The Ethereum price has dipped slightly since the launch of its U.S.-based ETFs, primarily due to significant outflows from Grayscale. There is no reason to consider the ETFs a failure despite the slight net outflow. In fact, this situation presents a prime buying opportunity.
Now we roll. The crypto market, especially Bitcoin, has experienced substantial gains in recent weeks, but that is just the beginning. Many other positive factors are on the horizon. Additionally, it looks like U.S.-based Ethereum spot ETFs will launch tomorrow, which should put an end to Ethereum’s underperformance relative to Bitcoin.
Germany’s Bitcoin sell-off ends, imminent Ethereum ETFs launch in the U.S., and Trump’s potential return to office signals regulatory shifts. The crypto market increasingly aligns with improving macroeconomics as fear subsides.
In our crypto portfolio, we are adding exposure to a token characterized by strong revenue generation, net profits comparable to technology equities, no inflation or token unlocks, and a prime position to benefit from the growing trend of Real-World Assets (RWAs). Additionally, its high correlation with and outperformance of Ethereum suggest positive impacts from the upcoming Ethereum ETFs.
The market is gripped by fear at every turn. In our opinion, this is the perfect time to buy the dip. We have gathered the most compelling reasons and charts to demonstrate why now is the time to accumulate as many coins as possible.
The crypto market has favored Bitcoin and Ethereum this year, while some investors have risked everything on cryptocurrencies with little potential. Given the market’s momentum-driven nature and the upcoming Ethereum spot ETFs, we see no reason for this trend to change going forward. Additionally, we examine unlocks, from which Bitcoin and Ethereum are also spared.
There is decreasing fear in the market regarding Mt. Gox repayments, as it appears that the market has finally realized there is not much selling pressure from these bitcoins. President Trump is significantly leading in bookmakers’ predictions for the 2024 U.S. Presidential Election. This is a positive development for crypto, especially given the SEC’s actions last week.
The market’s outlook on the upcoming Ethereum spot ETFs is overly pessimistic. We anticipate a net inflow of $15 to $20 billion within the first year, as Ethereum possesses qualities that appeal to Wall Street. This should drive its value significantly higher, not only in dollar terms but also relative to Bitcoin.
The Mt. Gox estate announced today that it will begin repaying creditors, with the total repayment amounting to as much as $8.5 billion, starting in July. The market reacted negatively to this news, causing Bitcoin to drop by 4%. However, we believe we are at or near peak panic, so there is, in reality, not much to fear.
We are bullish on the crypto market in the near term, given the numerous positive factors on the horizon. These include increased liquidity, declining exchange balances, the historically strong month of July, dwindling Bitcoin miners’ reserves, and the imminent post-halving period, during which Bitcoin has traditionally generated exceptional returns. That being said, there are also several bearish factors to consider.
The crypto market took a hit last week after a more hawkish-than-expected FOMC meeting by the U.S. Federal Reserve. In our opinion, the market will soon return to its levels before last week’s downturn. Numerous positive factors are on the horizon, including an imminent surge in liquidity.
It is evident that U.S.-based Bitcoin ETFs have facilitated an increase in basis trading. Therefore, it is important not to view each dollar of Bitcoin ETF inflow as equivalent to one dollar of buying pressure on Bitcoin. We estimate that $5 billion to $10 billion of the assets under management by Bitcoin ETFs are attributable to basis trading.
Bitcoin spot ETFs had net inflows of $1.829 billion last week, with last Tuesday marking the second-best day since their January 11 launch, bringing in $887 million. The key question is how much of this inflow is due to basis trading, with no price impact. At least some of it is.
There is no reason to fear the imminent Mt. Gox repayment to creditors. Instead, you should be encouraged by the extremely positive developments happening right before our eyes. In this note, we compare these factors with the Mt. Gox estate situation.
In our view, we are likely to witness the third consecutive unsuccessful launch of exchange-traded crypto products within a month and a half. It is up to the upcoming Ethereum spot ETF to break this trend. Despite being a decade old, the Mt. Gox bankruptcy still haunts the industry.
