Ethereum price remained stable on Tuesday, even as the Securities and Exchange Commission (SEC) approved ETFs by companies such as BlackRock, Invesco, Bitwise, and Franklin Templeton. The ETH token traded at $3,500, maintaining its position after a 25% surge from its lowest point this month.

SEC Approves Spot Ethereum ETFs

The SEC approved spot Ethereum ETFs this week, with trading expected to start on Tuesday. This development is significant for Ethereum and the ETF issuers, given the SEC’s previous stance that Ether is a security due to its staking features.

Some of the approved ETFs include ETH by Grayscale, EZET by Franklin Templeton, ETHV by VanEck, FETH by Fidelity, and ETHA by Blackrock. Most of these funds have a 0% starting fee, with Blackrock’s ETHA offering a smaller 0.12% waiver. Grayscale’s ETH will be the cheapest Ethereum ETF, with an expense ratio of 0.15%. Other affordable options include EZET (0.19%), ETHV (0.20%), and ETHW (0.20%).

Expectations for Ethereum ETFs

We anticipate that the Ethereum ETFs will begin trading tomorrow. This means we should see several filings on the SEC site today, indicating that the ETFs’ prospectuses have gone “effective,” likely around or after market close.

“Buy the rumor, sell the news”

In theory, Ethereum’s price should have increased following the ETF approval news. For example, Bitcoin rose from below $40,000 in January when the SEC approved spot ETFs, reaching a record high of $73,750. However, there’s a risk that Ethereum might pull back since the ETF approval was anticipated. This expectation partly explains why Ether has risen by over 25% from its lowest point this year.

This scenario is known as ‘buy the rumor, sell the news’. It occurs when an asset rises in anticipation of a significant event and then falls when the event happens. For instance, in 2023, the XRP token increased to $0.9325 following the SEC’s partial loss in its lawsuit against Ripple, only to slump by 60% later.

Fortunately for Ethereum, it has formed a bullish flag chart pattern, which often indicates a continuation. More upside will be confirmed if it rises above the upper side of the flag pattern at $3,570.

Strong Fundamentals for Ethereum

Ethereum also boasts solid fundamentals. As noted by Jay Jacobs from Blackrock, the network has real utility, being the most popular blockchain network in Decentralized Finance (DeFi), the metaverse, stablecoins, and non-fungible tokens (NFTs). It has over $79 billion in stablecoins and has already collected over $1.8 billion in fees this year.

“While many see Bitcoin’s key appeal in its scarcity, many find Ethereum’s appeal in its utility. You could think of Ethereum as a global platform for applications that run without decentralized intermediaries.”

Ethereum has a long track record of outperforming Bitcoin, having risen by 1,600% in the past five years compared to Bitcoin’s 600% increase. Therefore, investors who have allocated funds in Bitcoin ETFs like Millenium Management, Susquehanna, and Apollo Global may also decide to invest in these new Ethereum ETFs. Additionally, Ethereum balances in exchanges have dropped sharply this year, indicating a potential bullish trend.

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