Ethereum

5 Things to Know About Ethereum’s First Spot Price ETFs

Published

6 months ago

1 June, 2024

5 Things to Know About Ethereum's First Spot Price ETFs

The SEC finally cleared the way for the first Ether spot price ETFs.

On May 22, the United States Securities and Exchange Commission (SEC) approved the first eight applications for Ether (ETH 0.44%) spot price exchange traded funds (ETF) from Grayscale, Bitwise, iShares, VanEck, Ark Invest, Invesco, Fidelity and Franklin Templeton. Ether is the second largest cryptocurrency in the world and the primary coin of the Ethereum network.

This announcement came just four months after the SEC authorized the first spot price Bitcoin (BTC 0.12%) ETF for trading. But should investors assume that these planned ETFs will establish a firm floor under the price of Ether and become compelling long-term investments? Let’s review the five key facts to decide.

Image source: Getty Images.

1. The first Ether ETFs won’t start trading anytime soon

The SEC has approved the first regulatory filings for the eight Ether ETFs, but they will not begin trading until the agency approves their S-1 filings. This process could take several months. For reference, the SEC approved S-1 filings for the first Bitcoin spot price ETFs approximately three months after clearing their initial regulatory filings.

2. The decision transforms Ether into a commodity

In the past, both the Ethereum and Bitcoin blockchains used an energy-intensive system. proof of work (PoW) mining method to produce coins. But in 2022, the Ethereum network moved to the most energy efficient network. proof of stake (PoS). This transition, known as “melting,” reduced the network’s energy consumption by 99.95% and made it deflationary, meaning more ether was being burned than produced.

However, the SEC initially claimed that The Merge created the Ether coin and Ethereum-based tokens more similar to securities than to commodities. This move dramatically changed the way Ether coins are created and managed. Regulators then repeatedly stated that Bitcoin was the only cryptocurrency that could be classified and pinned to the spot price as a commodity because it was digitally mined like a precious metal via the PoW method.

Therefore, the SEC’s decision to approve the first Ether ETF filings implies that the coin can now be classified as a commodity rather than a security. This change could pave the way for smaller Ethereum-based tokens, such as Shiba Inu — as well as independent PoS-based cryptocurrencies like Solana — to obtain their own ETFs at spot prices.

3. Ether ETF investors cannot stake their holdings

Another key difference between Ether and Bitcoin is the “staking” process, which allows investors to earn interest by locking up their Ether coins on the network for a certain period of time. The SEC, which argues that staking-as-a-service solutions should be classified as unregistered securities, has already sued cryptocurrency exchanges including Coinbase (PIECE OF MONEY -3.77%) and Kraken to allow users to stake their own coins.

Grayscale, Ark and other companies originally wanted to add staking features into their ETFs, but they removed those proposals in their updated materials last month. This change could make their ETFs less attractive than real digital coins.

4. The SEC approved the filings likely to avoid more litigation

Last year, the SEC lost a case against Grayscale, which sued the agency for trying to block the conversion of its popular Bitcoin trust into an ETF. This loss softened the SEC’s stance and paved the way for the first Bitcoin ETFs.

Earlier this year, blockchain company Consensys sued the SEC over its refusal to recognize Ether as a commodity, while Grayscale and its peers were widely expected to sue the SEC again if it did not approve their regulatory filings for spot price ETFs. So, for now, it appears the SEC has backed away from tightly regulating Ether to avoid further legal battles.

5. Ether ETFs should attract less attention than Bitcoin ETFs

Grayscale currently holds nearly $11 billion in assets in its Grayscale Ethereum Trust (ETHE 0.60%), which it attempts to convert into a spot price ETF. However, it is much smaller than the Grayscale Bitcoin Trust before converting to its spot-price ETF, which now houses over $20 billion in assets.

These new Ether ETFs could attract the attention of traditional and institutional investors, but they probably won’t gain as much momentum as the Bitcoin spot price ETFs did earlier this year. Ether also lacks major short-term catalysts comparable to Bitcoin halvedwhich cut mining rewards in half earlier this year.

