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Author: Jack Inabinet, Bankless; Compilation: Wuzhu, Bitchain Vision
After a difficult and unnecessary lengthy approval process, spot Ethereum ETFs are finally traded on traditional stock exchanges!
Cryptocurrencies have been eagerly awaiting the launch of these products for years, and their arrival is expected to provide direct economic incentives for the world’s largest asset managers to drive Ethereum, catalyze unprecedented capital flows into ETH and lead to mainstream acceptance.On-chain activity.
Today, let’s discuss what the future will be for Ethereum’s most popular indicator – price – in the post-ETF era?
Looking to the future
Spot cryptocurrency ETFs have limited performance, but many expect spot ETFs to be good for ETH, just as they are good for BTC.
The newly launched spot BTC ETF is one of the hottest financial products of the year, absorbing $18.6 billion in Grayscale’s GBTC outflows and amassing an additional $17 billion in asset management scale.
This is highlighted by the relative success of spot BTC ETFs, with BlackRock alone surpassing Invesco’s retail-friendly QQQ Nasdaq 100 Fund, ranking fourth among ETF funds by year-to-date inflows.
While the absolute dollar value of spot BTC ETF inflows is indeed impressive, the apparently limited inflow comes from the types of net new buyers these products are designed to attract, such as pensions.
While spot BTC ETFs allow every major financial institution to invest directly, institutional investors have more limited demand for these products.
Only investment advisers (who allocates private capital that could have been used to purchase BTC in alternative markets) and hedge funds (entities that are unlikely to engage in targeted BTC exposure) are significant buyers in non-isolated situations.
While BTC prices did rise in USD after ETFs, it also didn’t keep up with Wall Street’s best performing AI stocks, just barely standing with bland stocks like General Electric, GoDaddy, Walmart and Progressive Insurance.
Spot ETFs did not magically push new capital to buy cryptocurrencies; on the contrary, funds flowing into BTC ETFs came from strong risk appetite in the market, and unfortunately, even if this highly anticipated catalyst emerged, BTC was not convinced.Break through and maintain historical highs.
As BTC peaked more than four months ago and global economic data continued to weaken, it is doubtful whether the broader market tailwinds can continue to support high-risk crypto assets.
Furthermore, given that there are many existing ways in which mature investors can buy ETH exposure using futures and trust-based products through TradFi, it is unlikely that there will be a large amount of capital waiting off-the-counter to buy slightly different spot products.
Milestones worth celebrating
Spot ETFs are the ultimate catalyst to spark investors’ enthusiasm for ETH and the entire license-free blockchain, but with the final approval, Ethereum will increasingly judge based on its current performance as people blur the futureThe enthusiasm has faded.
We have reached a critical moment for Ethereum; we need to accelerate adoption so that the ecosystem can replace traditional financial systems.Fortunately, as issuers promote their products and investors seek information about blockchains designed to replace traditional financial systems, ETF approval should put Ethereum in the spotlight in the coming months.
While the mainstream has not yet explored hidden on-chain scenarios, influencers in the financial world such as BlackRock CEO Larry Fink, may beg for non-cryptoCurrency natives interact with blockchain technology in person.
Once the public begins to recognize the huge improvements that blockchain brings over the outdated financial system, on-chain applications will be exponential as more individuals begin to store wealth in digital assets and leverage blockchain technology.Growth, thus positively affecting the basic bull market of prices and cryptocurrencies!
Bitcoin’s simple digital gold narrative failed to inspire mainstream excitement for cryptocurrencies and pushes token valuations to record highs, while the advent of bullish sentiment on-chain will drive on-chain applications and give investors a deeper understanding of theindustry.
ETFs give traditional financial giants reason to be excited about cryptocurrencies and provide Ethereum with the best opportunity to be understood, but this lack of tangible results could have dire consequences, marking the beginning of the decline of Ethereum and underminingThe credibility of the entire cryptocurrency revolution.
