Ethereum ETF Is Getting Closer, This Is The Impact On The Crypto Market

ETF Ethereum is expected to get approval from the SEC. (Photo; Doc. Fudao)

JAKARTA - Ethereum, the second-largest crypto asset after Bitcoin, is getting closer to the opportunity to get a license to be traded as an exchange fund (ETF) in the United States. This follows the approval of several Bitcoin ETFs by US regulators last month, sparking speculation that Ethereum ETFs will not be left behind.

Ethereum's ETF approval is expected to increase investor interest in this crypto asset, which has more than just a means of payment. Ethereum is a platform that allows the development of decentralized applications (dApps) and smart contracts running over blockchain technology.

According to Bernstein analysts, there is a 50% possibility that the US Securities and Exchange Commission (SEC) will approve Ethereum's ETF in May 2024. The SEC itself has approved the Ethereum futures product, which is the basis for approval of the Bitcoin ETF.

One of the largest crypto exchanges in the world, Coinbase, also supports Ethereum's ETF approval. In a response letter to the SEC, Coinbase confirmed that Ethereum is not a security, but a decentralized and liquid digital asset.

Coinbase also highlighted cooperation with the Chicago Mercantile Exchange (CME), one of the leading US exchanges, to oversee Ethereum trading.

However, Ethereum's ETF approval is not without risk. Some analysts are concerned about the negative impact of the entry of large institutional funds into the Ethereum market, which could threaten the decentralized and democratic nature of this network. In addition, there is a potential conflict of interest if one entity controls most ETF assets and has great influence in the network consensus process.

Meanwhile, the price of Ethereum continues to climb as ETF approval is expected. On Thursday, the price of Ethereum hit $3,002 (IDR 46.9 million), up more than 35% in a month. Analysts expect the price of Ethereum to continue to rise to reach $3,500 (IDR 54.6 million) in the near future, before setting a new record.