In an interesting turn of events, the United States Securities and Exchange Commission (SEC) approved the pending Ethereum spot ETF applications last week. This landmark development has led to commentary on the value and acceptability of the Ether token, especially amongst a specific demographic.
If Bitcoin Is Digital Gold, What Is Ethereum?
Eric Balchunas, an ETF analyst at Bloomberg, took to the X platform to discuss the chances of success of the Ethereum spot ETF market following the recent approval. The analyst highlighted how the acceptability of the Ethereum token, especially amongst investors in the 60 to 80-year-old age group (baby boomers), might pose a challenge to how well the investment products will perform.
According to Balchunas, one way ETF issuers might be able to penetrate the “baby boomer” market is by distilling the value or purpose of the ETH ETFs into an “easy-to-understand sound bite.” The Bloomberg analyst questioned if Ethereum has a simple selling point while citing “Bitcoin is digital gold” as an exemplary marketing one-liner that the older generation can resonate with.
Balchunas then asked in his post:
Does a simple one-liner like that exist for Ether? If so, what is it?
There were several interesting answers from notable personalities in the cryptocurrency space. Notably, crypto journalist Colin Wu called Ethereum the “Web 3.0 internet.”
Prominent crypto investor and partner at venture capital firm Cinneamhain Ventures Adam Cochran also responded, saying “Ethereum is like digital oil.” Cochran explained further that Ethereum is the gas that powers decentralized protocols.
Staked ETH is like an internet bond.
— Adam Cochran (adamscochran.eth) (@adamscochran) May 24, 2024
Meanwhile, James Check (popularly known as CheckMatey), a lead analyst at Glassnode, suggested that Ether doesn’t have a selling point. “Ethereum still has no elevator pitch, despite years of attempts,” the crypto pundit said in a post on X.
ETH ETF To Clear The Path For More Funds: TD Cowen
While it is unclear whether the Ethereum spot ETFs will be successful, these newly approved funds are expected to usher in even newer crypto products in the coming year. According to investment bank TD Cowen’s research team, a product containing a “basket of crypto tokens,” possibly just Bitcoin and Ether or other tokens might be next in line.
However, the research group noted in its report that the recent approval of Ethereum spot ETF doesn’t indicate a shift in the SEC’s overall stance towards crypto. This was highlighted in chairman Gary Gensler’s recent statement against the passage of crypto legislation.
TD Cowen predicts the SEC will keep its Democratic majority through 2026. “We expect the agency will continue to litigate against crypto trading platforms that trade tokens that the agency believes are unregistered securities”. Next ETF to come within a year might be an offering…
— Wu Blockchain (@WuBlockchain) May 26, 2024
“We expect the agency will continue to litigate against crypto trading platforms that trade tokens that the agency believes are unregistered securities,” the TD Cowen researchers said about the SEC keeping its Democratic majority through 2026.
ETH price hovers around $3,800 on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
Recently, during a panel, Paolo Ardoino, the Chief Executive Officer of Tether, shared his ideas about what role Bitcoin would play in traditional finance. Ardoino’s predictions are based on the U.S. SEC’s approval of the first spot Bitcoin exchange-traded funds (ETFs). This decision has pushed this cryptocurrency, making it more acceptable among seasoned investors.
Increased Interest from Institutional Investors
Ardoino expects that fund managers will be the next group to realize the potential of Bitcoin by incorporating it into their investment portfolios. These expectations of private investors are founded on the approval of spot Bitcoin ETFs in the US. These ETFs not only extended the accessibility of Bitcoin in traditional investment markets but also gave it legitimacy through the stamp of authority.
.@PaoloArdoino on the total addressable market of securitized tokens on the bitcoin network: “…in the trillions.” https://t.co/OtcaV2nEsl
— Tuur Demeester (@TuurDemeester) February 27, 2024
In the context of Ardoino, fund managers could allocate around five percent of their assets toward Bitcoin. This shift indicates a broader trend of digital assets becoming integral to diversified investment strategies.
Bitcoin on Corporate Balance Sheets
Placing Bitcoin in the corporate world on balance sheets is a realistic step many companies have done, as the Tether CEO noted. The spot Bitcoin ETFs have come to the market against a backdrop when only a handful of companies, such as Tesla, Inc., and MicroStrategy Inc., had publicly declared their Bitcoin positions.
