In the aftermath of the Securities and Exchange Commission’s (SEC) approval of spot Ethereum ETFs on May 23, 2024, the price of Ether (ETH) has surged, reaching close to the psychological $4,000 level during early trading on May 27.
This price surge has been fueled by a combination of factors, including anticipation of significant inflows into the newly approved ETFs and accumulation by large Ethereum whales.
TLDR
- Ethereum’s price surged nearly 5% on May 27, 2024, reaching close to $4,000, potentially marking the start of a post-ETF approval pump.
- Top Ethereum whales have accumulated around $2 billion worth of ETH (510,000 ETH) within 5 days of the ETF approval, indicating anticipation of significant inflows into the newly approved ETH spot ETFs.
- Some analysts predict ETH could reach $4,500 or even new all-time highs above $5,000 as ETFs start trading and receive substantial investments.
- The recent price surge has also positively impacted the DeFi ecosystem, with the total value locked (TVL) returning to its highest level in two years at $117 billion.
- However, technical analysis suggests weakening momentum, with a potential bearish divergence on the hourly time frame, indicating a possible pullback from the current levels.
The approval of spot ETFs for Ethereum was a long-awaited and highly anticipated event in the cryptocurrency industry.
ETFs are exchange-traded funds that track the price of an underlying asset, in this case, Ethereum. They provide investors with a regulated and convenient way to gain exposure to the cryptocurrency market without directly holding the digital assets.
In the days following the SEC’s approval, the price of ETH experienced a notable uptrend, surging from around $3,600 to nearly $3,900 within just three days.
This price movement was driven, in part, by the expectation that the newly launched ETFs would attract substantial investments from institutional and retail investors alike.
Notably, on-chain data analysis revealed that the top 1,000 Ethereum wallets, often associated with large investors and whales, have been actively accumulating ETH.
Within five days of the ETF approval, these wallets amassed an additional 510,000 ETH, valued at approximately $2 billion at current prices. This significant accumulation suggests that large investors are positioning themselves to capitalize on the anticipated influx of funds into the ETH ETFs.
The impact of the ETF approval has also been felt in the broader Ethereum ecosystem. Decentralized finance (DeFi) platforms, which heavily rely on the Ethereum network, have witnessed a resurgence in activity.
The total value locked (TVL) across DeFi platforms has returned to its highest level in two years, reaching $117 billion, with 60% of that value locked on the Ethereum network.
Analysts and industry experts have expressed bullish sentiment towards Ethereum’s price trajectory. Arthur Cheong, the founder and CEO of Defiance Capital, predicted that ETH could reach $4,500 even before the official launch of the ETFs.
