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Author: 0xkyle, chain analyst Source: substack,@oxkyle translation: Shan Ouba, Bitchain Vision
Congratulations to everyone, dear cryptocurrency enthusiasts!In an unexpected move, the US Securities and Exchange Commission (SEC) approved the rules for creating Ethereum ETF -although Gary Gensler in publicEssence
I will not explain the reasons behind this in detail, which leaves the political commentators on Twitter to discuss.Our main focus is that this has happened,This shows that the US government’s attitude towards cryptocurrencies has changed significantly.
also,FIT21 Act(“FIT21 provides the necessary supervision clarity and strong consumer protection for the prosperity of the digital asset ecosystem in the United States”) further promotes this progress.A new era of regulatory compliance is coming to the company.
The US government’s new mild attitude towards cryptocurrencies is very good. You can see how the market digests this information-Real World Assets (RWA) and the Ethereum plate have performed well this month.
I believe,With the launch of Ethereum ETF and the recent mild attitude towards cryptocurrencies, these two sectors will continue to perform well in the next few weeks and months.
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introduce
Overview
The arguments of this article can be divided into two parts: the first is Ethereum as an excellent manifestation of asset categories and its related alternatives, and the other is the embodiment of the RWA sector as the overall “bullish cryptocurrency government’s position”.
These two sections are closely connected because:
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With the SEC approval of Ethereum ETF, this marks a gentle attitude towards cryptocurrencies, which means that RWA assets promoted by the institution will also see more capital inflows (as we have seen in the relationship between ONDO and Blackrock, I have seen itThat’s).
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The institution’s “investment theory” of Ethereum has always been a settlement of tokens, stable coins, and real -world -major institutions will discuss around RWA assets on Ethereum, which has always been the main narrative of Ethereum.
So, in summary::
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Make more Ethereum and its best alternative
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Make more RWA -ONDO is my favorite
You can also consider other RWAs, but the reason why I do n’t do this is because ONDO itself is the cottage of the Ethereum, which means that you will be more exposed to market risks when the downside trend appears.I prefer simple operations.
Deep analysis of Ethereum ETF
Now let’s analyze the Ethereum ETF transaction.I think this is very interesting, because different from Bitcoin ETF, we have a lot of time to “prepare” -the Ethereum ETF make many market participants caught off guard.This is why when the approval of Ethereum ETF changed sharply overnight, we saw a significant rise of 25%in a day.
The problem is that the market rarely allows you to repeat the same transaction -the argument of this transaction is based on the view that the Ethereum ETF has not been digested by the market. “To measure this, we must first look at the performance of Bitcoin ETF:
The critical date of Bitcoin ETF
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June 15, 2023: The critical week of Bitcoin, BlackRock showed their intentions and submitted the spot Bitcoin ETF application
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October 23, 2023: The moment of the possibility of really consolidating the possibility of Bitcoin ETF is that SEC does not appeal to the court’s court’s decision on GrayScale, which means that they are seriously considering → the market is therefore confirmed by confirmation
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January 10, 2023: Bitcoin ETF was officially launched
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Some things you need to pay attention to:
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The announcement of BlackRock ETF basically opened the narrowing of discounts
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Only when the ETF is launched, the discount completely disappears (obvious statement, but think about it, just like “free money”. Now we have “evidence” that ETFs can/will be launched. The discount maydisappear)
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After June 15th, the number of non -liquidation contracts (OI) surged, and fell at some time in August, but began to rise in October, reaching the peak in February
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I think CME’s non -liquidation contract volume, because this is the best tool for observation agencies
Now, let’s see the situation of Ethereum.
The critical date of Ethereum ETF
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May 20, 2024: Bloomberg Analysts raised the probability of approved by Ethereum ETF from 25%to 75%
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May 23, 2024: SEC Approval Exchange Application, allows listing spot Spot Ethereum ETF
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Interestingly:
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-The discount was reduced from -24%to -1.28%within 2 days. In contrast, GBTC spent a few months to reduce the discount.
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-TME’s unclear contract growth is not as strong as Bitcoin ETF.