Ardoino hopes that the introduction of spot bitcoin ETFs will create a tendency for more companies to follow suit, especially during political instability, but use Bitcoin to protect their assets against the volatility of the traditional financial markets.
Surge in Bitcoin ETF Assets
Following the green light given to the first spot Bitcoin ETFs, the assets under management of these funds have expanded markedly, now reaching around $42 billion. These numerous bitcoin EFTs are a reason behind the capital flow to the cryptocurrency, which consequently saw a price rally, breaking an all-time high of $56,000 since November 2021. This move in the price is a clear indicator that the heavy institutional investment has a considerable effect on Bitcoin’s market dynamics.
Ardoini also discussed that regulation reshaping around cryptocurrency is changing. As the issue magnifies with other countries like El Salvador adopting BTC as their legal tender, he postulates that regulators and policymakers in the other jurisdictions must evolve to keep up with the fast-changing financial environment.
The United States is witnessing bills introduced that will give slots to implement regulatory frameworks for cryptocurrency, including stablecoins. In addition, SEC Chair Gary Gensler’s categorization of Bitcoin as a commodity has put it in a different class than other crypto-currencies commonly treated as securities.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
While Bitcoin has struggled since the much-anticipated spot ETFs have gone live, Ethereum has emerged as a winner in the sector.
Ethereum Has Done Better Against Both Bitcoin And Altcoins Recently
In its latest weekly report, the on-chain analytics firm Glassnode has discussed how Bitcoin, Ethereum, and the altcoins have performed against each other recently.
The cryptocurrency sector as a whole has enjoyed a net rise since BlackRock first filed for its exchange-traded fund (ETF) last year.
The trend in the market caps of the three asset classes over the past few months | Source: Glassnode's The Week Onchain - Week 4, 2024
This period was filled with speculation about whether the various spot ETFs would go through. Still, starting mid-October, the assets rose as confidence that approval would be achieved went up.
“Bitcoin’s market cap has increased by +68.8% since BlackRock first filed for their ETF, and the aggregate Altcoin Market Cap followed suit, rising by +68.9%,” reads the report. “However, Ethereum has seen more sluggish relative momentum, underperforming the wider altcoin space by -17%.”
Next, Glassnode has talked about the “market cap dominance” of these asset classes, which measures the percentage share they occupy in the total valuation of the cryptocurrency sector.
The trend in the market cap dominances of these assets over the last few years | Source: Glassnode's The Week Onchain - Week 4, 2024
Since the FTX collapse in November 2022, Bitcoin’s market cap dominance has notably risen. However, BTC hasn’t taken a share of Ethereum as the second-largest coin’s dominance has moved mostly sideways in this period. Instead, the altcoins and stablecoins are the ones who have lost dominance to Bitcoin.
The BTC spot ETFs finally gained approval earlier this month, but the event turned out to be a sell-the-news one for the asset. In this post-ETF era, though, a new narrative has appeared in the sector in the form of the ETH spot ETFs.
“Shortly after the approval of the Bitcoin ETF, several issuers have filed or suggested a willingness to advocate for a spot ETF for Ethereum,” notes Glassnode. “Although obtaining approval for an ETH-based ETF might be more challenging due to the SEC possibly considering Ether as more of an investment contract, the markets appeared to express optimism.”
As the chart below shows, Ethereum’s dominance against Bitcoin has gone up.
The value of the metric seems to have gone up for ETH recently | Source: Glassnode's The Week Onchain - Week 4, 2024
As the graph shows, ETH’s market cap dominance versus BTC has increased by about 2.9% since the latter’s spot ETFs gained approval from the US SEC.
The altcoin side of the sector has seen a net rise in this period as well, but the alts haven’t been able to keep up with ETH, as the latter has generally outperformed them.
ETH has gained market-share against the altcoins | Source: Glassnode's The Week Onchain - Week 4, 2024
In total, Ethereum has earned 4.2% in global dominance. “This makes ETH the biggest winner in the post-ETF approval market movements,” explains the analytics firm.
ETH Price
At the time of writing, Ethereum is trading at around $2,230, up 1% in the last 24 hours.
