The long-awaited approval of spot Ethereum ETFs (exchange-traded funds) in the U.S. could be the catalyst for a crypto bull run in the third quarter, according to analysts at Bitfinex. This regulatory green light, anticipated sometime in Q3 2024, is expected to fuel the current positive momentum in the digital asset market.
Several factors are contributing to the optimistic outlook. The first quarter saw signs of a slowing economy, leading to speculation of the Federal Reserve potentially cutting interest rates later this year. This, in turn, could increase investor appetite for riskier assets like Bitcoin and Ethereum. However, Bitfinex analysts caution that this could also lead to uneven flows into ETFs tracking these assets, potentially impacting investor sentiment.
Historically, Bitcoin price surges have followed mining reward halvings, where the amount of new Bitcoin created is cut in half. With the April 2024 halving already behind us, analysts predict tailwinds for Bitcoin, with a bull market potentially starting 10-12 weeks after the event. Bitfinex highlights that a Q3 Ethereum ETF launch could further amplify this positive momentum for the entire crypto market.
The approval of spot Ethereum ETFs is a game-changer for institutional investment. Regulatory uncertainties and the complexities of directly holding crypto assets have kept many large institutions and asset managers on the sidelines. However, a regulated ETF provides a familiar and compliant way for them to gain exposure to Ethereum. This, according to Bitfinex, could be a major bullish signal for the entire crypto market, potentially leading to a significant surge in Ethereum’s price.
Also Read: Ethereum (ETH) Price To $8,000? Analyst Predicts Massive Surge After 180% Rally
Encouragingly, SEC Chair Gary Gensler indicated in June that the launch of spot Ether ETFs is progressing smoothly. However, increased volatility is expected in both traditional and crypto markets throughout July. Regulatory developments and macroeconomic policies will continue to play a crucial role in shaping market dynamics. Investors should stay tuned for upcoming economic data releases and Fed policy updates, which could significantly impact both markets.
The Fed Funds futures data currently suggests the market expects two rate cuts in 2024. However, the Fed’s stance on interest rates remains a key factor to watch. Any hawkish signals from the Fed could dampen the optimistic outlook for cryptocurrencies.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
