On Monday, the price of Ethereum surged to $3,900, buoyed by a wave of bullish sentiment among investors.

Ethereum (ETH) is on track to surpass the $4,000 mark even before the launch of spot Ethereum exchange-traded funds (ETFs) as the market appears to be highly “underallocated,” according to DeFiance Capital founder Arthur Cheong.

4.5k before spot ETF go live for trading imo.

— Arthur (@Arthur_0x) May 26, 2024

In a post on social media platform X on May 26, Cheong projected that Ethereum, the second-largest cryptocurrency by market value, could climb to $4,500 ahead of the ETF trading launch. To back up his statement, Cheong cited a poll indicating that nearly 50% of respondents have allocated only up to 25% of their portfolios to Ethereum, suggesting the market may be underestimating its potential.

ETH as a percentage of your crypto portfolio now

— Arthur (@Arthur_0x) May 25, 2024

The U.S. Securities and Exchange Commission (SEC) approved multiple spot Ethereum ETFs on May 23, following a series of delays. This decision has heightened investor expectations that traditional market participants will inject new capital into Ethereum, mirroring the surge seen with spot Bitcoin ETFs that helped BTC set a new all-time high in March at $73,750.

However, ETF issuers still require the SEC’s approval for their registration statements, which detail investor disclosures. Unlike exchange filings, there is no set timeline for the SEC to approve these statements, creating uncertainty about the launch date for trading.

While a Reuters source familiar with the matter indicated the trading approval process could take days or weeks, without providing specific details. Former SEC Chairman Jay Clayton, in an interview with CNBC, stated that the start of spot ETH ETF trading is a matter of when, rather than if, describing it as “inevitable” but acknowledged there are still some unresolved issues. As of press time, Ethereum is trading at $3,910, according to data from CoinGecko.