United States regulators finally approved the highly awaited spot Bitcoin exchange-traded fund (ETF), with analysts expressing that this move opens up more opportunities for the cryptocurrency sector. Indeed, there is a bullish sentiment regarding the product’s long-term impact, mainly due to its potential to attract institutional investors.
In this context, there are speculations that such a product will likely spill over to other cryptocurrencies, such as Ethereum (ETH), the second-ranked cryptocurrency by market capitalization. Analysts are also speculating that there is a possibility of a spot Ethereum ETF getting approved in 2024.
With the product likely to impact the value of ETH, Finbold consulted the generative artificial intelligence (AI) tool ChatGPT by OpenAI to provide a possible price trajectory for Ethereum. If the product is approved, the tool offered bullish and bearish scenarios for Ethereum.
Ethereum ChatGPT bullish price prediction. Source: ChatGPT.
Bearish scenario
Contrary to expectations, approving a spot Ethereum ETF might not guarantee sustained positive market sentiment. The tool suggested that traders and investors could opt to “sell the news,” leading to a short-term price correction.
Additionally, regulatory uncertainties or concerns about the ETF’s structure might create skepticism among market participants.
ChatGPT noted that Ethereum could face a temporary decline in a bearish scenario. The price might drop below its current trading levels, ranging from $2,300 to $2,000 or even lower, depending on the extent of market reactions.
Ethereum spot ETF Potential
Indeed, prominent figures in the financial world suggest that an Ethereum ETF could be monumental. Specifically, BlackRock’s (NYSE: BLK) CEO Larry Fink noted that he ‘sees value’ in a spot Ethereum ETF following the successful launch of the Bitcoin ETF.
It is worth noting that BlackRock, the largest investment management firm in the world, filed with the Securities and Exchange Commission (SEC) for a spot in Ethereum ETF in November of last year.
Moreover, decisions on spot Ethereum ETF applications are anticipated from the SEC starting in May. Apart from BlackRock, other notable firms in line for approval include Invesco, Ark, and VanEck, alongside Grayscale, which aims to convert its existing Ethereum Trust (ETHE) into an ETF.
Meanwhile, Ethereum faces heightened buying pressure, contrasting with Bitcoin’s weakening trend following the ETF approval.
Ethereum price analysis
By press time, Ethereum was trading at $2,548, reflecting weekly gains exceeding 13%.
ETH seven-day price chart. Source: Finbold
In terms of technical analysis, the asset is characterized by bullish sentiments. A summary of the one-day gauges retrieved from TradingView indicates a ‘buy’ rating at 15, with moving averages signaling a ‘strong buy’ at 13. Additionally, oscillators are holding a ‘neutral’ position at 8.
ETH technical analysis. Source: TradingView
In conclusion, the approval of the spot Bitcoin ETF has potentially increased the likelihood of witnessing a similar product for Ethereum. However, the impact on the price of Ethereum will likely be influenced by the overall market sentiment at the same time.
Disclaimer:The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
