Ethereum ETFs ▶️
Second-largest crypto makes its WallStreet debut. Nine US spot ETFs go live with concerns about inflows and Grayscale sell-off. Are ETH restaking projects cooling off? Another Bitcoin sell-off coming?
Hello, y'all. Have you made it to the Ethereum ETF party yet?
If not, then just play the 👉 Music Nerd quiz game 🎵
It’s been so long, that it feels like a non-event. Well, almost.
Like a leaking tap in the bathroom that refuses to fix, Ethereum ETFs lived a lifetime on their way to approval.
The Securities and Exchange Commission (SEC) have finally issued THE FINAL approval and now the nine US spot Ethereum ETFs are live and up for grabs.
Read: Ethereum ETFs On July 23 🟢
Read: Ethereum ETFs: All You Need To Know 🛎️
What do market experts think?
The larger consensus is that the response is going to be underwhelming - Decrypt.
Greg Magadini, derivatives director at blockchain data provider Amberdata.
“I think the inflows are going to disappoint for the ETH ETFs.”
James Butterfill, head of research at Jersey-based asset manager CoinShares.
“It is highly likely the initial weeks will be marred by outflows from the Grayscale ETH product, in a similar way to the Bitcoin closed-end fund that saw outflows when it became an ETF—investors had been ‘locked in’ due to the steep discount to net asset value.”
What’s the deal with Grayscale? As of July 22, 2024, the Grayscale Ethereum Trust (ETHE) has assets under management totalling approximately $9.2 billion.
Grayscale transferred over $1 billion in Ethereum to Coinbase ahead of US ETF trading debut. The movement of funds could lead to outflows from the Grayscale Ethereum Trust, potentially impacting Ether's price.
Will Cai, Kaiko Research head of indexes
“The launch of the futures-based ETH ETFs in the US late last year was met with underwhelming demand, all eyes are on the spot ETFs’ launch with high hopes on quick asset accumulation. Although a full demand picture may not emerge for several months, ETH price could be sensitive to inflow numbers of the first days.
ETHE’s discount to net asset value closed over the past few weeks, after widening between February and May as hopes of approval waned.”
The market is pitching anyway
Block That Quote 🎙️
Billionaire investor, Mark Cuban
“…she will be far more open to business, [artificial intelligence], crypto and government as a service.”
That’s Cuban on Kamala Harris. The presumptive Democratic nominee for president.
He reckons that business leaders are warming to the prospect that Kamala Harris might be a stronger advocate for crypto and other emerging tech sectors, if elected.
“The feedback I’m getting, but certainly not confirmed by the VP, is that she will be far more open to business, [artificial intelligence], crypto and government as a service. Changing the policies changes the message and lets everyone know she is in charge and open, literally, for business.”
Read: Joe Out. Kamala In? And Crypto 🤔
Who else is warming up? Epic Games founder and CEO Tim Sweeney.
Restaking Projects Are Cooling Off?
EigenLayer, the protocol that pioneered Ethereum's multibillion-dollar restaking sector, is seeing a 20% drop in total value of crypto deposited since peaking at $20 billion on June 6, reports DL news.
Since its debut last year, EigenLayer has become the second largest DeFi protocol on Ethereum, managing over $15 billion in crypto.
Read: Ethereum Staking [Feat. Eigen Layer] 🧑🌾
Others in the same boat: Affiliated "liquid restaking" protocols like Renzo and Kelp DAO have also experienced significant outflows of 44% and 17%, respectively, over the past month.
Why the slump? Reduced incentives in the form of points, which are used to allocate tokens in future airdrops.
Ian Unsworth, founder of Kairos Research
“Restaking, whether EigenLayer, Symbiotic, Karak, etc. today is all incentivised by points. Right now I think we can attribute outflows to incentives being massively reduced from where they were a few months ago.
Because there are still no Actively Validated Services (AVS) rewards, we have to attribute outflows due to lack of current incentives. AVS rewards for EigenLayer aren’t far away, and without incentives, we believe we’ll see a more ‘organic’ market equilibrium be created.
I’d like to be clear this is a healthy step in the process … and we believe restaking will continue to be a massive market, and an important influence on the overall Ethereum network.”
Points are crypto-based loyalty rewards.
Developers see it as a way to measure users’ contribution to a protocol based on predefined metrics.
It’s accepted that the points metric is what will be used to allocate tokens in future airdrops and juice engagement.
Proponents believe restaking could unlock "100x faster innovation" in crypto-based technology, while critics warn it could destabilise Ethereum.
Ether.Fi CEO Mike Silagadze
“Anybody that has the word AVS or restaking is just getting [investor] money shoved down their throat.”
In The Numbers 🔢
950 million
The monthly active users on Telegram, Pavel Durov founder and CEO.
Surge in crypto gaming
The increase in users is largely driven by the popularity of hyper casual crypto games on Telegram.
Notcoin success: Notcoin, a tap-to-earn game, allowed players to convert in-game earnings into NOT tokens on The Open Network (TON). The biggest gaming token launch of the year.
Hamster Kombat phenomenon: Hamster Kombat, another tap-to-earn game has attracted over 250 million users, becoming a global sensation.
Expanding gaming ecosystem
Emerging titles: Other games like Yescoin, TapSwap, Catizen, and PixelTap have also gained traction.
Token launch plans: Many of these games are planning to launch their own tokens, utilising the TON blockchain for enhanced functionality.
Integration of TON: Telegram has reintegrated TON into its platform, allowing for shared ad revenue with channel owners.
Read: TON - Next $100B Blockchain? 🟢
Another Sell-off Coming?
This time it’s Mt. Gox, again.
Well, they’ve got to do what they’ve got to do.
Pay back the creditors.
Mt. Gox again began shifting funds on July 23.
The first transfer involved 42,587 BTC sent to an unknown address, followed by 5,110 BTC sent to both Bitstamp and another unknown wallet.
This activity aligns with Mt. Gox's plans to promptly reimburse creditors, which have been in the works since its repayment announcement on July 5.
Arkham Intelligence data, Mt. Gox holds 90,344 Bitcoin worth $6.02 billion.
It is outdated, and its current holdings are around 42,744 BTC worth $2.85 billion.
On July 22, Mt. Gox began preparing to repay creditors through Bitstamp, according to Arkham Intelligence.
Market reaction: Bitcoin's price rebounded to above $67,000 after dipping to $66,267.87 during the transfers.
Analysts suggest that while large investors may be buying the dip, the market could face volatility due to upcoming political events and the distribution of Mt. Gox funds.
The Surfer 🏄
The BNB Foundation has completed its 28th quarterly token burn, removing 1,643,698.8 BNB tokens valued at approximately $971 million from circulation. The BNB auto-burn mechanism, comes on back of ecosystem's seventh anniversary and aims to reduce the total supply to 100 million BNB.
Real Bedford FC has acquired 66.9 BTC valued at $4.5 million, now total Bitcoin holdings to 82.7 BTC. Investment supports the club's goal of advancing to the Premier League while enhancing facilities and community initiatives.
Marathon Digital, the largest Bitcoin mining company, has been ordered to pay $138 million for breaching a non-disclosure agreement with Michael Ho, co-founder of US Bitcoin Corp. The jury found that Marathon executed Ho's growth strategy without compensating him, violating their contract.
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