With the Ethereum investment product set to go live Tuesday, many traders are wondering if ETH could be a lock to surge to $4,000 after the ETF launch. The token has currently fallen below the $3,500 mark, declining more than 1.4% in the last 24 hours, according to CoinMarketCap.
The asset is set to be only the second crypto-based ETF in the United States. Moreover, the market is hopeful it can mirror Bitcoin’s success. The leading cryptocurrency debuted its ETF in January. Just three months later, the BTC reached an all-time high price of $73,000.
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Is Ethereum to $4,000 a Lock After Its ETF Debut?
Last week, filings showed that Ethereum ETFs are set to debut on Tuesday, July 23rd. It should certainly be a landmark moment for crypto. Earlier this month, Kraken’s Thomas Perfumo told Bloomberg the product is “a big deal.” He called its arrival a “rising tide lifts all boat’s story.”
The question is, what kind of impact can it have on ETH? Many traders have their eyes on Ethereum, surging to $4,000 after the launch of the coveted ETH ETF. There is certainly increased activity, with trading volume surging more than 110% just a day before its arrival.
Crypto-analytic research firm ASXN predicted that spot Ethereum ETFs will generate monthly inflows of $1.2 billion. They noted that the forecast is rooted in Grayscale’s recent fee change. The firm restructured its product, adjusting its initial 0.25% fee, decreasing it to 0.15%. The move should only drive more interest in the product.
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“Grayscale’s strategic adjustment of its fee structure and the innovative mini trust offering are likely to redefine the competitive landscape of Ethereum ETFs,” the ASXN report stated. “This could not only stem potential outflows but also attract a broader base of institutional investors due to the more favorable fee dynamics.”
Additionally, the report stated that Ethereum’s offering “could have a disproportionately positive effect on its price,” relative to Bitcoin. It notes the difference in liquidity dynamics and “float,” which benefits ETH. Therefore, the price could see a massive influence from the offering.
Ethereum’s ability to reach $4,000 is dependent on trader reaction. If the bulls are able to take hold of the positive momentum, a resistance level around that mark could form. However, if not, resistance should begin to take shape at the $3,000 mark.