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.
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 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.
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.
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.
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.
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.
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.
Since their debut three months ago, the US-based Bitcoin spot ETFs have attracted a significant inflow of capital, totaling $12.5 billion. The momentum does not stop here, with additional countries poised to roll out their own exchange-traded Bitcoin products.
Bitcoin is at the forefront of the market, with other cryptocurrencies attempting to keep pace. We anticipate a continued upward trajectory until a shift occurs, particularly for Bitcoin, in the months following the upcoming Bitcoin halving.
A showdown is unfolding in the crypto world, specifically between BlackRock’s CEO, Larry Fink, and Gary Gensler, the Chair of the US Securities and Exchange Commission. Moreover, echoing our view from last week’s Crypto Crisp, we are not anticipating significant volatility in the upcoming weeks, especially considering the recent net outflows from Bitcoin spot ETFs.
Ethereum’s transition to a Proof-of-Stake consensus mechanism has been a significant boon, instantly positioning it as the most productive cryptocurrency among its peers. However, this success comes with a vulnerability; if future Ethereum spot ETFs gain the ability to stake Ether, Ethereum’s fate could largely fall under the control of traditional finance. The most feasible countermeasure to this scenario lies in the full adoption of liquid staking protocols.
The crypto market is getting less speculative by the minute. There is no need to chase the next big thing by risking funds on obscure altcoins or memecoins. Instead, by aligning with institutional movements, crypto investors stand to gain significantly without taking on too much risk.
Over the past week, Ethereum, the second-largest cryptocurrency, emerged as the top performer in an otherwise subdued crypto market. During this period, Bitcoin experienced a decrease in net inflow into exchange-traded products, including Bitcoin spot ETFs, compared to the previous week. On Friday, the Uniswap Foundation suggested a new fee mechanism, potentially enhancing its token significantly.
We have a high level of confidence that the US will witness the launch of an Ethereum spot ETF within this year, assigning a 90% probability to this event. Our optimism is grounded in five key reasons. We have every reason to believe that an Ethereum spot ETF will be just as successful as the Bitcoin spot ETFs have already been.
Everyone is looking forward to the Bitcoin halving, yet there is little focus on Ethereum’s equivalent of a triple halving. In our crypto portfolio, Ethereum takes the spotlight. We predict that Ethereum will evolve into a widely-utilized digital commodity, coupled with a decreasing supply and the ability to generate dividends – a truly unique asset, not just in crypto, but beyond.
While the approval of the Bitcoin spot ETF did not spark a significant reaction in the market for Bitcoin, Ethereum emerged as the clear winner, securing a substantial 15% gain over Bitcoin post-ETF approval. Our expectation is that Ethereum stands to reap further rewards in the coming months, while Bitcoin experiences slow bleeding.
As we step into 2024, it seems like everyone is long crypto left, right, and center. This environment does not elicit much enthusiasm from us, as it brings back memories of the exact opposite situation just a year ago. We have identified five key factors that we believe will shape 2024. Among them, three are anticipated to pose potential downsides, one holds the potential for an upside surprise, and there is a joker that seems to be completely overlooked.