The price of Ethereum's native token, Ether (ETH), experienced marginal gains on October 2, driven by the anticipation of institutional investor inflow following the launch of an exchange-traded fund (ETF) linked to Ether futures on traditional stock market exchanges. The adoption of the Ethereum network by traditional financial institutions for real-world tokenized assets (RWA) also positively impacted investor sentiment. Despite initial disappointment in the trading performance of Ethereum futures instruments, the creation of regulated investment vehicles for institutional investors is seen as a positive development. UBS, a Swiss bank, launched a live pilot for tokenized real-world assets on the Ethereum blockchain, further validating investor confidence in Ethereum's capabilities.
Ethereum Price Rises Amid Launch of Ethereum Futures ETF and Institutional Adoption Signals
The price of Ethereum's native token, Ether (ETH), saw marginal gains on October 2, driven by the anticipation of institutional investor inflow following the launch of an exchange-traded fund (ETF) linked to Ether futures on traditional stock market exchanges. The adoption of the Ethereum network by traditional financial institutions for real-world tokenized assets (RWA) also positively impacted investor sentiment.
Eric Balhunas, a senior ETF analyst at Bloomberg, expressed disappointment with the initial trading performance of Ethereum futures instruments listed on October 2 by VanEck, ProShares, Valkyrie, and Bitwise in a post on the X social network. Despite the initial disappointment, Ethereum enthusiasts are pleased with the ETFs as they have created a fully regulated investment vehicle for institutional investors who previously lacked access to cryptocurrency markets.
On October 2, Swiss bank UBS announced the launch of a live pilot for tokenized real-world assets (RWA) on the Ethereum blockchain. This initiative, led by Singapore's central bank, involves UBS Asset Management issuing tokens representing shares of a money market fund. This event further validates investor confidence in the Ethereum network's smart contract processing capabilities and security, contributing to the positive momentum in Ether's price.
Crypto asset manager Grayscale has submitted an application to the U.S. Securities and Exchange Commission (SEC) seeking approval to transform its Ethereum Trust into a spot Ethereum ETF. Grayscale's Ethereum Trust (ETHE) was initially launched in March 2019 and currently boasts a net asset value of $4.9 billion, equivalent to 2,981,563 ETH held within its structure.
Ethereum's price increase on October 1 coincided with short liquidations totaling $23 million in Ether futures contracts, while only $2.4 million worth of long positions were liquidated during the same 12-hour period. Short sellers were forced to close their positions, leading to a momentary spike to $1,755 on October 1, marking the highest level in 45 days. Ethereum bulls have reasons to feel more optimistic, as a new avenue for investment through traditional stock market brokers has emerged, along with the increasing potential for real-world asset tokenization on the Ethereum blockchain.
(MARCEL PECHMAN, COINTELEGRAPH, 2023)