ETH has plunged over the last couple of days | Source: ETHUSD on TradingView
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, Glassnode.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Bitcoin has dropped over 20% from its three-year high reached shortly after the U.S. Securities and Exchange Commission (SEC) approved the first spot Bitcoin exchange-traded funds (ETFs) in January. Analysts cite a combination of profit-taking after the long-awaited event and broader market uncertainty as reasons for the correction.
Bitcoin Retreats Post-ETF Approval Surge
The price surge in anticipation of the ETF approval saw Bitcoin reach nearly $49,000 on January 11th. However, since the green light for the ETFs, the cryptocurrency has retreated steadily, trading at around $39,500 at the time of writing.
According to some analysts, they have seen a classic “sell the news” scenario unfold. Investors had largely priced in the ETF approval for months, and once it actually happened, some took the opportunity to lock in profits, they added.
While nearly $4 billion has flowed into the new spot ETFs, a significant portion, analysts note, came from existing funds like Grayscale which transitioned into an ETF, suggesting less net new investment than what the headline numbers might imply. Additionally, the ongoing liquidation of assets from bankrupt crypto exchange FTX has added downward pressure on prices.
Bitcoin slightly above the $40K level today. Chart: TradingView.com
Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, said:
“It seems that the seemingly large amount of daily outflows from GBTC is affecting the market in a psychological way.”
The downturn extends beyond Bitcoin, with other major cryptocurrencies also experiencing losses. Ether, the world’s second-largest cryptocurrency, is down nearly 4%, while Solana and other altcoins have seen similar declines. The price dips have also impacted crypto-related stocks, with Coinbase shares falling around 4% in pre-market trading.
Top 10 cryptos drenched in red today. Source: Coingecko
Despite the recent price correction, analysts remain divided on the near-term outlook for Bitcoin. Some believe the pullback may be nearing its end, with support levels around $36,000 likely to hold. Others believe further downside is possible before a sustained rebound.
BTC price action in the last week. Source: Coingecko
Bitcoin: Volatility Persists, Long-Term Outlook Strong
Bitcoin has experienced significant corrections after major news events in the past. However, the long-term fundamentals remain strong, and many believe Bitcoin is still on track for a new all-time high in 2024.
The recent market volatility highlights the risks involved in investing in Bitcoin and other cryptocurrencies. While the potential for high returns exists, investors should be aware of the significant price swings and uncertain regulatory landscape before entering the market.
As the post-ETF aftermath unfolds, the cryptocurrency market finds itself submerged in a sea of red. The volatility underscores the sensitivity of digital assets to market sentiment and regulatory developments.
Featured image from Shutterstock
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
According to data from CoinMarketCap, Ethereum (ETH) had dipped over 2% in the last 24 hours. This negative price movement comes after an initial price boost by the token which it gained by over 19% following news of the Bitcoin spot ETF approval in the US on Wednesday.
Interestingly, popular crypto analyst Ali Martinez has offered more insight into ETH’s developing downtrend, highlighting the next possible support zones for crypto’s largest altcoin.
Ethereum May Be Headed For $2,450 – Analyst
In an X post on January 11, Martinez shared that the TD Sequential indicator presented a sell signal on the Ethereum 4-hour chart, which could possibly result in the altcoin’s price falling to a support level of $2,530.
For context, the Tom Demark Sequential indicator is a popular TA tool used to identify trend exhaustion and predict possible trend reversals.
According to Martinez, this analysis tool showed that ETH was due for a price correction following a price surge in which the asset traded above $2,700 in reaction to the US Securities and Exchange greenlighting the launch of Bitcoin spot ETFs on US securities markets.
If #Ethereum can’t hold above $2,530, the next stop will be $2,450! https://t.co/wtjcdRTWnv
— Ali (@ali_charts) January 12, 2024
Interestingly, in a second post on January 12, the renowned crypto analyst doubled down on this prediction stating that if the ETH bulls failed to keep the coin’s value above $2,530, there was a chance the token could trade as low as $2,450.
According to Martinez, ETH’s current negative price movement appears to be a mere correction which is likely true as the general investor sentiment around the altcoin remains bullish.
