Why Is ETH Price Falling Despite SEC Approving All Spot Ethereum ETFs?

Ethereum’s
(ETH)
price

has
failed
to
make
any
significant
rally
following
the
Securities
and
Exchange
Commission’s
(SEC)
approval
of
the


Spot
Ethereum
ETFs.
This
is
undoubtedly
surprising,
given
that
the
approval
was
expected
to
spark
a
massive
price
surge
for
the
second-largest
crypto
token. 

Why
ETH’s
Price
Has
Failed
To
Rally

Ethereum’s
price
may
have
failed
to
rally
because
the
crypto
token
was
already
priced
into
the
news
about
a
potential
approval.
It
is
worth
noting
that
ETH’S
price


rallied
by
almost
20%

earlier
this
week
when
Bloomberg
analysts


Eric
Balchunas

and


James
Seyffart

increased
their
approval
odds
from
25%
to
75%,
suggesting
that
approval
was
almost
likely. 

Therefore,
this
could
have
turned
out
to
be
a


typical
‘sell
the
news’
event,
with
many
traders
currently
taking
profits
from
their
earlier
ETH
investments.
NewsBTC
reported
that
Ethereum
whales
had
bought
over
110,000
ETH
($341
million)
between
May
19
and
20
as
they
positioned
themselves
ahead
of
any
news
regarding
a
potential
approval
of
these
funds. 

Meanwhile,
historically
speaking,
this
could
have
been
expected
from
ETH’s
price,
considering
that
Bitcoin
(BTC)
experienced
a
significant
drawdown
following
the


approval
of
the
Spot
Bitcoin
ETFs. 

However,
it
is
worth
mentioning
that
unlike
the
Bitcoin
ETFs,
which
began
trading
immediately,
these
Spot
Ethereum
ETFs


won’t
start
trading

just
yet.
The
SEC
only
approved
the
exchange
filings
(19b-4s)
and
will
still
have
to
approve
the
registration
filings
(S-1s)
for
these
funds
to
begin
trading. 

The
fact
these
Ethereum
ETFs
won’t
begin
trading
just
yet
could
be
another
reason
why
ETH’S
price
hasn’t
reacted
positively
to
this
development.
As
such,
approval
of
the
registration
filings,
which
may
take
weeks
or
months,
may
be
needed
to
spark
another
rally
for


Ethereum
and
other
altcoins

by
extension. 

A
key
positive
is
that
ETH
is
up
by
over
28%
in
the
last
seven
days,
which
is
a
big
deal
considering
that
the
crypto
token
has
lagged
for
a
while
now
and
failed
to
match
up
with
other
major-cap
crypto
tokens. 

Another
Reason
To
Be
Bullish
On
Ethereum

The
approval
of
the
Spot
Ethereum
ETFs
is
a
clear
indication
that
the
SEC
doesn’t
consider ETH
a
security,
contrary
to
earlier


reports

that
the
Commission
might
have
held
this
belief
for
some
time
now. 

TuongVy
Le,
a
General
Counsel
at


Anchorage
Digital,
noted
in
an
X
(formerly
Twitter)


post

that
funds
whose
assets
are
40%
or
more
securities
may
not
register
through
a
form
S-1
but
through
Form
N-1A
or
N-2.

Therefore,
if
the
SEC
considered
ETH
a
security,
it
would
have
rejected
the
S-1
filings
made
by
the
various
fund
issuers
like


BlackRock

since
these


Ethereum
ETFs

will
hold
ETH
as
their
major
assets. 

At
the
time
of
writing,
ETH
is
trading
at
around
$3,803,
according
to


data

from
CoinMarketCap. 

Featured
image
created
with
Dall.E,
chart
from
Tradingview.com