The much-anticipated spot Ethereum (ETH) exchange-traded fund (ETF) could be launched as early as July 23, according to industry experts. Similar to the launch of 11 spot Bitcoin (BTC) ETFs in January, the resulting surge in demand could drive ETH prices higher, but the gains may not be as dramatic as those of Bitcoin, which hit a record high after its spot ETF was launched. The scale of such success may have less impact on Ethereum than on Bitcoin.

Bitcoin was the pioneer. Bitcoin is primarily a financial asset used as a safe haven, while Ethereum’s value is derived from the activity of developers on its platform.

Ethereum’s latest developments began in late May when the U.S. Securities and Exchange Commission (SEC) unexpectedly approved Form 19b-4s for spot Ethereum ETFs from BlackRock, Bitwise, Grayscale, Van Eck, Ark 21Shares, Fidelity, Franklin Templeton, and Invesco Galaxy. These forms are a key part of the SEC’s pre-qualification process for ETF approvals.

Now, these entities need to submit a final S-1 form by today, which, if approved, would approve the listing of a spot Ethereum ETF as early as next Tuesday, which could be a boon to ETH investors.

“ETFs are likely to see a lot of inflows,” cryptocurrency investor Lark Davis told Unchained. Even if there is some price volatility in the first day or two of these products coming to market, positive factors are converging.

Ethereum prices rose about 30% to $3,943 around the time of the 19b-4 approval, before falling below $3,000 earlier this month, according to CoinMarketCap data. Ethereum is currently trading at around $3,445, up more than 12% from last week.

Pedro Lapenta, head of research at Hashdex, an investment firm that manages a bitcoin futures ETF, expects Ethereum ETF inflows to reach about $5 billion by the end of 2024. However, Lapenta told Unchained that sustained price action may take time.

We believe that the price of ETH will react positively in the short term, and the true impact of these ETFs on price will be apparent over a longer time frame.

The Trump factor

The entire cryptocurrency market was also boosted by the prospect of a Donald Trump presidency, with Trump leading in the polls over incumbent Joe Biden after a thwarted assassination attempt on Saturday.

Trump, who has previously been critical of cryptocurrencies, has said he would be a pro-cryptocurrency president if he wins the November election, and in May he became the first major presidential candidate in U.S. history to accept a cryptocurrency donation.

However, Bill is skeptical about the impact of a potential Trump victory on long-term cryptocurrency prices, noting that the U.S. president frequently breaks his campaign promises.

I’d like to believe that Trump will continue to support cryptocurrencies once he takes office, but unfortunately, I have no reason to believe that.

If the spot ether ETF launches next week, it would come ahead of the annual Bitcoin conference in Nashville on July 24, where Trump is scheduled to be a special guest. Trump has confirmed that he will speak at the conference despite the injuries he sustained in the assassination attempt.

The controversial former president has received $1.8 million in Bitcoin donations and nearly $1 million in Ether, according to the Wall Street Journal. He also launched the "Mugshot Edition" NFT last year after being indicted for election fraud, in addition to his other collections, including NFT collections of President Trump and Donald Trump Jr., according to NFT website nftevening.com.

Conversely, many believe that President Joe Biden is completely against cryptocurrencies, as the SEC has taken a hostile stance toward many cryptocurrency companies during his administration. Biden himself vetoed a proposal to repeal SAB 121 — an SEC accounting rule that made it onerous for banks to serve cryptocurrency customers.

Prior to the veto, Trump’s campaign appeared to criticize Biden’s stance on cryptocurrency regulation, touting Trump’s record on “financial technology innovation” while slamming Biden’s stricter cryptocurrency policies.

Unlike Beal, Davis told Unchained that he hopes Trump will follow through on his promises on cryptocurrency.

“I think the White House could make some very positive cryptocurrency announcements and regulations,” Davis said. “It’s a weirdly bullish moment for the market.”

Regardless of the election results and the resulting crypto regulatory landscape, most analysts agree that a spot Ethereum ETF would boost ETH’s price in the long term, even if prices are volatile soon after launch.

“Regardless of the short-term price action for BTC and ETH, we believe the long-term investment case for cryptocurrencies remains as strong as ever,” Lapenta said. “Current prices could offer an attractive entry point for long-term investors.”