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The market is in bleak, but there are still a lot of news about Ethereum.
Focusing on Ethereum spot ETFs, good news has been frequently released.First, Consenys announced that the SEC would stop investigating Ethereum securities issues. Later, there was market news that Ethereum spot ETFs are expected to be approved for online on July 2, and Standard Chartered Bank also came to join in the fun. It was rumored that it would build Bitcoin and Ethereum.trading platform.
Despite the large amount of news, the market is still not good because it is expected. As Bitcoin once fell below the $60,000 mark, Ethereum also returned to below $3,400.However, if you compare Ethereum, which fell to 2,900 due to insufficient narrative at the end of May, and compare the decline elasticity of mainstream coins in the past week, it can be seen that the expected appearance of ETFs still gives ETH strong price support.
Judging from the current nodes, the highly anticipated Ethereum spot ETF is about to be released. After listing, the performance has begun to become the focus of industry discussion. Whether the facts of selling will fall rapidly or the capital of institutions will turn the tide? The market is also completely different.view.
This year’s Ethereum trend can be described as twists and turns, but from the main narrative, it is nothing more than the hype market of Cancun’s upgrade and E spot ETF.
On March 13, Cancun’s upgrade was completed, and the highest ETH reached US$3,981. Since then, with the news of the ETF, the price has fallen all the way when the ETF was judged to be hopeless. After the extreme reversal, it rose to 3,600 overnight.Later, it continued to fluctuate at a high level in linkage with the market.
After the “618” stock transfer, the crypto market entered a cooling-off period again. Due to insufficient liquidity, prices are easily affected by emotions.In recent days, under the panic of ETF capital outflows and Mentougou selling pressure, mainstream value coins have continued to fall, but compared with Bitcoin falling from 65,000, falling 7.72% in a week, Ethereum’s elasticity is stronger (-3.18%), showing relatively strong performance.Supportive.Back to the market itself, in fact, Ethereum has also experienced many fundamental positive news recently.
First, the clarity of non-securities attributes.Consensys announced on social platforms last week that the SEC decided to end its 14-month investigation into Ethereum.Although the lawsuits surrounding ETH continue, this fact is undoubtedly a milestone in crypto regulation.
Abandoning the Ethereum investigation means that the SEC will not file any accusation that the sales of ETH are securities transactions. This point echoes the passage of Ethereum ETF19b-4. The potential meaning of passing 19b-4 is to eliminate the securities attributes of Ethereum..But before this news, there were still rumors that the US SEC would make a fuss about this. The reason is that the SEC Chairman has repeatedly avoided the Ethereum attributes, even after the ETF approved it.
On the other hand, if Ethereum no longer belongs to securities, the POS mechanism and pledge mining in the mechanism are likely not to belong to securities behavior. Ethereum spot ETF applicants are expected to add this function.Previously, due to the US SEC’s disgust with pledge, all applicants deleted the “pled” in the S-1 form, which aroused market suspicion about the competitiveness of ETFs.For investors, there are additional management fees without pledge income, so the rate of return is definitely not as good as buying ETH directly.Of course, this speculation lacks the consideration that large institutions such as banks and other institutions are not allowed to directly purchase virtual currencies under current US regulations.
The second biggest advantage is the approaching ETF time.Although the SEC Chairman mentioned in an interview that it would announce the application for Ethereum spot ETF this summer, the unspecified time point also made the market anxious.Just recently, the date has finally been estimated.On June 21, Bloomberg ETF analyst Eric Balchunas announced on social media that Ethereum spot ETF issuers are expected to submit their revised Form S-1 in the late afternoon.Thereafter, the SEC will notify the issuer of final modifications and validity, and the spot ETF is expected to be launched on July 2.Considering that it has previously accurately predicted the reversal of Bitcoin ETF listing and Ethereum ETF, this time point has a certain degree of credibility.
In addition, Standard Chartered Bank also announced that it is building a trading platform for Bitcoin and Ethereum. If the news is true, trading channels will be further broadened and the investor threshold will continue to be lowered.But from the current situation, traditional institutions should engage in transaction business, and there are still major challenges in regulatory feasibility and infrastructure.
There are frequent positive news, but the actual price performance can only be said to be unsatisfactory. There are many different opinions on the ETF that will be released soon.
In terms of market size, Bitcoin ETFs give an excellent sample.According to Farside Investors, since its launch in January, the net traffic of BTC-related products has reached US$14 billion and assets under management (AUM) exceeds US$50 billion. However, the size of Ethereum ETFs cannot help but worry.
Most analysts believe that Ethereum ETH can only account for 15-20% of Bitcoin’s share.JPMorgan analysts believe that by the second half of 2024, Ethereum ETF will only attract about $1 billion to $3 billion in net inflows.Mechanism Capital co-founder Andrew Kang also upheld a similar view, writing a detailed article analyzing the impact of Ethereum spot ETFs on the market.