Earlier this week, NewsBTC reported that ETH investors are hyped with the expectation of an Ether spot ETF in the US following the SEC’s clearance of 11 Bitcoin spot ETF applications on Wednesday. Considering ETH’s rank as the second-largest cryptocurrency after Bitcoin, as well as the rising number of Ether spot ETF applications, investors believe the altcoin may be in line for the SEC’s favor.
ETH’s Price Overview
At the time of writing, Ethereum was trading at $2,548 with a slight decline of 2.67% in the last day. However, the altcoin has shown an overall bullish performance in the last week, with a notable gain of 14.48%. Adding to this positive narrative, there is also an uptick in ETH’s daily volume by 22.25% which is currently now valued at $26.8 billion.
ETH trading at $2,553 on the daily chart | Source: ETHUSDT chart on Tradingview.com
Featured image from Forbes, chart from Tradingview
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
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Galaxy Digital, a leading player in the digital assets sphere, has issued a bullish prediction for Bitcoin’s trajectory following the launch of the much-anticipated US-regulated spot Bitcoin ETF. According to a recent study published by the firm on October 24, the introduction of the ETF is set to considerably bolster Bitcoin’s adoption, positioning it more firmly as a recognized asset class.
Advantages Of An ETF
Galaxy’s analysis highlights that a spot Bitcoin ETF would be “one of the most impactful catalysts for the adoption of Bitcoin (and crypto as an asset class).” By the end of September, Bitcoin assets held across diverse investment products like ETPs and closed-end funds touched an impressive figure of 842,000 BTC, valuing approximately $21.7 billion.
Galaxy Digital’s study also sheds light on the challenges faced by these investment avenues, pointing to factors like high fees, tracking errors, limited liquidity, and a somewhat constrained reach amongst broader investor groups. The introduction of the spot Bitcoin ETF, the report suggests, is poised to change this scenario dramatically.
Spot Bitcoin ETFs offer a multitude of benefits over the current structures: an improved fee system, greater liquidity, better price tracking, and a much-needed break from the complications of self-custodying assets. As the report explicitly states, “The presence of a US-regulated spot Bitcoin ETF that adheres to strict regulatory compliance not only provides a more secure platform but also elevates its transparency, making it a preferable choice over existing investment products.”
Why A Spot Bitcoin ETF Matters
Galaxy believes that the introduction of a Bitcoin ETF would increase the digital asset’s “accessibility across wealth segments” and establish “greater acceptance through formal recognition by regulators and trusted financial services brands.”
The report highlights the disparity between age groups when it comes to Bitcoin investments. It reveals that while Boomers and older generations hold 62% of US wealth, only 8% of adults aged 50 and above have invested in cryptocurrency.
Galaxy sees regulatory approval for a Bitcoin ETF as a significant step towards establishing Bitcoin as a mainstream investment. An ETF could help reduce market volatility by offering “greater price transparency and discovery for market participants.”
Estimating Inflows From ETF Approval
Galaxy’s forecast suggests the US wealth management sector, managing a combined asset worth $48.3 trillion, will be the most impacted by a Bitcoin ETF’s launch. They estimate potential inflows into the Bitcoin ETF to be around $14 billion in the first year, escalating to $27 billion in the second year and reaching $39 billion by the third year.
Factoring in the historical relationship between gold ETF fund flows and gold price change, Galaxy predicts a potential price increase of 6.2% for BTC in the first month after an ETF’s launch. They project this to taper down to +3.7% by the last month of the first year, resulting in an estimated +74% increase in BTC in the first year of an ETF approval. At the current price, this would mean that BTC could rise above $59,000 in the post-ETF debut year.
The Bigger Picture
Beyond the potential inflows into a US ETF product, Galaxy predicts that there will be a much larger impact on BTC demand “from second-order effects”. The potential approval of a spot ETF in the US might instigate similar products in other global markets. Moreover, Galaxy expects that various other investment vehicles, like mutual funds and private funds, will integrate Bitcoin into their strategies.
Galaxy suggests the potential for Bitcoin’s Total Addressable Market (TAM) to grow substantially, perhaps encroaching on traditional asset sectors like real estate and precious metals. The estimated potential new inflows into BTC could range between $125 billion to $450 billion “over an extended period.”
Featured image from Shutterstock, chart from TradingView.com
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