ether Cryptocurrencies also fell on Friday after the Securities and Exchange Commission approved rule changes that pave the way for exchange-traded funds that buy and hold cryptocurrencies.
Ethereum prices fell about 1% to around $3,745 after rising more than 20% this week to its highest since March 2023, according to Coin Metrics.
“Market activity today appears to be on pause as investors digest recent gains and assess the impact of external economic factors, including the recent decline in interest rates,” said Rachel Lin, CEO and co-founder of decentralized derivatives trading platform SynFutures. “The pause could also reflect a cautious approach given the ongoing uncertainty regarding the timeline for regulatory approvals such as S-1 filings.”
ETH ETF approval was priced in earlier this week
meanwhile, CoinbaseEthereum, a potential beneficiary of the Ethereum ETF, rose by more than 8%. Robin Hood It increased by 6%.
While both companies offer cryptocurrency trading, Coinbase may stand to gain more from the introduction of an Ethereum ETF as it offers other crypto services such as custody and staking, as well as a wider selection of tradable assets. Coinbase also operates a blockchain called Base, which is built on the Ethereum network.
Ethereum’s muted price movement may be due to investors quickly pricing in the SEC’s approval earlier this week. Expectations reversed, and Ethereum surged more than 20% in two days. The consensus to date was that the SEC was unlikely to approve the new fund, given its lack of involvement in the filing. In contrast, in the weeks leading up to the Bitcoin ETF’s approval, the SEC was reportedly actively engaging with the fund issuer.
Alex Saleh, head of partnerships at blockchain protection firm Coincover, also noted that it is still unclear when the new product will hit the market or which companies will participate.
“This uncertainty makes it difficult to predict shifts in demand that will lead to further price formation,” he said. “Insistence by industry leaders that this is Ethereum establishing itself as a commodity has also introduced further market uncertainty, with many investors awaiting the regulatory outcome of the commodities vs securities dispute.”
