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In recent weeks, the price of Ethereum (ETH) has been stable, even with positive updates related to BlackRock’s Ethereum ETF and the US Securities and Exchange Commission’s (SEC) engagement with issuers.

A key factor in this movement may be the reallocation of investor capital to DeFi tokens. Apparently, they are hoping for a higher return if the launch of Ethereum spot ETFs drives the market higher.

Current price action suggests a mix of profit-taking and buying by investors. This is confirmed by the large inflows and outflows of ETH on exchanges, according to Whale Alert.

Michael Ebiekutan’s technical analysis indicates that Ethereum could see further price gains as other issuers update their S-1 applications. This could allow ETH to face resistance at $4,093, which has proven difficult to overcome in recent days. Support at $3,605 could hold strong in case of decline.

“The reallocation of capital to DeFi tokens reflects investors’ search for higher return opportunities, taking advantage of the volatility and growth potential of this sector,” he said.

On Wednesday, BlackRock filed an updated Form S-1 for its Ethereum ETF, according to information on the SEC website. This update comes following the SEC’s approval of 19b-4 applications from eight issuers, including BlackRock’s iShares Ethereum Trust.

Expectations for Ethereum ETFs

National exchanges, such as NASDAQ or the New York Stock Exchange (NYSE), submit Forms 19b-4 to the SEC to obtain approval to list new products on their trading platforms. The S-1, on the other hand, is the initial registration form that details how a fund will be managed and how it will track the price of the underlying asset.

The SEC must approve S-1 applications before ETFs can be officially launched. BlackRock’s update revealed the iShares Ethereum Trust ticker as ETHA. Furthermore, it mentioned important details about the seed capital investor.

“On May 21, 2024, the Early Equity Investor, an affiliate of Sponsor, subject to conditions, purchased the Initial Creation Baskets comprising 400,000 Shares at a price per Share equal to $25.00,” BlackRock stated in your document.

Additionally, BlackRock updated the Authorized Participants (APs) for the ETF, replacing JP Morgan with BMO Capital Markets Corp. An AP is a financial institution — often a bank — that provides liquidity to facilitate the creation and redemption of ETF shares.

According to Bloomberg analyst James Seyffart, BlackRock’s latest update confirms that the SEC and issuers are working toward the launch of Ethereum spot ETFs.

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