Ethereum ETF Unleashes Billions… Here’s How to Play It

|May 28, 2024
Ethereum coin against the background of the graph of price changes on the crypto exchange

I hope you’ve been buying the crypto dip.

Because it looks like the next leg up is about to begin thanks to a catalyst you’re probably familiar with.

Here’s what’s going on…

Did you see Ethereum (ETH)’s price skyrocketed 20% in a single day last week?


It was thanks to speculation from Bloomberg Analytics that a new spot Ethereum ETF would soon be approved.

And sure enough… on Thursday the SEC approved nine spot ETFs for trading on the Nasdaq, CBOE and NYSE.

US SEC approves exchange applications to list spot ether ETFs

As someone who’s owned Ethereum since 2017, I’m obviously happy.

But anyone new to crypto should be jumping for joy as well, as this could be the catalyst crypto needs to head higher.

Why an Ethereum Spot ETF Matters

The approval of these Ethereum spot ETFs marks a significant milestone for the cryptocurrency market.

Unlike futures-based ETFs, a spot ETF directly holds Ethereum, providing investors with a more straightforward and transparent way to gain exposure to the digital asset. This could attract a broader range of investors… including institutions that have been hesitant to invest in crypto through less direct means.

These ETFs will also enhance liquidity in the market, making it easier for large investors to buy and sell Ethereum without significantly impacting its price. Increased liquidity tends to reduce volatility. The crypto market will become more stable and attractive to both retail and institutional investors.

Until recently, U.S. regulators have fought tooth-and-nail to make sure such ETFs would not be approved. Their reasoning was primarily concerns over market manipulation, lack of investor protections, and the unregulated nature of many cryptocurrency exchanges.

But then the floodgates opened with the approval of the Bitcoin (BTC) spot ETFs in January.

Since then, more than $10 billion has flooded into these funds. That’s a key reason the entire crypto market has added nearly $1 trillion in market cap over the past six months.

Crypto Total Market Cap

And it looks like the Ethereum ETF approval could kick off a similar rally.

But this time, I expect altcoins to benefit the most.

“Alt Season” Is Upon Us

No question Ethereum will benefit from the approval of a spot ETF. But the positive impact is likely to extend to altcoins as well.

Historically, when major cryptocurrencies like Bitcoin or Ethereum rally, they often pull the rest of the market up with them. This phenomenon is known as the “alt season,” where investors seek out higher returns in smaller, more volatile coins once the larger assets have shown substantial gains.

Altcoins like Solana (SOL), Chainlink (LINK) and Cardano (ADA) could see significant price increases as investors look to diversify their portfolios and capture the next wave of growth in the crypto market. These assets often benefit from the increased attention and investment flowing into the crypto space following significant developments like an ETF approval.

If you’ve been reading my work, you should already have plenty of exposure to Ethereum and high-quality altcoins. And hopefully you’ve made some money from the latest rally from these positions alone.

But if you’re new to crypto, here’s what you need to do to profit from this trend.

Your Complimentary Crypto Strategy

Given the impact of these Ethereum spot ETF approvals, investors should consider positioning themselves to take advantage of the anticipated market rally.

Here are a few strategies to consider…

  1. Increase Ethereum Holdings: Ethereum has a central role in this catalyst. Increasing your exposure to Ethereum could be a prudent move. This digital asset is likely to see the most immediate and substantial gains.
  2. Diversify With Altcoins: Look for altcoins with strong fundamentals and growing ecosystems. Coins like Solana, Chainlink and Cardano are prime candidates that could benefit from the ripple effects of an Ethereum rally.
  3. Long-Term Perspective: While short-term gains can be enticing, keeping a long-term perspective will help you navigate the inevitable volatility of the crypto market. Focus on assets with strong use cases and robust communities.

The approval of a spot Ethereum ETF is a huge opportunity for the crypto market. It could trigger the next leg up in the current bull market, driving substantial gains for Ethereum and the broader altcoin space. By understanding the implications of this development and positioning your portfolio accordingly, you can capitalize on the expected surge in market activity.

Stay informed, stay invested and, as always, keep your eyes on the long-term potential of your holdings.

The crypto market is poised for exciting times ahead, and those who prepare wisely stand to benefit the most.

Robert Ross
Robert Ross

Robert Ross’s unique style of clear and direct stock research helped him build a massive following in the investment research industry, starting his career at investment research company Mauldin Economics and quickly rising through the ranks to become one of the youngest chief analysts in the industry. Today, over a million investors turn to Ross every month for his take on investing, economics, and personal finance. He now shares his unique insights in Total Wealth and Manward Money Report.