The Nasdaq Stock Market LLC has filed a 19b-4 form with the U.S. Securities and Exchange Commission (SEC) to list and trade Grayscale’s Spot Hedera Exchange-Traded Fund (ETF). This move marks a pivotal moment for the cryptocurrency ecosystem, especially as institutional interest in crypto assets continues to surge. But for Hedera (HBAR), will this filing translate into positive momentum, or is the altcoin facing a rough road ahead?

Nasdaq’s 19b-4 Filing and Its Significance

The filing of the 19b-4 form is part of the process that could eventually lead to the listing of Grayscale’s Hedera ETFs. Typically, this filing marks the second phase before the SEC officially acknowledges the application. Once acknowledged, it is published in the federal register, awaiting the SEC’s approval. This filing follows closely on the heels of another Hedera ETF application submitted by Nasdaq on behalf of Canary Capital.

The timing of this filing is crucial, as it positions Hedera’s network and ecosystem progress as key factors that could sway the SEC’s decision. If approved, the ETF would allow investors to gain exposure to Hedera without directly owning HBAR, potentially broadening the cryptocurrency’s appeal to a larger pool of institutional investors and those seeking exposure to digital assets without the complexities of direct crypto ownership.

HBAR’s Struggles Despite ETF Buzz

Despite the optimism surrounding the potential approval of Hedera’s ETFs, the price of HBAR has continued to decline. Over the past 24 hours, the altcoin dropped by 9.18%, trading at $0.2272 at the time of writing. This sharp decline raises questions about the immediate impact of the ETF filing on HBAR’s price.

One major concern for Hedera has been the continued decline in network activity. Over the last three months, the number of active accounts on the Hedera network has plummeted by 93%, dropping from 621,000 to just 39,000. This steep decline in network usage signals a slowdown in Hedera’s adoption, which could have long-term consequences for its growth and stability.

Despite these challenges, the potential introduction of the Hedera ETF could provide a lifeline. Although the ETF would not directly increase the use of Hedera’s network, it could help drive demand for HBAR by offering investors indirect exposure to the token. The more institutional money that flows into these ETFs, the greater the demand for HBAR could become, which may ultimately impact its price.

Bearish Market Sentiment and Investor Behavior

The immediate reaction to the ETF news has been far from positive for HBAR. As mentioned, HBAR’s price has declined by over 9% in a single day, despite the potential catalyst of the ETF filing. The downturn reflects broader bearish sentiment in the market, compounded by recent investor behavior.

Hedera’s aggregated Open Interest (OI)—a key indicator of the volume of active positions—has also dropped significantly, from $145 million to $103 million in just one day. This sharp decrease in OI suggests that many investors are either closing their positions to lock in profits or are being liquidated as the market retraces. This behavior underscores a lack of confidence in HBAR’s short-term price movement, as many investors expect further declines.

The current market sentiment, characterized by fear and uncertainty, is likely weighing on investor sentiment surrounding the Hedera ETF. While the ETF filing may represent a long-term opportunity for HBAR, its impact on the price is not expected to be immediate. Investors appear to be adopting a cautious approach, preferring to wait for SEC approval before making substantial investments.

What Does the Future Hold for HBAR?

In the short term, the outlook for HBAR remains bearish. If market conditions persist, HBAR could face further declines, potentially dipping to $0.21. However, if investors start viewing the ETF filing as a positive signal and begin accumulating positions, HBAR could see a reversal and reclaim the $0.25 level.

For the time being, Hedera’s future largely depends on broader market sentiment and the outcome of the SEC’s review of the ETF filings. If approved, the ETFs could help drive demand for HBAR, but the market is unlikely to see a significant price boost until the approval process is complete.

Conclusion: Will the ETF Approval Be a Game Changer?

The filing by Nasdaq to list Grayscale’s Hedera ETFs marks a key milestone in Hedera’s journey toward mainstream adoption. However, despite this positive development, HBAR continues to struggle with bearish sentiment, driven by declining network activity and investor caution.

While the ETF could eventually play a pivotal role in boosting demand for HBAR, its impact on the token’s price will not be immediate. Investors will need to wait for SEC approval and for broader market conditions to improve before HBAR can see any meaningful recovery. Until then, the cryptocurrency’s price will remain highly sensitive to market sentiment and investor behavior.