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ether Prices fell on Friday despite the U.S. Securities and Exchange Commission approving a rule change that would pave the way for exchange-traded funds to buy and hold cryptocurrencies.
Ethereum prices fell more than 2% to around $3,699.50, according to Coin Metrics. It maintained its 20% weekly gain and was on track for its best week in more than a year.
Rachel Lin, CEO and co-founder of decentralized derivatives trading platform SynFutures, said: “Today’s market behavior appears more like a pause as investors digest recent gains and assess the impact of external economic factors, including the recent interest rate sell-off. “This pause may also reflect a cautious approach given the continued uncertainty around regulatory approval timelines such as S-1 applications. “
Earlier this week, the approval of an Ethereum ETF was priced in
at the same time, Coin libraryA potential beneficiary of the Ethereum ETF, shares rose more than 8%, while Robin Hood Added 4%.
While both companies offer cryptocurrency trading, Coinbase may benefit more from the launch of an Ethereum ETF as it offers a host of other crypto services, including custody and staking, as well as a wider selection of tradable assets. Coinbase also operates a blockchain called Base, which is built on the Ethereum network.
Ethereum’s tepid price action may be due to investors quickly digesting the SEC’s approval earlier this week. The token surged more than 20% in two days amid sudden changes in expectations for the U.S. Securities and Exchange Commission’s approval of an Ethereum ETF application.
The previous consensus was that approval of these new funds was unlikely due to the agency’s lack of involvement in the filings. In contrast, in the weeks leading up to the Bitcoin ETF’s approval, the SEC was reportedly actively engaging with fund issuers.
Alex Saleh, director of partnerships at blockchain protection company Coincover, also pointed out that it is unclear when the new product will be launched and which players will be involved.
“This uncertainty makes it difficult to predict any changes in demand, leading to further price discovery,” he said. “Major industry players are calling this confirmation of Ethereum’s status as a commodity, which also creates further market uncertainty, with many investors awaiting the regulatory outcome of the commodities vs. securities debate.”
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