Markets

3 Questions About SEC’s Abrupt ETH ETF Approval

Published

8 months ago

26 May, 2024

3 Questions About SEC’s Abrupt ETH ETF Approval

The US Securities and Exchange Commission (SEC) confirmed yesterday that it has approved critical rule changes for allow exchange-traded funds containing Ethereum’s native token, ETH. Many people were taken by surprise, considering that last week almost everyone – from Bloomberg analysts to the forecast markets – thought it was a lost cause.

Note: The opinions expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

It never made sense to me why SEC Chairman Gary Gensler would resist approving these spot ETH products, considering how embarrassed the agency was during its proactive fight for the listing of bitcoin ETFs.

Recall that a three-person panel of judges on an appeals court called the SEC’s reasoning for denying (and denying and denying) bitcoin spot funds “arbitrary and capricious” as it had previously approved bitcoin futures products that did substantially the same thing. The same situation has has been true for ETH as well, and it’s likely that some firm would have been happy to litigate the issue in the same way that the Digital Currency Group fought for bitcoin ETFs.

This time, the SEC’s decision seems equally arbitrary, just in the opposite direction. On a interview with CoinDesk’s Jesse Hamilton Hours before the approval became public, Gensler said he would follow “how the courts interpret the law” and that “the D.C. Circuit took a different view, and we took that into consideration and changed.”

So why now? What does this mean for Ethereum going forward? And does this bode well for other cryptocurrencies?

As many have already noted, it appears that there has been a sea change regarding the regulatory situation in crypto. On Thursday, the House held a historic vote to approve the most substantive piece of cryptocurrency-specific legislation to date. This came shortly after the upper and lower houses of Congress voted to repeal a controversial SEC crypto custody accounting rule.

With significant Democratic participation in both bills, it appears the US government’s long war against encryption is coming to an end. Notably, President Biden announced that he would not veto the crypto market framework bill, FIT21, which the White House officially opposes – quite a major concession.

It’s possible that all these events on the Hill acted as a temperature check and helped convince Gensler that his approach to cryptography was becoming a political liability. After all, former President Donald Trump just announced his support for crypto in a big way — and denying ETH ETFs on the grounds, allegedly, that the SEC wasn’t having “productive” meetings with candidates would be great ammunition.

To be sure, the SEC has not approved the listing of ETH ETFs anytime soon – only the 19b-4 proposals from Cboe, NYSE Arca, and Nasdaq, which would allow them to list the funds as soon as companies like Ark Invest, Bitwise, BlackRock, Fidelity, and Grayscale , among others, obtained approval of their S-1 filings. This could take months.

Well, firstly, the launch of ETH spot funds means that there could soon be a lot more institutional interest in the second-largest cryptocurrency. Not only did the move act as a stamp of approval of sorts, but it will also create a family-friendly on-ramp into purchasing the asset for anyone from family investors looking to diversify their 401(k)s to hedge funds, much in the the same way ETFs did with bitcoin.

“Many people were taken by surprise by the Ethereum ETF announcement. While the Bitcoin ETF has created a crypto ETF roadmap for wirehouses and large registered investment advisors, I still expect that many institutional stakeholders are now scrambling to prepare their sales teams on the state of Ethereum and put together the proper infrastructure,” said Framework Ventures . said founder Michael Anderson in an email statement.

And while ETFs are really just a vehicle for gaining exposure to an underlying asset, it’s also possible that these funds could attract more users to Ethereum itself. One scenario: Since the SEC likely won’t allow fund managers to stake the underlying ETH, it’s possible that new Ether investors will determine they want to do it themselves to earn that extra bit ~3.5% yield.

Likewise, as General Counsel at Variant, Jake Chervinsky observed at X, the approval likely answers a lingering question: whether or not ETH is a security. Chervinsky said that if these funds could be traded, it would likely mean that unstaken ETH, in particular, would not be viewed as a security at the agency. This alone could encourage more institutions to enter the market, considering many are currently holding off simply due to regulatory uncertainty.

On a more technical level, there are many open questions about what it would mean for Ethereum in a world where these funds buy large amounts of ETH (assuming they are as popular) as bitcoin ETFs. To some extent, the buying pressure would be great for the network and surrounding layer 2s.

Ethereum has instituted a burn mechanism that destroys tokens with each transaction, which has long made the asset class deflationary. But with the growing popularity of L2s and alternative chains like Solana, Ethereum transaction volumes have fallen to the point that the supply of ETH is growing again, which raises long-term implications for the asset’s price and demand. . ETFs could help support the ETH economy.

Finally, it will be interesting to see how funds affect the staking economy. Some people have been sounding the alarm about the amount of ETH being staked now that apps like Lido make it very easy for people to lock up even small amounts of crypto. With the possibility of ETFs taking even more ETH out of circulation, these concerns could be compounded.

As mentioned, the approval of ETH ETFs is an endorsement of sorts for Ethereum and likely an opportunity for the network to secure its already dominant brand position.

“Assuming the Ethereum ETF sees at least a fraction of the institutional flows that the Bitcoin ETF saw, I think it is entirely possible that Ethereum will solidify itself as the undisputed leader in decentralized application platforms in the coming years, at least in terms of market share and evaluation,” said Anderson.

But the move could also open the door for alternative chains like Cardano, Solana and Ripple to further enter the world of high finance. Of course, bitcoin and ETH had an easier time (everything in perspective) because financial operators like CME had already adopted them. Ether futures have already been active on the CME for three years, although it is not even clear whether other crypto assets are being considered.

It’s also worth noting that while the SEC has hinted that it thinks ETH is a security, the agency has proactively come out and said that assets like SOL, ADA, and ALGO fall within the definition outlined by the Howey Test used to determine whether something is an investment. contract. This could be a stumbling block on the path to a SOL ETF in sight.

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Markets

Crypto Markets Rebound as Spot Bitcoin ETFs Attract Massive Inflows

Published

6 months ago

17 July, 2024

FinCrypt Staff

Crypto Markets Rebound Ahead of Early Ethereum ETF Approval

This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.

Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).

The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.

Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.

Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.

Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.

Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.

Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.

U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.

Source

Markets

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Published

6 months ago

17 July, 2024

FinCrypt Staff

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.

Worldcoin (WLD) Price Analysis

O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.

The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.

Arweave (AR) Price Analysis

Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.

AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.

Price Analysis of Injective (INJ)

Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.

INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.

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Markets

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Published

6 months ago

17 July, 2024

FinCrypt Staff

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.

ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.

ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment

Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.

According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.

On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.

The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.

Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.

One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.

Source

Markets

Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt

Published

6 months ago

17 July, 2024

FinCrypt Staff

Bits + Bips: How to Play the ‘Trump Trade’ in Crypto After the Assassination Attempt

Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?

Posted on July 17, 2024 at 12:00 PM EST.

Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.

They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?

They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).

Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?

Program Highlights:

Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
What are the new updates about Ethereum ETFs and their expected launch?
Why Solana Hasn’t Performed Significantly Better Since Trump News
What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week