Should you buy Ether ETFs?

Ether ETFs may not attract as many investors as Bitcoin ETFs, but they could represent an easy way for investors to gain exposure to Ether without purchasing the coins directly. But investors should always pay attention to fees, see if they actually match the spot price of Ether, and realize that they won’t be able to stake their holdings.

Therefore, investors should not rush to buy Ether ETFs once they hit the market. Instead, they should wait and see if the convenience of owning these ETFs in a brokerage account outweighs the benefits of owning Ether in a brokerage account. crypto wallet.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Bitcoin, Coinbase Global, Ethereum, and Solana. The Motley Fool has a disclosure policy.

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Ethereum

QCP sees Ethereum as a safe bet amid Bitcoin stagnation

Published

4 months ago

31 July, 2024

Chain Feed Staff

QCP, a leading trading firm, has shared key observations on the cryptocurrency market. Bitcoin’s struggle to surpass the $70,000 mark has led QCP to predict Selling pressure is still strong, with BTC likely to remain in a tight trading range. In the meantime, Ethereum (ETH) is seen as a more promising investment, with potential gains as ETH could catch up to BTC, thanks to decreasing ETHE outflows.

Read on to find out how you can benefit from it.

Bitcoin’s Struggle: The $70,000 Barrier

For the sixth time in a row, BTC has failed to break above the $70,000 mark. Bitcoin is at $66,048 after a sharp decline. Many investors sold Bitcoin to capitalize on the rising values, which caused a dramatic drop. The market is becoming increasingly skeptical about Bitcoin’s rise, with some investors lowering their expectations.

Despite the continued sell-off from Mt. Gox and the US government, the ETF market remains bullish. There is a notable trend in favor of Ethereum (ETH) ETFs as major bulls have started investing in ETFs, indicating a bullish sentiment for ETH.

QCP Telegram Update UnderlinesIncreased market volatility. The NASDAQ has fallen 10% from its peak, led by a pullback in major technology stocks. Currency carry trades are being unwound and the VIX, a measure of market volatility, has jumped to 19.50.

The main factors driving this uncertainty are Value at Risk (VaR) shocks, high stock market valuations and global risk aversion sentiment. Commodities such as oil and copper have also declined on fears of an economic slowdown.

Additionally, QCP anticipates increased market volatility ahead of the upcoming FOMC meeting, highlighting the importance of the Federal Reserve’s statement and Jerome Powell’s subsequent press conference.

A glimmer of hope

QCP notes a positive development in the crypto space with an inflow of $33.7 million into ETH spot ETFs, which is giving a much-needed boost to ETH prices. However, they anticipate continued outflows of ETHE in the coming weeks. The recent Silk Road BTC moves by the US government have added to the market uncertainty.

QCP suggests a strategic trade involving BTC, which will likely remain in its current range, while ETH offers a more promising opportunity. They propose a trade targeting a $4,000-$4,500 range for ETH, which could generate a 5.5x return by August 30, 2024.

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Ethereum

Ethereum Whale Resurfaces After 9 Years, Moves 1,111 ETH Worth $3.7 Million

Published

4 months ago

31 July, 2024

Chain Feed Staff

Ethereum records $17.9 billion in spot volume despite 3% drop

An Ethereum ICO participant has emerged from nearly a decade of inactivity.

Lookonchain, a smart on-chain money tracking tool, revealed On X, this long-inactive participant recently transferred 1,111 ETH, worth approximately $3.7 million, to a new wallet. This significant move marks a notable on-chain movement, given the participant’s prolonged dormancy.

The Ethereum account in question, identified as 0xE727E67E…B02B5bFC6, received 2,000 ETH on the Genesis block over 9 years ago.

Screenshot 2024 07 30 at 171307

This initial allocation took place during the Ethereum ICOwhere the participant invested in ETH at around $0.31 per coin. The initial investment, worth around $620 at the time, has now grown to millions of dollars.

Recent Transactions and Movements

The inactive account became active again with several notable output transactions. Specifically, the account transferred 1,000 ETH, 100 ETH, 10 ETH, 1 ETH, and 1 more ETH to address 0x7C21775C…2E9dCaE28 within a few minutes. Additionally, it moved 1 ETH to 0x2aa31476…f5aaCE9B.

