Markets
3 questions about the SEC’s abrupt approval of the ETH ETF
The United States Securities and Exchange Commission (SEC) confirmed yesterday that it has approved critical rule changes for allow exchange-traded funds holding Ethereum’s native token, EPF. Many people were caught off guard, knowing that last week almost everyone – from Bloomberg analysts to prediction markets – thought it was a lost cause.
Note: The opinions expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
I’ve never really understood why SEC Chairman Gary Gensler refrained from approving these spot ETH products, given the agency’s embarrassment during its proactive fight for listing Bitcoin ETFs .
Recall that a three-judge appeals court panel called the SEC’s reasoning for denying (and refusing and refusing) Bitcoin spot funds “arbitrary and capricious” because it had already approved products Bitcoin futures that did essentially the same thing. The same situation has this is true for ETH Moreover, and it is likely that a company would have been happy to litigate the issue in the same way that Digital Currency Group fought for Bitcoin ETFs.
This time, the SEC’s decision seems just as arbitrary, but in the opposite direction. In a interview with Jesse Hamilton of CoinDesk Hours before the approval was made public, Gensler said he would follow “how the courts interpret the law” and that “the D.C. Circuit took a different view, and we took that into consideration and have rotated”.
So why now? What does this mean for Ethereum in the future? And does this bode well for other cryptos?
As many have already noted, there appears to have been a sea change regarding the regulatory situation for crypto. On Thursday, the House took a historic vote to approve the most significant crypto-related legislation to date. This follows the upper and lower houses of Congress voting to repeal a controversial SEC cryptocurrency custody accounting rule.
With significant Democratic participation on both bills, it appears the US government’s long war on crypto is coming to an end. Notably, President Biden announced that he would not veto the crypto market structure bill, FIT21, which the White House officially opposes – a pretty significant concession.
It’s possible that all of these events on the Hill acted as a temperature check and helped convince Gensler that his approach to crypto was becoming a political risk. After all, former President Donald Trump just announced his massive support for crypto – and refusing ETH ETFs on the grounds, allegedly, that the SEC wasn’t having “productive” meetings with candidates would be great ammunition.
To be sure, the SEC hasn’t approved the upcoming listing of ETH ETFs – just Proposals 19b-4 from Cboe, NYSE Arca and Nasdaq, which would allow them to list the funds once companies like Ark Invest, Bitwise, BlackRock, Fidelity and Grayscale, among others, are getting their S-1 filings approved. It could take months.
First, the launch of ETH spot funds means there could soon be a lot more institutional interest in the second-largest cryptocurrency. Not only did this move act as a sort of seal of approval, but it will also create a familiar on-ramp for purchasing the asset for all family and family investors looking to diversify their 401(k)s into hedge funds, largely in the same way that ETFs did for bitcoin.
“A lot of people were caught offside by the Ethereum ETF announcement. Even though the Bitcoin ETF has created a crypto ETF roadmap for wire companies and large registered investment advisors, I still expect many institutional players to now be scrambling to prepare their sales teams to the state of Ethereum and putting the appropriate infrastructure in place,” Framework Ventures said. founder Michael Anderson said in an emailed statement.
And while ETFs are really just a way to gain exposure to an underlying asset, it’s also possible that these funds will attract more users to Ethereum itself. One scenario: Since the SEC likely won’t allow money managers to stake the underlying ETH, it’s possible that new ether investors decide they want to do it themselves to earn that extra money. ~3.5% yield.
Likewise, as Variant’s chief legal officer, Jake Chervinsky note on X, the approval likely answers a lingering question: whether or not ETH is a security. Chervinsky said that if these funds were allowed to be traded, it would likely mean that unstaked ETH, in particular, would not be considered a security by the agency. This in itself could entice more institutions to enter the market, given that many are currently hesitant simply due to regulatory uncertainty.
On a more technical level, many questions remain about what this would mean for Ethereum in a world where these funds buy large amounts of ETH (assuming they are as popular) as Bitcoin ETFs. To some extent, buying pressure would be significant for the network and surrounding Layer 2s.
