US regulators have finally approved a long-awaited Bitcoin spot exchange-traded fund (ETF), with analysts expressing that the move opens up more opportunities for the cryptocurrency sector. In fact, there is a bullish sentiment regarding the product’s long-term impact, mainly due to its ability to attract institutional investors.
In this context, there is speculation that such a product could potentially extend to other cryptocurrencies, such as Ethereum (ETH), the second cryptocurrency in terms of market capitalization. Analysts also expect that there is a possibility of approval for a spot Ethereum ETF in 2024.
Given the potential impact of the product on the value of ETH, Finbold consulted OpenAI’s generative artificial intelligence (AI) tool ChatGPT to provide a potential price path for Ethereum. If the product is approved, the tool presented bullish and bearish scenarios for Ethereum.
Bullish scenario
According to the utility, if the Ethereum spot ETF receives regulatory approval, it could mark a pivotal moment for Ethereum. Increased institutional interest and mainstream adoption may attract investors seeking exposure to Ethereum without direct ownership.
ETF approval could increase demand, boosting positive sentiment and confidence in Ethereum.
In this optimistic scenario, ChatGPT noted that the price of Ethereum could see a significant rise but acknowledged the challenges of determining the exact valuation of the asset. However, the AI tool indicated that the cryptocurrency is likely to reach levels above $3,000.
However, the tool cautioned that the bullish outlook depends on market dynamics, institutional interest, and broader cryptocurrency trends.
Bearish scenario
Contrary to expectations, approval of the spot ETF may not guarantee continued positive market sentiment. The tool suggested that traders and investors could choose to “sell the news,” leading to a short-term price correction.
In addition, regulatory uncertainties or concerns about the structure of an ETF may create doubts among market participants.
ChatGPT noted that Ethereum may face a temporary decline in a bearish scenario. The price may fall below current trading levels, which range from $2,300 to $2,000 or even lower, depending on how the market reacts.
Ethereum Spot ETF Potential
In fact, prominent figures in the financial world point out that an ETF could be huge. Specifically, BlackRock (NYSE: BLK) CEO Larry Fink noted that he “sees value” in a spot Ethereum ETF following the successful launch of a Bitcoin ETF.
It is worth noting that BlackRock, the world’s largest investment management company, applied to the Securities and Exchange Commission (SEC) for a place in the Ethereum ETF in November last year.
Furthermore, decisions on spot applications for Ethereum ETFs are expected from the SEC starting in May. Aside from BlackRock, other notable firms awaiting approval include Invesco, Ark, and VanEck, along with Grayscale, which aims to turn its existing Ethereum Trust (ETHE) into an ETF.
Meanwhile, Ethereum is facing increasing buying pressure, in contrast to Bitcoin’s weak trend following ETF approval.
Ethereum price analysis
By press time, Ethereum was trading at $2,548, reflecting weekly gains of more than 13%.
In terms of technical analysis, the asset is characterized by bullish sentiment. Summary of single-day metrics retrieved from TradingView It indicates a ‘Buy’ rating at 15, with the moving averages indicating ‘Strong Buy’ at 13. Additionally, oscillators hold a ‘Neutral’ position at 8.
In conclusion, the approval of a spot Bitcoin ETF will likely increase the likelihood of seeing a product similar to Ethereum. However, the impact on Ethereum price is likely to be influenced by general market sentiment at the same time.
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