Ether ETF Approved, but Why Isn't Ethereum Surging? Market Reactions Analyzed

Despite the SEC's historic approval of spot Ether ETFs, ETH prices have remained stable. Experts suggest the market anticipated the news, and ETF inflows may drive future price increases.

Ether Price Stays Stable Despite ETF Approval Due to Anticipated News and Pending Launches

According to Cointelegraph, there could be two key reasons why Ether (ETH) has barely moved in price despite the historic approval of spot Ether exchange-traded funds (ETFs) in the United States.

On May 23, the Securities and Exchange Commission approved eight spot Ether ETFs for listing on their respective markets. Ether lost 3.4% right before the news but recovered by about 5% shortly after and is now trading at $3,806.

Crypto pundit Zach Rynes contends that the lack of movement reflects the belief that "everyone who wanted to buy the approval already did."

Ether had risen 29% in the previous week following reports that the SEC may have shifted its stance on ETF approvals.

Rynes and many others also point out that, while the ETFs have been approved, they have yet to be cleared for launch, which requires an approved S-1 filing — a thorough document that includes information on the firm's financials and risk profile, as well as the securities it intends to provide.

VanEck has submitted a revised S-1 filing to the SEC, and analysts predict that S-1 approvals might take weeks to months.

Rynes believes ETF inflows will be Ether's next key price driver once they begin trading.

"ETFs haven't actually launched yet, so net new capital inflow is still to come," Rynes wrote, with crypto research firm Second Mountain echoing a similar sentiment.

"Expect a massive capital inflow in the first week, potentially reaching billions," Second Mountain stated in a May 23 X post just before the SEC approved the ETFs.

However, it may take time for a trend to increase. Bitcoin's price fell by 15% after spot Bitcoin ETFs were permitted for trading on January 10. According to CoinMarketCap, it took 30 days for the cost to rise 30% to $51,870.

There are also lingering concerns that Grayscale's announcement of plans to convert its Grayscale Ethereum Trust (ETHE) into a spot Ether ETF may result in significant outflows, similar to Grayscale Bitcoin Trust (GBTC) following the adoption of spot Bitcoin ETFs in January.

"Grayscale also re-filed the ETHE registration they'd withdrawn. Remember GBTC outflows? Now it's $11B+ ETH that's been trapped for 7 years," pseudonymous crypto trader Rho Rider warned in a May 23 X post.

GBTC Loses $17.6B Post-ETF Launch; Experts Argue ETH is Undervalued, Bitcoin Recovers Slightly

According to Farside data, since spot Bitcoin ETFs began trading on January 11, GBTC has lost $17.6 billion in assets.

"ETH is stupidly undervalued," added independent Ethereum educator Sassal, arguing that the market has had only three days to "price in the ETF approval."

Meanwhile, Bitcoin fell by 1.2% to $67,362 after the statement but rebounded to $67,706 at publication.

Around the same time, PEPE reached a new all-time high of $0.00001531, a 5% increase within an hour of the approval announcement.

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