The market has largely anticipated a rejection for the initial set of Ethereum ETFs, but there’s optimism about a potential approval next year, according to one fund manager.
As Asia’s business week begins, both Ethereum (ETH) and Bitcoin (BTC) are trading flat. Traders are focused on the upcoming ETH ETF decision and Nvidia’s earnings this week.
Early Monday, the crypto market remained subdued with Bitcoin, the largest digital asset by market value, trading flat at $67,156 and Ether at $3,127.
This period of consolidation follows a week of bullish action driven by renewed optimism about a U.S. rate cut and a rally in the stock market.
Activity could pick up with the first decisions on Ether exchange-traded funds (ETFs) approaching. The Securities and Exchange Commission (SEC) is set to decide on VanEck’s Ether ETF on May 23 and the Ark/21Shares ETF on May 24. Nvidia’s earnings report is also due this week.
March Zheng, managing partner of Bizantine Capital, mentioned in an interview that while the market has nearly priced in a rejection, there are still reasons for optimism.
“There are reasons to believe that the report will contain silver linings for the delay, which should signal an eventual approval of Ethereum next year,” Zheng said. “The removal of staking propositions by filers reclassifies underlying ETH as commodities supported by the CFTC and can pave a major pathway going forward.”
Polymarket currently gives a 10% chance of an Ether ETF being approved by May 31, a 13% chance by June 30, and a 28% chance of approval this year.
Recently, Coinbase analyst David Han noted that the market might be underestimating the timing and odds of a potential approval.
Zheng argued that positive ETH ETF news might also boost trading sentiments for BASE, a Layer-2 network, whose native token’s price has dropped by nearly 25% in the last two weeks.
Traders are also closely watching Nvidia’s earnings, scheduled for Wednesday.
Bitcoin trades strongly in correlation with Nvidia, as do Artificial Intelligence-themed tokens, which surged in February after the chip designer reported better-than-expected earnings.
While the direct correlation between Nvidia and Ether market movement isn’t as strong as it was during the mining boom, a positive outcome from Nvidia’s earnings could lift the entire crypto market, including Bitcoin and AI tokens.
