Ethereum’s (ETH) price has failed to make any significant rally following the Securities and Exchange Commission’s (SEC) approval of the Spot Ethereum ETFs. This is undoubtedly surprising, given that the approval was expected to spark a massive price surge for the second-largest crypto token. 

Why ETH’s Price Has Failed To Rally

Ethereum’s price may have failed to rally because the crypto token was already priced into the news about a potential approval. It is worth noting that ETH’S price rallied by almost 20% earlier this week when Bloomberg analysts Eric Balchunas and James Seyffart increased their approval odds from 25% to 75%, suggesting that approval was almost likely. 

Therefore, this could have turned out to be a typical ‘sell the news’ event, with many traders currently taking profits from their earlier ETH investments. NewsBTC reported that Ethereum whales had bought over 110,000 ETH ($341 million) between May 19 and 20 as they positioned themselves ahead of any news regarding a potential approval of these funds. 

Meanwhile, historically speaking, this could have been expected from ETH’s price, considering that Bitcoin (BTC) experienced a significant drawdown following the approval of the Spot Bitcoin ETFs. 

However, it is worth mentioning that unlike the Bitcoin ETFs, which began trading immediately, these Spot Ethereum ETFs won’t start trading just yet. The SEC only approved the exchange filings (19b-4s) and will still have to approve the registration filings (S-1s) for these funds to begin trading. 

The fact these Ethereum ETFs won’t begin trading just yet could be another reason why ETH’S price hasn’t reacted positively to this development. As such, approval of the registration filings, which may take weeks or months, may be needed to spark another rally for Ethereum and other altcoins by extension. 

A key positive is that ETH is up by over 28% in the last seven days, which is a big deal considering that the crypto token has lagged for a while now and failed to match up with other major-cap crypto tokens. 

Another Reason To Be Bullish On Ethereum

The approval of the Spot Ethereum ETFs is a clear indication that the SEC doesn’t consider ETH a security, contrary to earlier reports that the Commission might have held this belief for some time now. 

TuongVy Le, a General Counsel at Anchorage Digital, noted in an X (formerly Twitter) post that funds whose assets are 40% or more securities may not register through a form S-1 but through Form N-1A or N-2.

Therefore, if the SEC considered ETH a security, it would have rejected the S-1 filings made by the various fund issuers like BlackRock since these Ethereum ETFs will hold ETH as their major assets. 

At the time of writing, ETH is trading at around $3,803, according to data from CoinMarketCap.