Ethereum (ETH) Could Crash If Spot ETF Gets Approved
Andrew Kang, founder and partner of Mechanism Capital, has expressed concerns about the potential negative impact of the forthcoming approval of spot Ethereum ETFs in the US on Ethereum’s market value.
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Kang warns that unless Ethereum significantly enhances its economic mode, the introduction of these ETFs could result in a sharp decline in ETH prices, triggering a “Sell the news” effect upon final approval.
In a recent X post, Andrew Kang noted that while the approval of spot ETH ETFs opened the door for many new buyers to make Bitcoin allocations within their portfolio, the impact of ETH ETFs is a lot less clear-cut.
Kang explained that there is less incentive for investors to convert their ETH to ETF format, as Ethereum (ETH) attracts less institutional interest than Bitcoin (BTC) and the network cash flows are not impressive, all of which support his prediction of a 30% drop in price.
He also pointed out that it wasn’t the approval of spot BTC ETFs that pushed BTC price from $40,000 to $65,000; instead, there was an increase in spot market buyers. He described Bitcoin as an asset that “has truly become validated globally as a key portfolio asset as many structural accumulators citing examples such as Michael Saylor’s MicroStrategy, stablecoin issuer Tether, HNWI retail, and others. While ETH also has some structural accumulators, Kang believes their magnitude is much less than that of BTC.
Kang believes that Ethereum (ETH) will trade in the range of $3,000 tp $3,800, and as Bitcoin rises, it will partially lift ETH. However, he anticipates that after the approval of ETH ETFs, Ethereum will trade between $2,400 and $3,000. If Bitcoin approaches $100,000 in late 2025, there is a chance that ETH will also reach new highs.
Recently, the SEC approved 19b-4 filings for spot ETH ETFs, but the S-1 filings have yet to be approved.
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