Learn about the Ethereum explosion in one article

The recent reversal of the Ethereum spot ETF has attracted great attention from the market and regulators. Based on the optimism of the US approval of the Ethereum spot ETF, the price of Ethereum has risen sharply this week, and the current price is $3,807.

Although the reasons behind the sharp turn of the wind are still controversial, market observers and senior cryptocurrency practitioners generally believe that the approval of regulators will have different degrees of impact on Ethereum and other cryptocurrencies.

It is reported that asset management company VanEck is the first brokerage firm to submit an application for an Ethereum spot ETF to the US Securities and Exchange Commission (SEC). The result of the 1 9b-4 document application will be produced around 4 am on May 24th, Beijing time. Let's take a look at the views of 7 senior industry insiders on this matter and its subsequent impact.

Digital Asset Management Company: Galaxy Digital

Galaxy Digital CEO Mike Novogratz said in an interview with CNBC that the "large-scale" shift in Washington in the past 24 hours has overturned the Ethereum spot ETF game.

He believes that if the SEC's changes are politically motivated, then "this will be a huge shift." "If that were the case, the prices (in the cryptocurrency market) would be much higher than they are now."

In addition, he said that as Trump leads Biden in the polls, the cryptocurrency super PAC has raised more than $150 million to promote candidates who support the industry (such as in some swing states), and Democrats' aversion to cryptocurrencies is becoming increasingly untenable. "In fact, it was Democratic Massachusetts Senator Elizabeth Warren and a small group of people who tied the Democrats to this matter."

Novogratz added: "There is no reason to turn the technology of cryptocurrency into an outright political issue."

Ethereum Core Institution: Consensys

Ethereum co-founder and founder of crypto infrastructure company Consensys Joseph Lubin said that he expects "massive demand" for Ethereum, which could lead to a supply squeeze and push up its price.

Lubin told the media that institutions that have been approached for a Bitcoin ETF "will likely want to diversify into the second approved ETF." He said that "there will be considerable natural, pent-up pressure to buy Ethereum through an ETF." He added that there will be less supply to meet this demand than when the spot Bitcoin ETF was approved in January.

In the case of Bitcoin, authorized participants (i.e., companies that enter into contracts to buy Bitcoin on behalf of the ETF as new shares are created each day) can simply buy idle Bitcoin on an exchange or through an over-the-counter counterparty. But on-chain data shows that more than 27% of Ethereum has been staked, that is, locked in contracts and earning returns for its owners.

"Most of Ethereum plays a role in core protocols, DeFi systems, or DAOs (decentralized autonomous organizations)," Lubin pointed out. In other words, not only is Ethereum's market value lower than Bitcoin's - which makes Ethereum's price more sensitive to capital inflows - but a large part of its supply cannot be traded in spot ETFs.

Money Management Giant: Bitwise

"Cryptocurrency is going mainstream, a development that will push cryptocurrencies to all-time highs," Matt Hougan, chief investment officer of asset management giant Bitwise, wrote in a blog post this week.

But Hougan said the catalyst wasn't sudden optimism about an Ethereum spot ETF. "A big thing happened in Washington: a bipartisan group of senators and representatives passed the first pro-cryptocurrency legislation in Washington's history." He mentioned the bill to repeal the SEC's SAB 121 policy, which imposes strict rules on cryptocurrency custody.

"Whether we get approval for an Ethereum spot ETF or not, the latest support for cryptocurrency in Washington, D.C. is clear," Hougan added.

Blockchain Infrastructure Platform: Swarm

Timo Lehes, co-founder of blockchain infrastructure platform Swarm, believes that once the Ethereum spot ETF is approved, "capital will flow into" Ethereum in large quantities.

"Once you have configured Bitcoin, you will also look for other things as part of the portfolio diversification," he told the media,"Investors will naturally choose ETH as the next important position configuration of crypto assets. Although this is compared with the Bitcoin spot ETF launched in January this year, the inflow of funds may be dwarfed, but it is still enough to change its price trend."

Data Analysis Platform: Kaiko

Adam McCarthy, an analyst at the data analysis platform Kaiko, said that option traders who flocked around call options are now seeking higher returns, but investors should remain cautious. He said: "The demand for the Hong Kong Ethereum spot ETF is not large, and it has experienced net outflows for several days. The lack of a pledge channel for the Ethereum spot ETF is also an important factor and may further affect demand." He suggested paying attention to Grayscale's $9 billion ETHE product, "If it starts to have a large outflow of funds, it will have a significant impact on the price of Ethereum." Analysis and Research Firm: Bernstein According to estimates by Gautam Chhugani and Mahika Sapra, analysts at analysis and research firm Bernstein (the company has total assets of $725 billion), the approval of the spot Ethereum ETF will drive the price of Ethereum to surge by about 75%, reaching a high of $6,600.

They pointed out that the SEC approved a similar Bitcoin spot ETF product in January, and three months later, the event stimulated Bitcoin prices to rise by about 75% to an all-time high of $73,000.

"We expect ETH's price trend to be similar," Chhugani and Sapra said in a report this week.

It is worth mentioning that in November 2021, Ethereum hit an all-time high of $4,878. If it can really reach $6,600, the price of Ethereum will break the all-time high again.