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ETH tumbles despite the cheer around Ethereum’s ETF license. Assessing…

2min Read

Ethereum faces a bearish storm amid shifting tides, but an influx of new traders through its ETF could change its direction. 

Institutions start the Ethereum ETF license process as correlation with stocks widens

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  • Six institutions have filed applications for Ethereum ETF.
  • ETH and S&P 500 prices trend separately as stocks gain more value.

A recent report showed that certain financial institutions have begun applying for an Ethereum ETF. As ETH gains recognition as an asset class in traditional finance, its price trend could be affected.

– How much are 1,10,100 ETHs worth today

Ethereum ETF on the cards

According to Eric Balchunas, a senior ETF analyst at Bloomberg, six companies are applying for Ethereum futures ETFs. On 1 August, Volatility Shares, Bitwise, Roundhill, VanEck, Proshares, and Grayscale filed applications for these ETFs.

An Ethereum ETF is an exchange-traded fund that includes ETH or assets linked to its price. Unlike cryptocurrencies that are traded on dedicated cryptocurrency exchanges, an ETH ETF is traded on a traditional exchange.

The functioning of an ETH ETF is similar to any other ETF. Investors can purchase shares in the ETF through their brokerage, just like they buy stocks, and can trade these shares in the same manner.

The advantage of an Ethereum ETF is that investors don’t need to be concerned about private keys, storage, or security related to holding cryptocurrencies. Instead, they own shares in the ETF, providing them exposure to the cryptocurrency market without the complexity of purchasing and holding actual crypto assets.

Current Ethereum and S&P 500 correlation

The crypto-S&P 500 correlation chart revealed that Ethereum exhibited a strong correlation with stocks from early June to late July. During this period, their price trends moved in sync. However, the correlation weakened over time, and since then, ETH’s price trend has diverged from that of the S&P 500 and other stocks.

Ethereum S&P 500 correlation

Source: IntoTheBlock

As of the current writing, the S&P 500 and other stocks have experienced notable increases, rising by over 10%. In contrast, the price of ETH declined, though it has been relatively small, remaining below 1%. 

– Realistic or not, here’s ETH market cap in BTC’s terms

ETH on a daily timeframe

As of this writing, Ethereum was experiencing a loss on a daily timeframe, being valued at approximately $1,830, representing a 2% decline from previous levels. The Moving Average Convergence Divergence (MACD) indicator indicated a bearish sentiment as of this writing.

Additionally, the Relative Strength Index (RSI) line was nearing 40, which suggested the continuation of a significant bearish trend for Ethereum.

ETH/USD price trend

Source: TradingView


Adewale is a full-time journalist at AMBCrypto. While he is increasingly fascinating by the world of blockchain and cryptocurrencies, Adewale holds a degree in International Relations. Besides working on insightful articles that touch upon the crypto-space's hottest issues, he finds joy in supporting Manchester United and Afrobeat music.
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