We strongly expect that exchanges will need to delist the world’s largest stablecoin, Tether, for all residents within the European Union exactly a month from now. This will be negative in the near term as it fragments liquidity and ecosystems. However, in the long run, it is positive as it reduces what is arguably the largest systemic risk in the crypto market.
Although it is unlikely that this week will surpass last week in terms of positive crypto developments, there is still plenty on the horizon to be optimistic about. This includes Trump’s ongoing pro-crypto statements, the launch of exchange-traded products in the U.K., and the imminent increase in liquidity.
Ethereum’s market outlook is highly bullish following the approval of its spot ETFs, expected to attract $15 to $20 billion in net inflow within a year, despite initial outflows from the Grayscale Ethereum Trust. With a friendlier regulatory environment and unique attributes like deflationary supply and staking rewards, Ethereum’s price is projected to reach $6,500 by October. The ETH/BTC ratio is anticipated to hit at least 0.065 later this year.
President Biden and his administration have made a complete 180 to attract pro-crypto voters. Now, the approval of the Ethereum spot ETF seems more likely than ever. We estimate a 95% chance of approval this year, most likely as early as this week. These ETFs, combined with a more favorable U.S. regulatory environment for crypto, will propel us to new heights.
While macroeconomic factors like improved liquidity and a favorable CPI report boost optimism, crypto-specific factors such as disappointing institutional holdings in Bitcoin ETFs, an unfavorable seasonal trend for crypto, and stagnant Tether (USDT) supply suggest bearish trends.
There have been no recent updates regarding the SEC’s impending decision on an Ethereum spot ETF. Nevertheless, the upcoming U.S. Presidential Election and Trump’s unexpected pro-crypto stance are exerting pressure on President Biden to adopt more crypto-friendly policies.
This is the final week before the U.S. Securities and Exchange Commission (SEC) must make a decision on the Ethereum spot ETF. Given the potentially transformative impact of an Ethereum spot ETF, the next two weeks are critical for the entire industry. There have been several developments regarding this matter in the recent weeks.
Ethereum’s rollups are poised to realize its potential as a decentralized global computer; however, these same rollups are undermining Ethereum’s current strongest narrative as an appealing yield-generating asset. The promises of rollups will only counterbalance this undermining of Ethereum’s narrative as a productive asset in a few years.
This weekend saw Bitcoin, Ethereum, and the broader crypto market surge, despite our bearish stance. It seems the market rose primarily due to anticipated improvements in liquidity conditions. However, our bearish arguments remain intact, and we continue to hold the same market position.
The crypto market experienced a remarkable rally from late last year up to now. However, all good things eventually come to an end. The market is facing a shortage of compelling short-term narratives, significant selling pressure, and unfavorable seasonal trends. While increased liquidity might provide some relief, it is unlikely to make a significant impact in the near term.
The crypto market lacks drivers to push prices higher, yet many factors loom that could lead to declines. Short-term narratives are unconvincing, and the buying pressure prior to the Bitcoin halving – motivated by expectations of rising prices – has faded, resulting in bitcoins returning to the spot markets.
Restaking of Ether, with initiatives like EigenLayer, has the potential to significantly enhance Ethereum, benefiting holders, stakers, developers, and the broader ecosystem. However, these benefits are not without their drawbacks. Engaging in restaking carries substantial risks for the individual holders involved and also poses systemic risks to the Ethereum network as a whole.
We anticipate the market will soon acknowledge the decreasing tensions between Israel and Iran, coupled with an improvement in US liquidity as tax season wraps up. There are now more compelling reasons to be bullish rather than bearish, despite the recent negative turn in the crypto futures market.
Bitcoin does not currently function as a safe haven. According to our quantitative model, it behaves more like a risk-on asset, similar to technology stocks. However, there is potential for Bitcoin to become a safe haven in the future. At this point, there is evidence suggesting that Bitcoin effectively serves as an inflation hedge.
Over the weekend, geopolitical tensions sent Bitcoin and Ethereum tumbling, but the crypto market quickly rebounded, arguably thanks to Hong Kong’s new ETF approvals and the upcoming Bitcoin halving. Despite this recovery, ongoing Iran-Israel tensions could still disrupt the market.