Ethereum’s value experienced a robust rebound on Tuesday as market participants retained a positive outlook on cryptocurrencies. The ETH token surged to a peak of $1,738 on Tuesday, marking the highest point since August 17th. It has increased by over 11% from its lowest mark this month.
Is an Ethereum ETF on the horizon?
The primary driver behind the Ethereum price increment was the ruling by a US court in favor of Grayscale. This lawsuit stemmed from the SEC’s arbitrary rejection of Grayscale’s petition to transform its GBTC ETF into a spot ETF.
In its ruling, the court stated that the SEC must reassess and endorse the ETF. Consequently, investors are optimistic that the SEC will proceed to approve the fund along with those submitted by firms such as Blackrock, Vanguard, and Invesco.
Grayscale’s initial strategy will likely revolve around converting the $5.2 billion Grayscale Ethereum Trust (ETHE) into a spot ETF. An ETF operates optimally as it avoids the discount to Net Asset Value (NAV). Currently, the market value of ETHE is $11, while the value of its holdings is $16.72.
Other firms, including Blackrock and Invesco, might also seek to establish their Ethereum ETFs. The challenge for Ethereum lies in its notable divergence from Bitcoin. Following its integration with the Beacon Chain, Ethereum shifted to a proof-of-stake model.
SEC’s Gary Gensler has asserted that Ethereum, due to its staking characteristics, has evolved into a financial security. He feels that brokers and exchanges holding ETH for staking should offer greater transparency to investors.
Experts contend that the agency stands a better chance of persuading a court regarding Ether’s classification as a security compared to the XRP case.
Ethereum price forecast
The 4H chart indicates that the ETH price has exited a consolidation phase and achieved a significant bullish breakout. It has surpassed the essential resistance level at $1,702, the highest point on August 23rd. The coin has also climbed above the 25-day and 50-day moving averages.
Crucially, it appears to be forming a minor bullish flag pattern. Therefore, the sentiment for the coin is positive, with the next target being $1,800. A downturn below the critical support at $1,702 would nullify the bullish perspective.
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