That is a good question. The investment strategy after ETH spot approval may depend on several factors, such as the market reaction, the regulatory environment, the competitive landscape, and the innovation potential of Ethereum.
One possible scenario is that the approval of spot-based ETH ETFs will boost the demand and price of Ethereum, as more investors will have access to the cryptocurrency through a regulated and mainstream investment vehicle.
This could also increase the adoption and development of decentralised applications (DApps) and smart contracts on the Ethereum network, as well as upgrades, which aim to improve the scalability, security, and efficiency of the platform.
In this case, the investment strategy could be to buy and hold spot-based ETH ETFs, such as the Fidelity Ethereum Trust, the WisdomTree Ethereum Trust, or the BlackRock Ethereum Trust, which are some of the applications pending with the SEC. These ETFs would offer a more accurate and transparent representation of the underlying asset, as well as lower fees and risks than futures-based ETH ETFs.
Alternatively, investors could also buy and hold spot ETH directly, either through a crypto exchange or a wallet, if they are comfortable with the volatility, security, and custody issues of holding and storing Ethereum directly.
Another possible scenario is that the approval of spot-based ETH ETFs will trigger a sell-off and price correction of Ethereum, as some investors will take profits after the anticipation and speculation of ETH spot approval.
This could also expose the Ethereum network to more regulatory scrutiny and competition from other blockchain platforms, such as Cardano, Solana, or Polkadot, which claim to offer faster, cheaper, and more scalable solutions than Ethereum.
In this case, the investment strategy could be to sell short spot-based ETH ETFs. These ETFs would track the price of Ethereum by holding the actual cryptocurrency in their reserves rather than futures contracts or other derivatives.
Alternatively, investors could also sell and short spot ETH directly, either through a crypto exchange or a wallet, if they are comfortable with the volatility, security, and custody issues of holding and storing Ethereum directly.
Of course, these are just two hypothetical scenarios, and the actual outcome of the spot ETH ETF approval may differ depending on various factors. Therefore, investors should be prepared for various scenarios and adopt the appropriate strategies according to their risk appetite, time horizon, and market outlook.
Whether one is bullish or bearish on Ethereum, there are multiple ways to invest in the cryptocurrency after the spot ETF approval and potentially profit from the market movements of ETH spot approval.
The market reaction and implication of spot BTC ETF approval and spot ETH ETF approval can be compared and contrasted, as both are major events that could affect the price, liquidity, and adoption of the two largest cryptocurrencies by market capitalisation. The market reaction and implication of spot BTC ETF approval and spot ETH ETF approval could be similar. You take reference from NewsQuakes™ at Cointelegraph Pro and draw similarities.
The approval of spot ETH ETFs could boost the demand and supply of ETH, as more investors would buy ETH through the ETFs, and more ETH would be locked up in the ETF vaults. This could create a positive feedback loop that drives the price of ETH higher, as well as increase network security and decentralisation.
Moreover, the approval of spot ETH ETFs could enhance the credibility and legitimacy of ETH as a mainstream asset class and attract more innovation and development in the ETH ecosystem, especially in the areas of decentralised finance (DeFi) and non-fungible tokens (NFTs).
We encourage readers to conduct their own due diligence (DYOR) and to avoid being influenced by fear of missing out (FOMO) when investing in cryptocurrencies. Keep in mind cryptocurrencies are highly unstable and regarded as hazardous investments. This article is not intended to provide investment guidance and is only for informational purposes.
You have now till March to do your homework and plan your playbook.
Source: https://e27.co/what-are-the-possible-investment-strategies-after-eth-spot-approval-20240223/
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.