KEY POINTS
- CryptoQuant's Ho said a spike in U.S. ETH demand on Coinbase "triggered" the Ether price's upward action
- Crypto watchers are anticipating the SEC's decision regarding spot ETH ETFs
- Some analysts have expressed optimism that spot Ether ETFs will also get approved
The recent 11% rally of Ether (ETH) was driven by a spike in demand among U.S. investors, data from local exchange activity tracker CryptoQuant showed.
Data from CryptoQuant's Coinbase premium index, which displays the gap between Coinbase's ETH/U.S. dollar pair and Binance's ETH/USDT pair, showed that there was an increase in ETH demand on regulated exchange Coinbase in the U.S.
The data also showed that Coinbase remains popular among cryptocurrency traders in the west, particularly in the U.S. and Europe.
Ho Chan Chung, head of CryptoQuant's marketing, said in a Telegram message that the recent ETH "price action was driven by" demand in the U.S. "We can clearly see that the Coinbase has triggered the upward movement with the premium index," he added, as per CoinDesk.
Last week, ETH passed the $3,000-mark – the first time since April 2022 that it saw such a price development.
An upward trend in ETH, which is second only to BTC in terms of market capitalization, comes at a time when the crypto market is anticipating the possible approval of spot ETH exchange-traded funds (ETFs) in the U.S. following the Securities and Exchange Commission's (SEC) move of approving 11 spot Bitcoin ETFs last month.
So far, the following companies have submitted spot ETH ETF applications to the SEC: Hashdex, Invesco and Galaxy, VanEck, Grayscale, Ark and 21Shares, Fidelity, BlackRock and asset management giant Franklin Templeton.
There have been reports that the SEC is a "hard no" on Ethereum ETFs and there was "internal resistance to the idea." Still, industry players, including one approved to issue spot Bitcoin ETFs, are hopeful that the SEC will be compelled to also approve spot ETH ETFs, considering the successful launch of BTC spots.
Among the bulls are Bloomberg ETF analyst Eric Balchunas, who told Cointelegraph that the "Ether spot is tied to the hip of Bitcoin for sure," so he doesn't foresee a scenario where Bitcoin spots are approved and Ether spots aren't. He also revealed that he received signals "on the back channels" that spot ETH ETFs "will be fine."
Other industry experts are holding off on too much hopes for the approval of Ether spots this year. Digital asset lawyer Joe Carlasare said he thinks "it will take a bit longer than folks expect" for the American financial regulator to give spot Ether ETFs the green light.
SEC Commissioner Hester Peirce has also signaled that the regulator will not approach Ether spots in the same way it did with BTC spots. "The agency, having heard from a court that the approach we were taking was ... not showing the kind of consistency that a regulator needs to show, I think that kind of a lesson will certainly stick with us," she noted.
