Why Is Ethereum (ETH) Going Up Today? (2024)

Investors are piling into Ethereum (ETH) as they expect the U.S. Securities and Exchange Commission to approve the first spot Ethereum exchange–traded fund, or ETF, this afternoon. The price of Ethereum has broken through $3,870 this morning, up about 5% over the past 24 hours.

Currently, only Ethereum futures ETFs have been approved for trading in the U.S. ETFs are investment vehicles that are similar to mutual funds but trade on traditional stock exchanges. Futures are complex derivative investments that track the future price of an investment. A spot ETF tracks an investment’s current price rather than its future price.

ETH began its rise earlier this week as traders once again became optimistic about the SEC’s possible approval of spot Ethereum ETFs. The SEC is due to make its final decision on a spot Ethereum ETF from investment management firm VanEck later today.

While enthusiasm surrounding the spot ether ETFs waned in recent months, reports on Monday that the SEC requested updated information from potential issuers sparked new hope among crypto analysts and investors that spot ETFs are poised for approval.

Ethereum has been trending steadily higher since October, when it appears to have bottomed out around $1,500.

With its latest gains, Ethereum has reached a level it hasn’t seen since March of this year. However, it is still a ways off of its all-time high of almost $4,900 set in November 2021.

Why Is Ethereum Going Up Today?

When the SEC issues its final decision on a VanEck spot Ethereum ETF today, many crypto analysts and investors are expecting an approval. On Monday, reports began circulating that issuers and exchanges have been asked for updates on key documents and other information related to Ethereum ETF applications.

An approval could spark an even larger rally in ETH, similar to the surge bitcoin (BTC) experienced following the approval of spot bitcoin ETFs in January. BTC is up more than 62% year-to-date.

After 11 spot bitcoin ETFs received approval in January, many believed that spot Ethereum ETFs would similarly be approved. However, over the past several months, the consensus has leaned toward rejection by the SEC.

The reasoning for that consensus largely focuses on how the SEC has not interacted much with the issuers or their applications. This stands in stark contrast to the period leading up to the spot bitcoin ETF approvals in January, during which the SEC provided issuers with robust commentary on their applications.

Investors’ optimism, however, has been renewed following Monday’s reports, and ETH is soaring as a result.

Investors aren’t the only ones feeling the excitement. Two Bloomberg ETF analysts, James Seyffart and Eric Balchunas, changed their prediction on the approval odds of spot Ethereum ETFs. Citing “chatter” that the SEC is changing its stance, the analysts upped the odds of an approval to 75%.

Is the Crypto Winter Over?

The first spot Ethereum ETF decision is expected this afternoon. Investors should keep a close eye on this decision and the ones to follow, as they will undoubtedly have a significant impact on the crypto market either way.

Last November, ETH shot higher due to a filing in the state of Delaware, in which BlackRock Advisors applied for an iShares Ethereum Trust with the U.S. Securities and Exchange Commission.

This caused considerable excitement across both the Ethereum and broader crypto markets as it was rightly assumed that BlackRock Advisors was none other than investment giant BlackRock. ETH has maintained a steady upward trajectory ever since.

It’s undeniable that approval of an Ethereum ETF would likely lift cryptocurrencies across the board. In fact, many cryptos received a boost this week on the speculation of approval alone.

Although it appears that 2022’s crypto winter is officially over, that doesn’t mean the crypto market has not maintained its volatility.

What Does Ethereum’s Bounce Mean for Investors?

Investors now face a crucial question: Is this yet another indication that a bottom has been reached by the crypto market, or is it simply a temporary rebound known as a dead cat bounce?

A dead cat bounce refers to a temporary price recovery within a larger negative trend, followed by a resumption of downward movement.

This certainly doesn’t look to be the case right now, but with the volatility the crypto market has seen over the past years—not to mention months and days—one can never be sure.

While Ethereum’s steady upward trajectory since October has offered investors some relief, the truth is that we are currently navigating uncharted territory in various aspects. These include the geopolitical landscape, economic indicators, cryptocurrency regulations and the Federal Reserve’s stance on interest rates.

Those familiar with the industry understand that even during the most favorable times, accurately predicting the short-term price movements of digital assets is nearly impossible. This holds especially true in the current market environment.