Should You Keep or Sell Your Ethereum? Expert Insights Prior to the SEC’s ETF Decision
As the SEC’s deadline for deciding on spot Ethereum ETFs approaches, investors are grappling with whether to hold onto or sell their Ethereum holdings. Experts offer their perspectives on the potential impact of an expected rejection and what it means for the broader cryptocurrency market.
Insights from Experts
Analysts are predicting that the SEC will likely reject applications for spot Ethereum ETFs by the end of May. Bloomberg ETF analyst Eric Balchunas has adjusted his approval estimate from 70% to 25%, indicating a bearish sentiment. Decentralized prediction markets also point to low approval probabilities, with some as low as 18%.
Lark Davis’s Point of View
Respected crypto investor Lark Davis believes that the market has already factored in the anticipated rejection. He states, “At this stage, I think the rejection is priced in. No one is expecting an approval right now.”
Davis emphasizes that while there may be short-term volatility after the announcement, the overall impact on Ethereum’s price is likely to be minimal. He refers to the efficient-market hypothesis, which suggests that current asset prices reflect all available information. Davis notes that an unexpected approval would have a more significant impact on Ethereum’s price, indicating new demand factors.
Assessing the Impact on Bitcoin and the Broader Market
Bitcoin and Ethereum often move in sync, with a correlation of approximately 62% as of April 11. Given their significant market capitalizations, any substantial movement in either cryptocurrency can influence the entire crypto ecosystem.
Although experts anticipate a rejection, they believe it won’t have a significant effect on Ethereum’s price or the broader market. Davis argues that Ethereum has performed well without an ETF, citing a 45% increase year-to-date.
Long-Term Outlook and ETF Approval
Despite the expected rejection, experts foresee eventual approval in the long term. Analysts compare Ethereum’s utility to Bitcoin’s, highlighting Ethereum’s focus on decentralized applications and technological innovation.
Although the approval timeline remains uncertain, analysts do not expect it to happen in May. Nevertheless, they anticipate that there will be no significant price decrease in Ethereum following the rejection.
As the SEC’s decision on spot Ethereum ETFs looms, investors are faced with the dilemma of whether to sell or hold their Ethereum holdings. According to expert opinions, while the rejection may lead to short-term volatility, Ethereum’s long-term prospects remain bullish regardless of the outcome.