The Ethereum ecosystem may be on the verge of its most bullish phase yet, with the imminent launch of the first spot Ether exchange-traded funds (ETFs).
According to Vivek Raman, a managing director at BitOoda crypto investment bank and former Wall Street bond trader, the second half of 2024 could be the most bullish period for Ether (ETH).
This is because the Ether ETF launch will solve most of the risks associated with Ether, Raman wrote in a July 22 X post:
“In hindsight, the second half of 2024 will be the most obvious bullish setup for the Ethereum ecosystem in recent history. Three headwinds that have held ETH back will become tailwinds, starting this week.”
ETFs can significantly contribute to the underlying crypto asset’s price appreciation. For Bitcoin (BTC), ETFs had accounted for about 75% of new investment in the world’s largest cryptocurrency by Feb. 15, as it surpassed the $50,000 mark.
Ether ETFs will introduce more institutional and retail capital
The launch of the first Ether ETFs will unlock new capital for the crypto industry from both institutional and retail investors.
This is mainly because the ETFs will provide more regulatory clarity for Ether and bring the current “regulatory purgatory” to an end. According to Raman:
“Retail only wants to invest passively, and institutions only want to invest after regulatory clarity. The ETH ETF will unlock new inflows from both in one fell swoop.”
In terms of inflows, Ether ETFs could capture around 25% of the assets under management (AUM) of the current spot Bitcoin ETFs, Charles d’Haussy, CEO of the dYdX Foundation, told Cointelegraph.
The Ether ETFs could also mean the end of the Securities and Exchange Commission’s (SEC) “regulatory witch hunt against ETH,” which could signal more innovation for the wider Ethereum ecosystem, added Raman.
Can Ether price reach a new high as the macro landscape shifts to risk-on assets?
Lastly, Ether’s price could benefit from a wider macroeconomic shift toward more risk-on assets during the second half of 2024, in anticipation of potential interest rate cuts in the world’s largest economy, the United States.
The past two years have forced investor capital into safer, large market-cap companies like Nvidia, to weather the wave of interest rate hikes and monetary tightening.
Yet, this macro landscape is about to shift to favor more risky assets, according to Raman. He wrote:
“The political view of crypto - which has been unabashedly hostile for years - is changing. The largest capital markets in the world are finally embracing crypto, and new institutional + retail capital will flow into ETH + BTC, with the ETFs as the safest on-ramps.”
Ether price is up over 4.5% on the weekly chart, but ETH is struggling to decisively breach the $3,500 resistance line, according to CoinMarketCap data.
Yet, other analysts are also bullish on Ether price, For instance, Matt Hougan, chief investment officer of Bitwise, expects Ether to reach a new all-time high shortly after the ETF launch.