Ethereum dropped 4% immediately following the historic U.S. approval of spot Ethereum exchange traded funds (ETFs) yesterday.
Many believed that the passing of spot ETFs in the U.S. would be a bullish event for the second largest crypto currency in the world. And it still might be. But in the hours that followed the approval by the U.S. Securities and Exchange Commission (SEC), Ethereum’s price barely budged—moving up just 1%.
At the time of the approval, Ethereum was sitting at $3,840 but is now down 3.6% to $3,701, according to CoinGecko. This drop is even more pronounced over the past 24 hours dropping 6% from $3,926, as news of the approval began to circulate.
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This is a typical display of “buy the rumor, sell the news” as Ethereum’s price spiked 9% in the minutes that followed rumors that an ETF approval was imminent. Now the news has been confirmed, the market has begun to sell off.
Bitcoin saw similar action after the approval of spot Bitcoin ETFs in January. The morning after the approval Bitcoin plunged about 6% and then dived 12% over the coming week. All told, BTC didn’t make it back to the price it was on the day the ETFs were approved until after a full month of volatility.
But when it did, it started a steady hike to a new all-time high as volume from the 10 spot Bitcoin ETFs flowed into the market.
British multinational bank Standard Chartered predicted that both ETH and BTC will rocket upwards after Ethereum ETFs were approved.
“An ETH ETF approval will further legitimize the sector and therefore be BTC-positive as well,” Geoff Kendrick, digital assets researcher at Standard Chartered, said adding that he “would expect a fresh all-time high in BTC by the weekend.”
If it’s going to happen for Bitcoin, it might not be any time soon. BTC is currently down 3.5% over the past 24 hours.
Edited by Stacy Elliott.
