Ethereum price rose for the second day in a row after the US published strong consumer price index (CPI) data. The crypto rose to a high of $1,595, a few points above this week’s low of $1,530. Despite the rebound, Ethereum has dropped by more than 25% from its highest level this year.
Franklin Templeton became the first major financial services firm to apply for a Bitcoin ETF. Other Wall Street firms that have also applied for one include Blackrock, Invesco, Ark Invest, and Fidelity. It is believed that these companies have a higher chance of gaining the approval since they have implemented strict surveillance measures to prevent market manipulation.
Two weeks ago, the Securities and Exchange Commission (SEC) suffered a major setback when Grayscale won a major lawsuit in the US. Analysts are optimistic that the regulator will grant the approval to avoid another embarrassment.
The approval of a Bitcoin ETF could be positive for Ethereum, the second-biggest cryptocurrency in the world. It is likely that the companies that have applied for the ETF will come back with an ETF that tracks Ethereum. This could explain why the discount of Grayscale’s Ethereum Trust (ETHE) to NAV has narrowed recently. Ark Invest, owned by Cathie Wood, has also applied for an Ethereum ETF.
The strong US inflation data published recently could have an impact on Ethereum. The headline inflation jumped to 3.7% in August, the biggest increase in months. Core inflation, which excludes volatile products, fell to 4.3%.
These numbers mean that the Federal Reserve could deliver another 0.25% interest rate hike next week. This is usually not good news for Ethereum as the coin tends to perform poorly when the Fed is hiking interest rates. Moreover, higher inflation rates lead to higher cash returns, and this could lead to an increased move from Ethereum to cash. Cash yields are now higher than most Ethereum DeFi products like Aave, Compound, and Maker. Consequently, the total value locked (TVL) in Ethereum’s DeFi protocols has dropped by 11% in the past 30 days to $55 billion.
To buy Ethereum, you can use eToro, an investing platform that allows you to invest stocks, ETFs, crypto, and alternative assets like fine art and collectibles—all in one place. Another option is Public, which offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs.