Ethereum

3 questions about the SEC’s abrupt approval of the ETH ETF

Published

6 months ago

29 May, 2024

3 questions about the SEC's abrupt approval of the ETH ETF

The United States Securities and Exchange Commission (SEC) confirmed yesterday that it has approved critical rule changes for allow exchange-traded funds holding Ethereum’s native token, EPF. Many people were caught off guard, knowing that last week almost everyone – from Bloomberg analysts to prediction 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.

I’ve never really understood why SEC Chairman Gary Gensler refrained from approving these spot ETH products, given the agency’s embarrassment during its proactive fight for listing Bitcoin ETFs .

Recall that a three-judge appeals court panel called the SEC’s reasoning for denying (and refusing and refusing) Bitcoin spot funds “arbitrary and capricious” because it had already approved products Bitcoin futures that did essentially the same thing. The same situation has this is true for ETH Moreover, and it is likely that a company would have been happy to litigate the issue in the same way that Digital Currency Group fought for Bitcoin ETFs.

This time, the SEC’s decision seems just as arbitrary, but in the opposite direction. In a interview with Jesse Hamilton of CoinDesk Hours before the approval was made 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 have rotated”.

So why now? What does this mean for Ethereum in the future? And does this bode well for other cryptos?

As many have already noted, there appears to have been a sea change regarding the regulatory situation for crypto. On Thursday, the House took a historic vote to approve the most significant crypto-related legislation to date. This follows the upper and lower houses of Congress voting to repeal a controversial SEC cryptocurrency custody accounting rule.

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

It’s possible that all of these events on the Hill acted as a temperature check and helped convince Gensler that his approach to crypto was becoming a political risk. After all, former President Donald Trump just announced his massive support for crypto – and refusing 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 hasn’t approved the upcoming listing of ETH ETFs – just Proposals 19b-4 from Cboe, NYSE Arca and Nasdaq, which would allow them to list the funds once companies like Ark Invest, Bitwise, BlackRock, Fidelity and Grayscale, among others, are getting their S-1 filings approved. It could take months.

First, the launch of ETH spot funds means there could soon be a lot more institutional interest in the second-largest cryptocurrency. Not only did this move act as a sort of seal of approval, but it will also create a familiar on-ramp for purchasing the asset for all family and family investors looking to diversify their 401(k)s into hedge funds, largely in the same way that ETFs did for bitcoin.

“A lot of people were caught offside by the Ethereum ETF announcement. Even though the Bitcoin ETF has created a crypto ETF roadmap for wire companies and large registered investment advisors, I still expect many institutional players to now be scrambling to prepare their sales teams to the state of Ethereum and put the appropriate infrastructure in place,” Framework Ventures said. founder Michael Anderson said in an emailed statement.

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

Likewise, as Variant’s chief legal officer, Jake Chervinsky note on X, the approval likely answers a lingering question: whether or not ETH is a security. Chervinsky said that if these funds were allowed to be traded, it would likely mean that unstaked ETH, in particular, would not be considered a security by the agency. This in itself could entice more institutions to enter the market, given that many are currently hesitant simply due to regulatory uncertainty.

On a more technical level, many questions remain about what this 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, buying pressure would be significant for the network and surrounding Layer 2s.

Ethereum instituted a burn mechanism that destroys tokens with every 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 a point where the supply of ETH is increasing again, which has long-term implications for price and demand. of the asset. ETFs could help support the ETH economy.

Finally, it will be interesting to see how the funds affect the economics of staking. 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 removing even more ETH from circulation, these concerns could be exacerbated.

As mentioned, the approval of ETH ETFs is something of an endorsement for Ethereum and likely an opportunity for the chain to solidify its already dominant brand position.

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

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 (all in perspective) because financial incumbents like CME had already adopted them. Ether futures have already been available on CME for three years, and it is not even clear if other crypto assets are being considered.

It’s also worth noting that while the SEC has implied that it believes ETH is a security, the agency has proactively stated that assets like SOL, ADA, and ALGO fit the definition set by the Howey test used to determine if something is an investment. contract. This may be a speed bump on the road to a spot SOL ETF.

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Ethereum

Bits + Bips with Nic Carter: Trump’s Promises, Kamala’s Change, and ETH’s ‘Narrative Problem’

Published

4 months ago

1 August, 2024

BlockChainBulletin Staff

Bits + Bips With Nic Carter: Trump’s Promises, Kamala’s Shift & ETH’s ‘Narrative Problem’

Nic Carter joins the show to talk about his journey to becoming a fighter, Trump’s promises, Lummis’ Bitcoin Reserve bill, the launch of ETH ETFs, and more.

Posted on July 31, 2024 at 12:00 PM EST.

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket casts, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger, and Joe McCann dive with Nic Carter into Trump’s game-changing promises to the crypto community, Kamala Harris’ unexpected policy changes, and Solana’s explosive rise.

Additionally, Nic reveals his unexpected journey into amateur fighting and addresses the pressing issues surrounding Ethereum ETFs and the ecosystem he’s been funding the most lately.

Highlights of the show:

Why Alex Thinks the Conference Was One of the Most Incredible Moments in Crypto History
Nic’s reaction to Trump’s mention of deconstructing “Operation Chokepoint 2.0,” a term coined by Nic himself
Nic’s Karate Fight and His Journey to Becoming an Amateur Fighter
Why Nic Thinks There’s No Chance Lummis’ Bill Proposing the U.S. Government Establish a Strategic Bitcoin Reserve Will Pass
The Importance of Trump’s Bitcoin Nashville Promises
How Tether compares to the Eurodollar system
What are the potential impacts of the Fed’s language at its next meeting?
The implications of Harris’ campaign to mend ties with cryptocurrency companies
How the ETH ETF Launch Happened and Why Nic Says Ethereum Has a “Narrative Problem”
How Solana Has Been Heartbreaking Lately and Joe’s Response to Some of the Criticism
How Nic, as a VC, sees the ETH vs. SOL debate and how founders are increasingly choosing Solana

Hosts:

Guest

Nic CarterGeneral Partner at Castle Island Ventures

Connections

Bitcoin Conference:

Trump’s speech:
Lummis Proposal:
Democrats/Harris looking for a “reset”
Letter From Democratic politicians to DNC chair to include crypto in Democratic party platform:

ETH ETF Launch:

Solana rocks:

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Ethereum

Bitcoin, Ethereum in the red as markets crash on volatility

Published

4 months ago

1 August, 2024

BlockChainBulletin Staff

Bitcoin, Ethereum in the red as markets crash on volatility

Bitcoin And Ethereumalong with the rest of the top 10 crypto assets by market cap, look gloomy Thursday morning.

At the time of writing, the Bitcoin Price is still below $65,000 and 2.2% lower than it was at this time yesterday, according to CoinGecko data. Things are worse for the Ethereum Priceor 3.7% lower than 24 hours ago at $3,185.22. The drop in ETH price is in line with that of Lido Staked Ethereum (stETH), a liquid Ethereum staking token.

Over the past day, falling prices led to the liquidation of $225 million worth of derivative contracts, according to Coin glass. And about half of them, or about $100 million, have been liquidated in the last 12 hours.

When a trader is liquidated, it means that their market position has been forcibly closed by an exchange or broker due to a margin call or insufficient collateral. Margin is especially relevant when it comes to leveraged positions, which allow traders to control a multiple of their deposit, such as opening a $10,000 position with only $1,000 in their account.

Now that Bitcoin has posted three consecutive days of losses, it is possible that the world’s oldest and largest cryptocurrency could sink even further, BRN analyst Valentin Fournier said in a note shared with Decrypt.

“For three consecutive days, Bitcoin has closed negative, with one-way trades showing limited resistance from the bulls. Ethereum had a slightly positive Monday with strong resistance from the bears who have gained over the past two days,” he wrote. “This momentum could push BTC down towards the $62,500 resistance or even the $58,000 territories.”

Looking ahead, Fournier said BRN’s strategy will be to “reduce exposure to Bitcoin and Ethereum and find a better entry point after the dip.”

All this despite the fact that Federal Reserve Chairman Jerome Powell’s comments on interest rates yesterday were generally perceived as being accommodating and indicates that the FOMC cut rates in September.

QCP Capital, a Singapore-based cryptocurrency trading firm, noted that the rally in stocks, which left the S&P 500 starting the day 1.6% higher than its Wednesday close, was not felt in cryptocurrency markets.

“Cryptocurrencies saw a massive selloff overnight and this morning,” the firm wrote in a trading note. “The market remains on edge, with traders paying close attention to daily ETH ETF outflows and further supply pressures from Mt Gox and the US government.”

Meanwhile, the rest of the major pieces are a mixed bag.

Solana (SOL) has dropped 7.2% since yesterday to $169.13. Things are even worse for its most popular meme coins. In the last 24 hours, popular meme coins Dogwifhat (WIF) have dropped 12% and BONK (BONK) has dropped 9%, according to data from CoinGecko.

Their dog-themed competitor and Ethereum OG Dogecoin (DOGE), the only meme coin in Coingecko’s top 10, has dropped nearly 4% since yesterday and is currently trading at $0.1205.

XRP (XRP) fell to $0.608, down 7% from the same time yesterday.

Binance’s BNB Coin (BNB) has kept pace with BTC and is currently trading at $571, down 2.4% since the same time yesterday. Toncoin (TON), the native token of The Open Network, has only fallen 0.4% over the past day.

There remain the stablecoins USDC (USDC) and Tether (USDT), both of which are stable because they maintain their 1:1 peg with the US dollar.

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Ethereum

FOMC Holds Interest Rates Steady, Bitcoin and Ethereum Prices Fall

Published

4 months ago

1 August, 2024

BlockChainBulletin Staff

Chairman of the Federal Reserve Jerome Powell

Jerome Powell Jerome Hayden “Jay” Powell is an American lawyer and investment banker who has served as the 16th Chairman of the Federal Reserve since 2018. Finance recently hinted at a potential rate cut in September, sparking a sharp rise in the stock market. The tech-heavy Nasdaq 100 rose 3.3%, and the S&P 500 rose 2%. In contrast, Bitcoin (BTC) fell 1.3% to $66,088 and Ethereum (ETH) The global cryptocurrency market fell by 1.11% to $3,313. Over the past 24 hours, the global cryptocurrency market capitalization also decreased by 0.71% to $2.39 trillion.

Market analysts believe that the decline in cryptocurrency prices is a short-term decline. Despite a bear market, Bitcoin and other cryptocurrencies are showing bullish signals. Bitcoin is still struggling to break the $70,000 mark, but its performance in August, ahead of potential rate cuts, will be closely watched.

Federal Reserve remains stable

On July 31, the U.S. Federal Reserve concluded a two-day meeting of the Federal Open Market Committee (FOMC) by deciding to keep benchmark interest rates unchanged at 5.25%-5.50%. The move met Wall Street expectations and marked the eighth consecutive meeting without a rate change.

Towards a market rebound?

According to SantimentThe FOMC’s decision to maintain current interest rates led to an initial decline in cryptocurrency prices. Traders were hoping for a rate cut, which hasn’t happened since March 2020. A future rate cut could signal bullish trends for stocks and cryptocurrencies, potentially boosting markets for the remainder of 2024. Despite the initial sell-off, markets are likely to stabilize unless another major event impacts the cryptocurrency sector.

Bullish outlook, bearish sentiment

The aggressive buildup of rate hikes and rising negative investor sentiment could pave the way for a substantial market rally. Despite the anticipation surrounding the FOMC meeting, the impact on cryptocurrencies was limited as the rate pause had already been priced in.

Previous Fed decisions have had minimal impact on Bitcoin prices.

A look into the past & the future

Historically, FOMC actions affect all asset classes. In 2020 and 2021, Bitcoin and other altcoins soared when the Fed cut rates to zero, only to reverse course in 2022 when rates began to rise. Investors have since moved trillions of dollars into lower-risk assets, with money market funds amassing over $6.1 trillion, enjoying an average return of 5%.

Key indicators to monitor

Bitcoin’s immediate resistance is noted at $66,852, with support at $65,000. The Relative Strength Index (RSI) is signaling oversold conditions, suggesting further declines are possible if the price falls below $65,900.

Investors are now closely watching the FOMC meeting for clues about inflation and economic growth, which could influence Bitcoin’s next move. The interplay between the Federal Reserve’s decisions and market reactions will be crucial in determining the future trajectory of cryptocurrencies and traditional assets.

The Fed’s decision has caused a stir in the market. Will this impact your investment strategy?

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Ethereum

Tron’s Justin Sun Hints Ethereum Selloff Could Happen Due to ETF Outflows

Published

4 months ago

1 August, 2024

BlockChainBulletin Staff

Tron's Justin Sun Hints Ethereum Selloff Could Happen Due to ETF Outflows

Justin Sun, the founder of Tron DAO, has hinted at a major Ethereum (ETH) selloff following a series of transactions that have garnered considerable attention. Sun has unlocked a significant portion of his ETH stash. Additionally, he has transferred some of this ETH to Poloniex, a major cryptocurrency exchange.

Justin Sun hints at massive Ethereum selloff

Observers were particularly intrigued by the movement of 1,768 ETH (worth about $5.9 million) unstaked by Lido, according to data from Peck Shield Alert. Additionally, the subsequent transfer of 810 ETH, valued at about $2.7 million, to Poloniex cryptocurrency exchange

raised speculation about a massive Ethereum selloff.

The Ethereum price crash in early July, which saw a 10% drop, further fueled speculation in the market. This slowdown contributed to an 8% drop in the global cryptocurrency market capitalization. Moreover, one of the most notable impacts was a potential $66 million loss for Justin Sun at the time.

According to a report by Spot On Chain, Sun’s vast network Ethereum The holdings were severely impacted by the market downturn on July 5. Between February and June 2024, Sun accumulated a substantial amount of Ether, totaling 361,137 ETH across three separate wallets.

His acquisitions included 169,604 ETH in February at an average price of $2,870, 176,117 ETH in April at $3,177, and 15,416 ETH in June at $3,474. Just one day before the significant price drop, Sun reportedly made a profit of $58 million from these holdings.

However, the market crash on July 5th turned those gains into a staggering $66 million loss. At the height of the crisis, the price of Ethereum fell below $2,800. Although it has since rebounded above $3,300 following the launch of new ETFs, this event triggered a “sell the news” reaction among investors.

Moreover, despite the rebound, the price of ETH has remained below the average value of Sun’s third acquisition. Therefore, the latest concerns about Ethereum selling are not unfounded. This could be a loss mitigation measure, as Sun usually holds his ETH tightly.

ETH ETF Fund Outflows

Adding to the intrigue, flows from Ether exchange-traded funds (ETFs) have been consistently negative. On Monday, July 29, Ethereum Spot ETFs saw outflows totaling $98.3 million. Additionally, Grayscale’s Ethereum Trust (ETHE) alone accounted for $210 million in outflows, accelerating the outflow streak.

However, notable inflows were seen at Blackrock, Fidelity, and Bitwise, recording $58.2 million, $24.8 million, and $10.4 million, respectively. Despite these mixed signals, the price of Ethereum has remained relatively stable. The price of Ether is currently fluctuating between $3,300 and $3,400.

Ethereum Liquidation Chart, Source: Coinglass

At the time of going to press, the ETH Price fell 1.04% to $3,325.16 on Tuesday, July 30 with a market cap of $401 billion. Additionally, a broader sell-off in Ethereum was seen in the market with long liquidations of $33.58 million, according to Coin glassMeanwhile, shorts liquidated about $6.87 million of positions.

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