Amidst a brutal cryptocurrency dip, the SEC has approved the first dual Bitcoin and Ethereum ETFs from Hashdex and Franklin Templeton, providing institutional access to the top two cryptos via spot-based investment vehicles.
Here’s what this significant development means for the cryptocurrency market.
How the dual ETFs get approved
In August 2024, Franklin Templeton submitted its S-1 application for a dual Bitcoin and Ethereum index ETF. Three months later, Hashdex followed suit with its own S-1 filing in October 2024.
Due to the SEC’s cautious approach to cryptocurrency regulation, it requested additional time to evaluate both proposals. This was to ensure compliance with existing financial regulations designed to protect investors from fraud and market manipulation.
In response to the concerns, both Hashdex and Franklin Templeton submitted amended filings.
Franklin Templeton’s updated proposal received accelerated clearance due to its alignment with existing commodity-based trust share standards. This made its path through regulatory scrutiny smoother.
Despite postponing Hashdex’s filings twice, recent regulatory changes by Nasdaq and Cboe BZX increased institutional interest in cryptocurrency investments and facilitated the listing of both funds.
Furthermore, significant price fluctuations for Bitcoin and Ethereum created urgency for regulated investment products that could provide stability and attract institutional investors.
Each ETF will primarily hold Bitcoin and Ethereum, with an initial average weighting of approximately 80% Bitcoin and 20% Ethereum.
Their primary focus will be spot-based investments instead of futures or staking, which comply with regulatory preferences for transparency and investor protection.
What do the ETF approvals mean for the market?
Today, Bitcoin has seen an over 8% drop from $105,000 to below $95,000, while Ethereum experienced a decline to $3440 due to heightened volatility. This volatility is a result of over $1 billion in liquidations in a single day.
The introduction of these ETFs hopes to enhance institutional access to cryptocurrencies. This could lead to increased investment flows to the cryptocurrency market.
Significantly, this approval could lead to other asset managers pursuing similar approvals. For example, BlackRock already has intentions to launch its own crypto index ETFs.
Litecoin and HBAR are also speculated to be next in line for an ETF because they are not classified as securities. This aligns with U.S. regulatory standards.
However, cryptocurrencies like Solana and XRP may continue to experience additional scrutiny due to regulatory uncertainty around their classification as securities and ongoing legal battles.
Price predictions for Bitcoin and Ethereum
BTC/USD (Source: TradingView)
At the time of writing, Bitcoin is trading at $93,941.30. If it continues to correct, its decline could retest the $90,000 level. The RSI is 37.45, below the neutral level of 50, pointing downwards, indicating bearish momentum.
However, if BTC closes above $100,000, it could rally and retest its all-time high (ATH) of $108,353.
ETH/USD (Source: TradingView)
Ethereum is trading at $3112.91. If it closes below $3,335, it would extend the pullback to retest its next daily support at $3,029. Its RSI is 30.49, which is below its neutral level of 50, pointing downwards and showing a strong bearish sentiment.
If it breaks and closes above the $3,522 level, it could extend its recovery to retest its $4,000 level.
Read more: Movement Crypto Price Climbs 16% as Analysts Set Sights on All-Time High
