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Ethereum ETFs Approved – So Why Isn’t Ether’s Price Skyrocketing? – DL News
- The SEC approved Ethereum spot ETFs in near-official terms on Thursday.
- But the price of Ether is struggling to rise.
- This could be due to inflation fears.
Even with the approval of Ethereum spot ETFs in the US last week, Ether struggles to reach new highs.
The second-largest cryptocurrency recently traded at $3,840, roughly the same price as on Thursday, when the Securities and Exchange Commission approved Ethereum spot exchange-traded funds.
How come? According to Noelle Acheson, former head of market analysis for Genesis Global Trading, Ether’s price is bogged down by persistent inflation fears.
Manufacturing pushes inflation higher
Just like Bitcoin, Ethereum is sensitive to global macro forces, Acheson he wrote in his newsletter, “Crypto is Macro Now.”
On Thursday, as the cryptocurrency industry celebrated the SEC’s approval of Ethereum ETFs, the release of S&P Global’s Purchasing Managers’ Index – or PMI, an indicator that provides information on manufacturing and services – showed “pretty surprising” numbers.
“It appears the U.S. economy is booming, with manufacturing joining services to keep inflation high,” Acheson said.
This is a problem for Bitcoin and Ethereum. The Federal Reserve has kept interest rates relatively high to fight inflation.
High rates discourage investors from accumulating risky investments, such as cryptocurrencies and technology stocks, because they can earn high returns from risk-free Treasury bonds.
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“It appears that rates will truly remain ‘higher for longer,’” Acheson wrote, noting that expectations for lower rates have moved even further back than they were two weeks ago.
Also Quinn Thompson, founder of crypto hedge fund Lekker Capital She said that cryptomania wouldn’t happen until the US dollar weakened, which it likely will when the Fed cuts rates.
Drivers of the cryptocurrency market
- Bitcoin fell 2.9% in the past 24 hours, trading at $68,000.
- In the same period, Ethereum fell by 2.3%, to $3,840.
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Tom Carreras is a markets correspondent at DL News. Do you have a tip on Bitcoin ETFs? Contact tcarreras@dlnews.com