Investors have to wait a little more for a definitive SEC ruling on ETFs

The crypto market has been reborn out of the ashes several times since its initial introduction in the late 2000s, and it seems that every time it comes back it manages to reach a new peak. While the constant price fluctuations and overall growth stagnation have caused investors to struggle and put new investments aside for a while, the situation appears to be gradually changing at the moment. Investors are once again looking into how to buy cryptocurrency to add to their portfolios in order to foster diversification.

However, with the market still recovering after some of the worst moments in its history, you should remain realistic and aware that changes could occur at any time.

a pile of gold bitcoins sitting on top of a table

Image source: https://unsplash.com/photos/a-pile-of-gold-bitcoins-sitting-on-top-of-a-table-trliGkPO7jY 

ETFs 

The emergence of exchange-traded funds has been one of the hottest topics for the cryptocurrency market over the past months. Investors were expecting a definitive ruling and approval, but the Securities and Exchange Commission refused to give the green light, citing the constant shifts and fluctuations in the market that are making crypto coins unreliable assets in the eyes of regulators.

The decision was delayed, and many investors were expecting an answer in December. However, it seems now that they are set to be disappointed, as the authorities have concluded that extending the delay is the only way forward. On December 5th, the SEC announced that it had designated a more extended period to decide whether ETFs should be approved or not.

At the moment, the Commission believes January 25th is the most likely date for an official announcement. So far, the SEC has never approved an exchange-traded fund based on a cryptocurrency. The historical movement would signal that more assets that are similar to the ETFs could be supported in the future. Grayscale, the largest crypto manager in the world, first filed with the Commission in October for a spot Ether ETF.

Several other companies were already awaiting a decision at the time, including BlackRock, ARK 21Shares and Fidelity.

Whale transactions 

The whales are investors, either individual or institutional, that have substantial amounts of capital available. Their transactions typically leave quite a mark on the marketplaces, which is why many investors are mindful of the ways and times when they trade. Based on their movements, those that own a smaller number of crypto get a better idea of when it’s an excellent time to buy or sell.

Over the past months, Ethereum has been growing steadily, which has naturally created movements within the ecosystem as well. One whale in particular has caught the attention of investors after it deposited almost 4,000 ETH to a well-known exchange platform. That is the rough equivalent of nearly $9 million. Currently, the whale owns 10,000 ETH coins, or $23.58 million.

The strategic movements of this whale investor could have both a positive and a negative impact on the marketplace. In the first scenario, a favorable outcome would lead to increased liquidity, which, in turn, supports more balanced prices. That would directly contribute to a healthier and much more stable market for Ethereum. The downside is that large transactions are also quite likely to introduce volatility into the sensitive crypto market.

Investors have already been struggling with long-term fluctuations for a while now, and user sentiment tends to be quite damaging when these conditions rule the crypto environment. However, the selling actions aren’t the domain of this lone whale investor. In fact, recent data has proven that many top addresses have been in decline when it comes to supply levels.

Institutional investors 

While the marketplace might indeed seem too volatile at the moment for individual investors afraid they’ll lose considerable amounts of capital, institutional traders appear to feel comfortable in the current environment. Current data shows that institutional buying is targeting the Ethereum shares and that the fact companies are willing to invest in others, such as Grayscale, is a clear sign that an asset is performing well.

In this case, it appears that Ethereum is doing much better than it had over the past eighteen months. A year ago, in December 2022, the Grayscale Ethereum Trust premium gap stood at -59.49% as a result of institutional buying. The negative values show that the shares are undervalued compared to the price of the Ether coin itself.

$3000 

Even though the outlook on Ethereum and all the other crypto coins remains uncertain since it is impossible to predict with total accuracy how cyber coins will evolve, many expect a bullish run to arrive relatively soon. The market has been bearish for a very long time, but that doesn’t mean the bulls haven’t gained strength. After every market in the crypto environment started recording upswings since the beginning of October, investors became convinced that a more robust trend is imminent.

The market sentiments have also become more positive after the slump of the past few months, leading some to estimate that the prices could climb up to $3000 and perhaps even exceed these levels in the first few weeks of 2024. Others are more skeptical, believing that the change will occur but that it will take several more months for Ethereum to get to that level. According to this view, any sudden gains are likely to be unsupported and, therefore, lost quite rapidly.

The bottom line 

As 2023 ends, many are wondering what the new year holds for investors and the cryptocurrency market. It’s essential to remain aware of the changes and shifts and try to avoid performing any transactions that carry a higher degree of risk. They’re less likely to pay off during this period, and you might record losses that disrupt your overall gain patterns.

Although cryptocurrencies have been growing and evolving quite a lot over the past years, they are still relatively new assets, and there will still be some time until they consolidate their position and become more stable. Until that happens, remember to follow the market movements and keep an eye on the news for any events that could change the course of cyberfinance markets.