Ethereum ETFs to Play Crucial Role in Crypto Market Growth

As the market anticipates the US Securities and Exchange Commission’s (SEC) final decision on a spot Ethereum exchange-traded fund (ETF), experts believe these products will attract new investment and attention to the industry.

On July 12, Kraken’s Head of Strategy, Thomas Perfumo, told Bloomberg that Ethereum ETFs will elevate the market.

ETF Approval Could Push Ethereum to New Highs

Perfumo identified Ethereum ETFs as a key catalyst for the crypto industry in the latter half of this year. The other drivers include the upcoming US elections, potential interest rate cuts, and the global adoption of Bitcoin ETPs.

Perfumo said the approval of Ethereum ETF products would be a significant moment for the industry. He noted that the ETFs would bring in capital and renewed interest, benefiting the entire market.

He predicted that Ethereum ETFs could see monthly inflows ranging from $750 million to $1 billion. If these inflows surpass expectations, they could push ETH’s price to a new all-time high between $4,000 and $5,000.

“I think the market is priced in something along the lines of $750 million to $1 billion of net inflows to Ethereum ETF products every month and so if we try to match that, it creates positive support for the industry,” Perfumo stated.

Read more: Ethereum ETF Explained: What It Is and How It Works

Reflecting on Bitcoin’s previous all-time high, Perfumo noted that the market lacked extreme volatility and an influx of new users. He said this showed that peak momentum had not been reached and there was room for growth.

“When I look at the prior all-time high back in March for Bitcoin, that’s what I’m calling a quiet peak. We didn’t see similar levels of extreme volatility or similar levels of unprecedented volatility of signups on our platform to suggest that you really had a peak momentum of people, tens of millions, hundreds of millions of people coming into the industry for the first time,” he added.

Meanwhile, Perfumo emphasized that the upcoming US elections will shape the future of crypto for the next four years. Indeed, crypto has emerged as a major political issue in the current electoral cycle. The two leading candidates —former President Donald Trump and President Joe Biden— have adopted different approaches toward the sector, eliciting strong reactions from the community.

Read more: How to Invest in Ethereum ETFs?

However, Perfumo emphasized that the legislative arm plays a crucial role in the US crypto industry because it develops regulatory clarity, which aids growth. He noted that US lawmakers have shown support for crypto with their bipartisan backing for major regulations like the Financial Innovation and Technology for the 21st Century Act (FIT21) and efforts to overturn the controversial SEC’s Staff Accounting Bulletin 121 (SAB 121).

“When it comes to the US, specifically, it is really about legislative action and developing clarity for this industry…the Republican side of things seems to be more pro-crypto, more progressive in that sense,” he noted.