Additionally, in the latest round of transactions, the address transferred 737,995 ETH, 50 ETH, and 100 ETH, for a total of 887,995 ETH. These recent activities highlight a significant movement of funds, sparking interest and speculation in the crypto community.

Why are whales reactivating?

It is also evident that apart from 0xE727E67E…B02B5bFC6, other previously dormant Ethereum whales are waking up with significant transfers.

In May, another dormant Ethereum whale made headlines when it staked 4,032 ETHvalued at $7.4 million, after more than two years of inactivity. This whale initially acquired 60,000 ETH during the Genesis block of Ethereum’s mainnet in 2015.

At the time, this activity could have been related to Ethereum’s upgrade known as “Shanghai,” which improved the network’s scalability and performance. This whale likely intended to capitalize on the price surge that occurred after the upgrade.

Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Ethereum

Only Bitcoin and Ethereum are viable for ETFs in the near future

Published

4 months ago

31 July, 2024

Chain Feed Staff

BlackRock: Only Bitcoin and Ethereum Are Viable for ETFs in the Near Future

Bitcoin and Ethereum will be the only cryptocurrencies traded via ETFs in the near future, according to Samara Cohen, chief investment officer of ETFs and indices at BlackRock, the world’s largest asset manager.

In an interview with Bloomberg TV, Cohen explained that while Bitcoin and Ethereum have met BlackRock’s rigorous criteria for exchange-traded funds (ETFs), no other digital asset currently comes close. “We’re really looking at the investability to see what meets the criteria, what meets the criteria that we want to achieve in an ETF,” Cohen said. “Both in terms of the investability and from what we’re hearing from our clients, Bitcoin and Ethereum definitely meet those criteria, but it’s going to be a while before we see anything else.”

Cohen noted that beyond the technical challenges of launching new ETFs, the demand for other crypto ETFs, particularly Solana, is not there yet. While Solana is being touted as the next potential ETF candidate, Cohen noted that the market appetite remains lacking.

BlackRock’s interest in Bitcoin and Ethereum ETFs comes after the successful launch of Ethereum ETFs last week, which saw weekly trading volume for the crypto fund soar to $14.8 billion, the highest level since May. The success has fueled speculation about the next possible ETF, with Solana frequently mentioned as a contender.

Solana, known as a faster and cheaper alternative to Ethereum, has been the subject of two separate ETF filings in the US by VanEck and 21Shares. However, the lack of CME Solana futures, unlike Bitcoin and Ethereum, is a significant hurdle for SEC approval of a Solana ETF.

Despite these challenges, some fund managers remain optimistic about Solana’s potential. Franklin Templeton recently described Solana as an “exciting and major development that we believe will drive the crypto space forward.” Solana currently accounts for about 3% of the overall cryptocurrency market value, with a market cap of $82 billion, according to data from CoinGecko.

Meanwhile, Bitcoin investors continue to show strong support, as evidenced by substantial inflows into BlackRock’s iShares Bitcoin Trust (NASDAQ: IBIT). On July 22, IBIT reported inflows of $526.7 million, the highest single-day total since March. This impressive haul stands in stark contrast to the collective inflow of just $6.9 million seen across the remaining 10 Bitcoin ETFs, according to data from Farside Investors. The surge in IBIT inflows coincides with Bitcoin’s significant $68,000 level, just 8% off its all-time high of $73,000.

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Ethereum

Ethereum Posts First Consecutive Monthly Losses Since August 2023 on New ETFs

Published

4 months ago

31 July, 2024

Chain Feed Staff

Ethereum sees first monthly consecutive losses since August 2023 amid new ETFs

Available exclusively via

Bitcoin ETF vs Ethereum: A Detailed Comparison of IBIT and ETHA

Andjela Radmilac · 3 days ago

CryptoSlate’s latest market report takes an in-depth look at the technical and practical differences between IBIT and BlackRock’s ETHA to explain how these products work.

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