ETFs
Ethereum ETFs Will Play a Crucial Role in the Growth of the Cryptocurrency Market
As the market anticipates the U.S. Securities and Exchange Commission’s (SEC) final decision on a spot Ethereum exchange-traded fund (ETF), experts believe such products will attract new investment and attention to the sector.
On July 12, Kraken’s chief strategy officer Thomas Perfumo told Bloomberg that Ethereum ETFs would lift the market.
ETF Approval Could Propel Ethereum to New Highs
According to Perfumo, Ethereum ETFs are a key catalyst for the cryptocurrency industry in the second half of this year. Other driving factors include the upcoming US elections, potential interest rate cuts, and the global adoption of Bitcoin ETPs.
Perfumo said the approval of Ethereum ETF products would be a an important moment for the industry. He stressed that ETFs would bring capital and renewed interest, benefiting the entire market.
He predicted that Ethereum ETFs could see monthly inflows of $750 million to $1 billion. If those inflows exceed expectations, they could drive up the price of ETH towards a new historic high between $4,000 and $5,000.
“I think the market is valued at something like $750 million to $1 billion of net inflows into Ethereum ETF products every month and so if we try to match that, that creates positive support for the industry,” Perfumo said.
Learn more: Ethereum ETF Explained: What It Is and How It Works
Reflecting on Bitcoin’s previous all-time high, Perfumo noted that the market lacked extremes volatility and an influx of new users. According to him, this shows that the growth peak has not been reached and that there is still room for growth.
“When I look at the previous all-time high of Bitcoin in March, that was what I call a quiet spike. We didn’t see similar levels of extreme volatility or similar levels of unprecedented volatility in signups on our platform to suggest that we really had a spike in momentum of people, tens of millions, hundreds of millions of people entering the industry for the first time,” he said. added.
Meanwhile, Perfume pointed out that the upcoming US elections will shape the future of crypto for the next four years. Cryptocurrency has become a major political issue in the current election cycle. The two main candidates —Former President Donald Trump and President Joe Biden— have taken different approaches to the sector, sparking strong reactions from the community.
Learn more: How to invest in Ethereum ETFs?
However, Perfumo stressed that the legislative branch plays a crucial role in the U.S. crypto industry as it develops regulatory clarity, which fosters growth. He noted that U.S. lawmakers have shown their support for crypto with their bipartisan support for major regulations like the Financial Innovation and Technology for the 21st Century (FIT21) Act And efforts to overturn the SEC’s controversial Staff Accounting Bulletin 121 (SAB 121).
“In the US specifically, it’s really about legislative action and building clarity for that industry… the Republican side seems to be more pro-crypto, more progressive in that sense,” he noted.
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