Analysts unanimously believe that although the cryptocurrency market has been plagued by poor liquidity, social sentiment can be a useful tool for tracking discussions around Ethereum's potential spot ETFs21Shares and ArkInvest jointly applied for Ethereum spot ETFs this month, which may have a profound impact on the US cryptocurrency market. Industry analysts quickly expressed their views on the broader impact
Analysts unanimously believe that although the cryptocurrency market has been plagued by poor liquidity, social sentiment can be a useful tool for tracking discussions around Ethereum's potential spot ETFs
21Shares and ArkInvest jointly applied for Ethereum spot ETFs this month, which may have a profound impact on the US cryptocurrency market. Industry analysts quickly expressed their views on the broader impact.
Sacha Ghebali, Director of Strategy at TheTie, believes that the document may trigger a significant influx of capital into Ethereum. This is because financial advisors often allocate a significant portion of their AUM to ETFs.
Ghebali stated that although Bitcoin (BTC) has attracted attention primarily as a means of storing value, in contrast, Ethereum (ETH) may emerge as an "infrastructure game", emphasizing its role in providing power for a wide range of decentralized applications and services.
However, Conor Ryder, the research and data director of encryption infrastructure company Ethena, stated that Ethereum's regulatory path is still full of complexity.
In order to obtain approval, Ethereum ETFs need to showcase market characteristics comparable to Bitcoin, such as liquid spot and futures markets and listing on regulated exchanges such as CME.
It is worth noting that according to TheTie's data, the announcement of the Ethereum spot ETF application did not cause a significant shift in Ethereum's social media sentiment. Nevertheless, Ghebali and Ryder both agree on the importance of social media in shaping the dynamics of the cryptocurrency market.
Although there have been no significant short-term emotional fluctuations, social media remains a valuable measure of the potential for a project to be accepted by the mainstream. They stated that this in turn will affect the prices of assets.
Ghebali pointed out that although the number of tweets and sentiment data significantly increased after the ETF filing, this does not indicate a sustained change in long-term sentiment regarding prices.
Analysts believe that this indicates that although the news has attracted attention, it may not be the only determining factor for Ethereum market behavior in the short term.
As for the market outlook for the rest of this year, Ryder warns that the current low liquidity environment makes short-term price forecasting particularly challenging. He added that when the depth of orders is not significant, prices often fluctuate.
Nevertheless, Ghebali and Ryder both have long-term bullish prospects for the world's second largest digital asset and the broader encryption market. They expect that once Ethereum clears the remaining regulatory barriers, the next wave of capital will enter the field and drive further growth.
Ghebali said, "Although people generally believe that Bitcoin is not a security, the fate of ETH seems unclear, especially due to its pledge mechanism and leadership dynamics in protocol development
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