A Ethereum (CRYPT: ETH) exchange-traded fund (ETF) was approved this week, and that could open a floodgate of ETFs and financing for the crypto industry. At least that's what the market was speculating this week.
According to data provided by S&P Global Market Intelligence, Uniswap (CRYPT: UNI) rose up to 28% over the past week, while Lido staked ether (CRYPT: STETH) rose 25.3% and Decision (CRYPT: ARB) rose 17.9%. The three tokens are currently trading up 21.7%, 18.9%, and 11.2%, respectively, as of 3:30 pm ET on Friday.
Ethereum gets its ETFs
This week, the U.S. Securities and Exchange Commission, or SEC, approved an announcement Ethereum ETF, after the approval of bitcoin (CRYPT: BTC) ETF earlier this year. This was a bit surprising to the industry because there have been questions about whether or not Ethereum would be seen as a commodity or security. If it were a commodity, like Bitcoin, an ETF makes sense, but a security would not have been approved.
The approval of an Ethereum ETF indicates that Ethereum is a commodity and other crypto tokens are likely to follow the same path. We could see this opening the door to similar tokens that have similar features, such as the ability to implement smart contracts on the blockchain.
Dragging the industry forward
When Bitcoin ETFs were approved, the market rose a number of tokens. This week's move had the biggest impact on Ethereum-related tokens. Ethereum itself has risen 20.9% over the past week and broke out when speculation began to arise that ETF approval was near.
It's no surprise, then, that Lido Staked Ether did the same and Uniswap, which is a decentralized exchange on Ethereum, did too. Greater value and usage of Ethereum should be good for the ecosystem.
Arbitrum is a Layer 2 blockchain, meaning it is built on top of Ethereum and aims to make Ethereum โmore inclusive and sustainableโ with scaling technology. Like the other tokens created on Ethereum, an ETF could mean greater use of Ethereum and/or an ETF that includes tokens like Arbitrum in the future.
Rising tide lifts altcoin boats
Much like the run on Bitcoin earlier this year, the approval of the Ethereum ETF is sparking speculation about what's next from the SEC and the market. We know that Bitcoin ETFs attracted tens of billions of dollars of investment and it is possible that Ethereum, which is the second largest token by market cap, could do something similar. I don't think it will be as popular as Bitcoin, but any increase in funds flowing into the Ethereum ecosystem would be positive.
What's less clear is what's next, and that's where a lot of this week's speculation comes from. Are altcoin ETFs coming? Will meme coins get an ETF?
I think it's clear that the SEC is softening its objections to cryptocurrencies after losing several court battles, and that could open the industry to more funding and ultimately long-term use cases. This is extremely bullish for cryptocurrencies, but there will be a lot of volatility on the path to a sustainable industry.
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Travis Hoium has positions in Ethereum. The Motley Fool holds and recommends Bitcoin, Ethereum, and Uniswap Protocol Token. The Motley Fool has a disclosure policy.
Why Crypto Altcoins Appeared This Week was originally published by The Motley Fool
