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The wider cryptocurrency market faced notable fluctuations over the last day following the approval of multiple spot-based Ethereum exchange-traded funds (ETFs) by the US Securities and Exchange Commission.
Data from CryptoSlate indicates that the leading 20 digital currencies by market capitalization, excluding stablecoins such as Tether’s USDT and Circle’s USDC, experienced declines of more than 3% each. Bitcoin and Ethereum, the two largest digital currencies by market cap, dropped to $67,051 and $3,671, respectively.
Market analysts have indicated that the approval of the ETH ETF was perceived as a “sell-the-news” scenario. Investors who anticipated the approval had already adjusted their positions. Over the past week, ETH’s price had surged by over 20%, with CryptoSlate noting that the Ethereum futures market reached a one-year peak of 3.6 million ETH.
Julio Moreno, the head of research at CryptoQuant, remarked:
“It appears that the market has already factored in the Ethereum spot ETF approval. Grayscale’s ETHE discount to ETH has considerably decreased in recent days. A similar trend was observed between GBTC and Bitcoin as the Bitcoin Spot ETF approval approached.”
Some analysts also cited the postponed launch of the ETFs as a contributing factor to the lackluster market activity. The SEC has approved the ETFs but has yet to provide the necessary clearance for their launch, which requires an approved S-1 filing, although this is largely a procedural step.
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James Seyffart, an ETF analyst at Bloomberg, clarified:
“This is merely a 19b-4 approval. There also needs to be an approval on the S-1 documents, which will take time. We anticipate it will take a couple of weeks, but it could extend beyond that.”
Over $400 million liquidated
More than 107,000 cryptocurrency traders experienced losses exceeding $400 million due to the market’s lackluster performance.
Data from Coinglass shows that ETH long traders, who had expected the ETF news to elevate the digital asset’s price, were particularly affected, incurring losses of around $107 million. The largest individual liquidation was a $12.4 million long position on Ethereum on the Binance exchange.
In the meantime, Bitcoin traders faced losses of approximately $75 million during the same timeframe.
The post Ethereum ETF approval fails to ignite crypto market, sparking $400 million in losses appeared first on CryptoSlate.