In his view, excluding hedging transactions and spot rotations, the real net inflow of Bitcoin ETFs is $5 billion.According to EricBalchunas estimates, ETH’s traffic may be 10% of BTC, which means that the real net purchase traffic of ETFs in the first 6 months after passing may be $500 million, and the optimistic estimate is around $1.5 billion.
He stressed that Ethereum is not popular for ETFs that use traditional institutions such as pensions, endowments, sovereign wealth funds as their audience.First, Ethereum’s institutional market holdings are smaller than Bitcoin. Before the ETF passed, Ethereum holdings in CME only accounted for 0.3% of the supply, while BTC accounted for 0.6% of the supply. However, before the ETF was launched, ETH had already gone from low.The point rose 4 times, while BTC rose only 2.75 times, reflecting the limited room for ETH to rise.Second, from the quantitative data, Ethereum also performed poorly, with an annualized revenue of US$1.5 billion in 30 days, a price-to-earnings ratio of up to 300 times, and the price-to-earnings ratio after deducting inflation factors is negative.
The more realistic reason is that due to the suddenness of approval, the issuer did not spend a lot of time persuading holders to convert ETH into ETF form, and choosing ETFs also bears the opportunity cost of ETH pledge income accordingly.Andrew expects ETH to trade between $3,000 and $3,800 before the ETF is launched.After the ETF is launched, it is expected to be between $2,400 and $3,000.If BTC rises to $100,000 at the end of the fourth quarter of 2025/Q1, it may drag down the rise of Ethereum and altcoins, and ETH/BTC will be even lower, with the ratio between 0.035 and 0.06 in the next year.
There are bearish voices, and naturally there are bullish arguments.
Degentrading responded to Andrew Kang’s analysis, believing that Ethereum may reach $6,000 by September.He emphasized that in discussions with traditional financial experts, the market is more enthusiastic about ETH and even SOL. At the same time, although Ethereum is about one-third of Bitcoin, its liquidity is only about 10% of BTC.This means that the inflow of US$3-4 billion will have a substantial impact on ETH, and the grayscale ETH trust inventory also puts Ethereum in lower selling pressure than Bitcoin.A recent report by Deribit Insights also gave bullish signals, with the purchase premium of ETH September 4000 call options exceeding $12 million, indicating an increase in medium-term optimism.
Regardless of the outside dispute, the ETF issuer has already sounded the drum beat of the cost war.Last week, several spot Ethereum ETF issuers then submitted the revised S-1 form. From the perspective of fee rates, in order to seize the market, Ethereum’s fee rates are generally lower than those of Bitcoin. VanEck disclosed that it charges lower.To 0.20%, very close to Franklin’s 0.19%. Against this backdrop, other institutions such as BlackRock will be forced to keep the cost below 30 basis points.
Before that, Cathie Wood’s Ark Investment Management exited the competition for Ethereum ETF due to not making money.She mentioned that Bitcoin spot ETFs did not make any profit for the company because the handling fee charged to investors was too low, with a fee rate of only 0.21%.Although this is almost the same as the handling fees charged by other Bitcoin ETF issuers, it is still significantly lower than the fees charged by other non-cryptocurrency ETFs.
In this context, allowing pledge may add some competitiveness to Ethereum ETFs.Although no ETF issuer has modified the caliber to support pledge, the issuer will likely modify this in the future in the face of profit pressure.However, it is worth noting that if the issuer is staking, for security and efficiency reasons, the issuer may build nodes and become validators themselves, which will dilute the market share of other Ethereum ecological projects.
Back to Ethereum itself, as the largest application platform in the encryption field, the price of ETH actually represents the development of the entire encryption ecosystem.However, in recent years, as the development of applications and ecology has entered a bottleneck period, the Ethereum hype cycle has begun to focus on upgrading. In addition to the vitality brought by staking, it exists as a symbolic symbol of mainstream coins.
Compared with Bitcoin’s value consensus, Ethereum’s positioning in the eyes of institutions is quite ambiguous. On the one hand, it is blue-chip stocks in technology stocks, the absolute leader in the blockchain world, but on the other hand, it is easier to invest in products.The replaced existence is not as strong as Bitcoin’s value, and sometimes it even follows the decline but not the rise, and the increase is not as good as some US stocks.Especially in the current context of limited application innovation, Ethereum’s ecological growth has slowed down and the MEME cycle has also rotated. From time to time, the argument that Solana surpasses Ethereum will be heard.
Although it is controversial whether Ethereum is a better investment commodity than Bitcoin in terms of investment value, no one will deny Ethereum’s status and network effects.This is also why the market is paying close attention to Ethereum ETFs. Ethereum funds may flow into the altcoin market through pledge transmission, but Bitcoin funds will not.
Looking at various price views, it is also a high probability event that Ethereum will usher in high volatility after passing ETFs. Pay attention to the facts of selling. Short-term bearish and long-term bullish also meet the market’s price expectations. Before passing, various ecological coinsThe hype has begun, and perhaps this is one of the alternative ways to make profits.
