Crypto-related stocks including Coinbase Global COIN, MicroStrategy Inc. MSTR, Marathon Digital Holdings MARA and others showed subdued reactions to Nate Geraci, president of The ETF Institute, anticipating approvals for spot Ethereum ETH/USD this week. However, analysts are deliberate about how the ETF would impact ETH price.
What Happened: The launch of spot Ether exchange-traded funds (ETFs) could potentially lead to a 30% drop in Ether’s price, warns Andrew Kang, founder and partner at Mechanism Capital. Kang suggests that Ether’s price could plummet from its current value of $3,410 to as low as $2,400, CoinTelegraph reported on Monday.
At the time of writing on Monday, Coinbase was trading at 3.70% lower at $217.50 after closing at $225.86 on Friday, while Robinhood Markets, Inc. HOOD was trading 1.97% lower at $21.85 after it closed at $22.29 on Friday. Similarly, Marathon Digital was 5.15% lower since its close at $19.21 and was trading at $18.22 while MicroStrategy was trading 5.68% lower at $1,399.50 after Friday’s close of $1,483.76. Riot Platforms, Inc RIOT also reacted to the conversation by trading 3.87% lower at $9.180 during pre-market.
Kang expressed his skepticism about the potential benefits of an Ether ETF in a recent post. He stated, “How much upside would an ETH ETF Provide? I would argue not much,” predicting a price range of $2,400 to $3,000 post-ETF launch.
Kang anticipates that spot Ether ETFs will attract only 15% of the flows that spot Bitcoin BTC/USD ETFs have seen. This is in line with the 10–20% range estimated by Bloomberg ETF analysts Eric Balchunas and James Seyffart.
However, not everyone agrees with Kang’s predictions. Industry analyst Patrick Scott expects a similar directional movement to how the spot Bitcoin ETFs have performed, but he doesn’t foresee Ether’s price doubling. Meanwhile, asset management firm VanEck projects that spot Ether ETFs could drive Ether to $22,000 by 2030.
Kang also raised concerns about Ethereum’s future as a cash flow “machine”, suggesting that Ethereum may resemble an overpriced tech stock. He also noted that the removal of staking from the proposed spot Ether ETFs might deter investors from converting their spot Ether into ETF form.
Why It Matters: The launch of spot Ether ETFs has been a topic of discussion in the crypto world. Nate Geraci, president of The ETF Institute, had earlier anticipated approvals for spot Ethereum ETFs, potentially shaking up the cryptocurrency market.
In a post on X, formerly Twitter, Geraci predicted that spot ETH ETFs would be approved, stating, "I’m deciphering this as spot ETH ETFs will be approved this week…Just me tho."
Geraci's views were consistent with his forecast two weeks ago when he stated that he would be shocked if spot ETFs did not receive green signals before the end of the month. "No reason for delay," he had said.
This also follows a controversial political shift that led to the SEC's approval of spot Ethereum ETFs last month, a narrative that has been called into question after President Joe Biden vetoed a bill aimed at overturning SAB 121.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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