Markets
Analyst Says Approval of Ethereum Spot ETFs Will Cause “Animal Spirits” to Rekindle Crypto – What This Means – TradingView News
A crypto analyst has made a rather cryptic prediction, suggesting that the approval of Ethereum Spot ETFs by the United States Securities and Exchange Commission (SEC) could trigger a new wave of “animal spirits.” This term in crypto is often used to describe an irrational exuberance and optimism that fuels financial markets.
Ethereum Spot ETF to Rekindle Animal Spirits
In an X (formerly Twitter) post on May 22, a crypto analyst identified as “the DeFi villain” made a bold prediction, anticipating the resurgence of altcoin bull season following the SEC’s approval of the Ethereum Spot ETF. The analyst revealed that approval could release “animal spirits”, driving renewed demand and positive sentiment in the market and possibly resulting in a bull market.
The analyst outlined a long list of altcoins that have outperformed and experienced notable rallies in 2021. These rallies have boosted each of their market capitalizations from mere hundreds of millions to billions in the space of a few days and months.
Among the cryptocurrencies highlighted by DeFi Villain, some notable altcoins have registered a massive increase in market capitalization, including Dogecoin (DOGE), THORChain (RUNE), Filecoin (FIL), Binance Coin (BNB), Axie Infinity (AXS), Shiba Inu (SHIB) and others.
According to crypto analyst, Dogecoin witnessed a 10x increase in one day in January 2021. While RUNE’s market capitalization rose from $200 million to $5 billion in just five months.
One of the most notable increases was seen in Filecoin, which almost reached Ethereum’s current market capitalization. The cryptocurrency jumped close to $400 billion during the 2021 altcoin rally.
Other cryptocurrencies like AXS jumped from a market capitalization of $200 million to $10 billion, with its fully diluted value (FDV) reaching $43 billion at some point. Furthermore, Binance Coin, which was already worth $6 billion at the beginning of 2021 and was among the top 20 cryptocurrencies, witnessed an 8x mega pump in 20 days, reaching a staggering $50 billion in February 2021.
Even popular meme coins like Shiba Inu (SHIB) rose sharply, jumping from $4 billion to $40 billion in less than a month. Ethereum Cash (ETC) also saw its market capitalization increase from $600 million to $17 billion in five months.
These massive surges during the 2021 bull run underscore the potential that altcoins have in the crypto market and how insane they could be when altcoin season arrives and Bitcoin’s dominance shifts to smaller cryptocurrencies.
DeFi Villain predicted that the final leg of meme coins will likely be “Vertical and Brutal,” suggesting that these volatile cryptocurrencies could have another powerful rally to new highs this market cycle.
Does the ETF’s approval nullify the SEC’s previous security claims?
In recent months, the US SEC has made allegations suggesting that Ethereum, the second-largest cryptocurrency, was considered a security. However, following the authorization of Ethereum Spot ETFs, the SEC finally recognized Ethereum as a non-security.
Calling out the regulator on this contradiction, Paul Grewal, Chief Legal Officer (CLO) at Coinbase, revealed that if Ethereum that lacks a “contractual agreement or commitment” is no longer considered a security by the SEC, then Bitcoin (BTC), which operates in the same way, without the above agreements, it should also be a non-security.
Grewal raised a compelling point about the classification of 12 other cryptocurrencies, which can be compared to Ethereum and Bitcoin in terms of non-security treatment by the SEC. Coinbase’s CLO disclosed that the implications of these 12 other cryptocurrencies being considered securities despite also having no agreement or contractual commitment raises the question about the SEC’s possible lack of regulatory clarity and inconsistent regulatory approach to different crypto assets.