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-The main gains in Ethereum have been reflected in the probability adjustment, not in the event itself -that is, the market has digested the ETF announcement in advance, which is the opposite of Bitcoin.Every announcement of Bitcoin will lead to a significant increase in prices; as I said, the same transaction will not work twice.
In this context, let’s break down:
Argument and risk
I will start from trading risk, because I think the downlink risk of weighing transactions is more important than upward potential -managing downlink risks, so that the uplink space naturally appears.
risk:
1. Main risk: The market has been touched or close to the top/time stop loss.
The argument that supports this view is the rapid reduction of discounts and the price performance of Ethereum before the announcement.It can be said that these people know how to trade -this is basically a transaction that is only rising, but the amount of CME and the total unsuitable contract contract basically stagnated.
In fact, the number of contracts for U.S. -Wae Warehouse is only 4 billion than the Bitcoin unconcelete contract on January 10, which may indicate that “everyone has done more people, who will buy it?”
Honestly, I think this argument is quite powerful.I think the market is seriously advanced. Even if the ETF has just been launched, the number of contract contracts has exceeded a record high, which is different from the Bitcoin transaction. At that timeCanghe contract.
The market equates “ETF approval” with the “Ethereum ETF”, which are completely different.Look at the reaction of the price in the approval announcement, and the discount is so fast, this view is reasonable.
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I actually agree with this view. This is why I said at the beginning of the article:“These two sectors will continue to perform well in the next few weeks and months.”
I believe that when people realize that these effects are not in actual effect, we will see some stop loss at that time, and you can start buying at that time.I have set up payments at certain price levels -slowly and steadily completing the purchase order.The following is an example of how I trade:
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2. Unique regulatory risk
I don’t comment much about this because I don’t understand how regulatory risks work.But from the content I read on Twitter, people say that only 19B-4 is approved, not S-1.
This basically means that “it can be challenged in the next 10 days” (?) ←I don’t know if this is true!But if it is true, if the whole thing is a scam, it will definitely constitute a huge risk for transactions.
Or, there may be some other risks of “hidden in the lines” are related to this -I don’t know.But this is definitely a thing that needs to be remembered.
I like this transaction, what do I do?
I know this article is long, but we are entering the wonderful part.The story so far is: Ethereum is good, but the market may be ahead.However, in the long run, it is still a good catalyst.So, what do you buy?
When choosing a bet related to Ethereum, many participants will fall into the choice difficulty-after all, you can choose to choose the mobile pledge derivative (LAYER 2, ZK-Rollups, decentralized financial protocol (DEFI), DEFI)Lost in currency and so on.
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Therefore, when we draw the performance of all these currencies, we can see that the best performance is (sorted by performance from high to low):
Pepe, LDO, Uni, Pendle, Metis, AAVE
This is based on a one -week retrospective period (that is, May 18 to May 26).This is a rough measurement method -a more scientific method is to calculate the Beta value of these currencies during a more “correct” retrospective period -but for me, this method is effective.
I personally choose to do more PEPE and Pendle because they are popular in the market throughout the year.Not only do they perform well, but they are also one of the best currencies this year.
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Therefore, I believe PEPE and PENDLE provide the greatest room for upward.They also have an additional advantage, that is, the market loves high attention currency; I will not ignore the strength of the PEPENDLE combination.
It’s time to conduct RWA transactions
I spent too long to talk about ETH ETF transactions. Now I have no energy to write the RWA as the RWA.The argument is simple: Since entering cryptocurrencies, RWA has been promoted by various institutions, and ETH has always been the cooperation between the main chain in this area -ONDO and BLACKRock.
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Therefore, this is equivalent to betting on the overall narrative development of Ethereum.For asset selection, I mainly choose ONDO, and some of the people I know can first order Canto / Dusk.Personally, my approach is simple -1 ONDO = 1 Condo.
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By the way, I think ETH/SOL currency pairs are a good currency pair transaction.In general, my feeling is that SOL has temporarily seen, and Multi -ETH/short Sol Beta will be very attractive.
