Vertex CEO says altcoins could benefit from spot Ethereum ETFs going live

The anticipated launch of Ethereum ETH -1.74% spot exchange-traded fund (ETF) trading on Tuesday may not been priced in, and the market could be caught off guard by an upward price swing by ether, an analyst said.

"Given the turmoil and lack of clarity around the launch of spot Ethereum exchange-traded funds, it feels like the market is not fully pricing in the impact of ETFs and that we could easily see gains of 25% plus," Darius Tabai, CEO of orderbook DEX Vertex Protocol and former Merrill Lynch Credit Suisse trader, told The Block.

Tablai added that if a move upward by ether is sustained he expects it to have a potential halo effect for altcoins. "This would be in contrast to the spot bitcoin ETF launch where altcoins really struggled to maintain a bid," Tablai added.

Spot Ethereum ETFs will likely begin trading on Tuesday, July 23, according to multiple sources, including Bloomberg Intelligence ETF analyst Eric Balchunas. "Hearing SEC finally gotten back to issuers today, asking them to return final S-1s on Wed (incl fees). And then request effectiveness on Monday after close for a Tuesday 7/23 launch," Balchunas posted on X Monday. After Balchunas posted on X.com naming Tuesday as the launch date, sources at two issuers confirmed to The Block the information he conveyed.

Spot Ethereum ETFs could still be hit by summer lull

There are contrasting opinions on the impact of ETFs on ETH’s price. According to YouHodler risk manager Sergei Gorev, the launch of spot Ethereum ETF trading may not have the same effect on the market as spot bitcoin ETFs had in January of this year, which saw the digital asset’s value rise by over 80% in just under two months.

"In terms of popularity, ether is still the second coin, and the issue of coin staking still needs to be fully resolved. Many investors will not be happy to give up the reward for staking since, in the current situation, staking will not be available for investing in ETFs on Ethereum," Gorev told The Block.

Gorev added that timing also plays a role in the initial success of ETF trading. "It is summer right now, and many investors are on vacation, and since the beginning of summer, trading volume on spot exchanges has decreased by an average of 17%," Gorev said.

The YouHodler risk manager did have one positive driver in contrast to the negatives he proposes. "Ethereum is rather a deflationary coin, the amount of which is slowly decreasing in the total mass, plus, Ethereum has no pressure from miner sellers, who are always present in bitcoin trading," he said.

According to  The Block's Price Page , the price of ether has increased by over 10% in the past week, and was changing hands for $3,396 at 5:05 a.m. ET.