. spot Bitcoin ETF in January this year. Since its launch in January, such products have accumulated $59 billion in assets, making it one of the most successful fund categories ever launched. This has also helped Bitcoin hit a historic high in mid-March.
If the SEC allows ETFs to directly hold Ether, traders will realize the potential for Ether to rise. Giants like BlackRock and Fidelity Investments have submitted applications to establish such funds, but regulatory attitudes remain uncertain.
It is worth noting that although Bitcoin is considered a commodity, the SEC believes that in fact most other tokens are unregistered securities, leading to a plethora of violations in the digital asset space. Clearly defining Ether as an unregistered security will pose a series of challenges for the launch of ETFs.
Furthermore, the SEC's approval of spot Bitcoin portfolios also depends on the correlation between CME Bitcoin futures and the price movements of digital assets themselves, a correlation believed to be sufficient to detect fraud and manipulation.
Bloomberg Intelligence ETF analysts James Seyffart and Eric Balchunas stated in a report at the end of March that there is a 75% chance the agency will reject Ether applications before May. They indicated that the SEC may rely on data showing "relatively weak correlation between spot and futures markets."