Ethereum instituted a burn mechanism that destroys tokens with every transaction, which has long made the asset class deflationary. But with the growing popularity of L2s and alternative chains like Solana, Ethereum transaction volumes have fallen to a point where the supply of ETH is increasing again, which has long-term implications for price and demand. of the asset. ETFs could help support the ETH economy.
Finally, it will be interesting to see how the funds affect the economics of staking. Some people have been sounding the alarm about the amount of ETH being staked, now that apps like Lido make it very easy for people to lock up even small amounts of crypto. With the possibility of ETFs removing even more ETH from circulation, these concerns could be exacerbated.
As mentioned, the approval of ETH ETFs is something of an endorsement for Ethereum and likely an opportunity for the chain to solidify its already dominant brand position.
“Assuming that the Ethereum ETF sees even a fraction of the institutional flows that the Bitcoin ETF has seen, I think it is entirely possible that Ethereum will solidify itself as the undisputed leader in decentralized application platforms over the next few years, at least in terms of market share and valuation,” Anderson said.
But the move could also open the door for alternative chains like Cardano, Solana, and Ripple to further enter the world of high finance. Of course, Bitcoin and ETH had an easier time (all in perspective) because financial incumbents like CME had already adopted them. Ether futures have already been available on CME for three years, and it is not even clear if other crypto assets are being considered.
It’s also worth noting that while the SEC has implied that it believes ETH is a security, the agency has proactively stated that assets like SOL, ADA, and ALGO fit the definition set by the Howey test used to determine if something is an investment. contract. This may be a speed bump on the road to a spot SOL ETF.
Over the past 24 hours, Jupiter and JasmyCoin emerged as the top gainers among the top 100 crypto assets, while Bittensor and Mantra plunged as the top losers.
Top Winners
Jupiter
Jupiter (JUP) led the charge among the biggest gainers on July 27.
At the time of writing, the crypto asset had surged 12.6% in the past 24 hours and was trading at $1.16. JUP’s daily trading volume was hovering around $282 million, according to data from crypto.news.
JUP Hourly Price Chart, July 26-27 | Source: crypto.news
Additionally, the cryptocurrency’s market cap stood at $1.56 billion, making it the 62nd largest crypto asset, according to CoinGecko. Despite the recent price surge, the token is still down 42.6% from its all-time high of $2 reached on Jan. 31.
Jupiter functions as a decentralized exchange aggregator that allows users to trade Solana-based tokens. The platform also offers users the best routes for direct trades between multiple exchanges and liquidity pools.
In addition to being a DEX aggregator, Jupiter has expanded into a “full stack ecosystem” by launching several new projects, including a dedicated pool to support perpetual trading and plans for a stablecoin.
JasmyCoin
JasmyCoin (JASMI) has increased by 12% in the last 24 hours and is trading at $0.0328 at press time. JASMY’s daily trading volume has increased by 10% in the last 24 hours, reaching $146 million.
JASMY Hourly Price Chart, July 26-27 | Source: crypto.news
The asset’s market cap has surpassed the $1.5 billion mark, making it the 60th largest cryptocurrency at the time of reporting. However, the self-proclaimed “Bitcoin of Japan” is still down 99.3% from its all-time high of $4.79 on February 16, 2021.
JASMY is the native token of Jasmy Corporation, a Japanese Internet of Things provider. The platform seeks to merge the decentralization of blockchain technology with IoT, allowing users to convert their digital information into digital assets.
The initiative was launched by Kunitake Ando, former COO of Sony Corporation, along with Kazumasa Sato, former CEO of Sony Style.com Japan Inc., Hiroshi Harada, executive financial analyst at KPMG, and other senior executives from Japan.
Kaspa
Kaspa (KAS) saw a 100% increase in trading volume and an 8% increase in price over the past 24 hours, trading at $0.19 at the time of publication.
KAS Hourly Price Chart, July 26-27 | Source: crypto.news
According to data from CoinGecko, Kaspa now ranks 27th in the global cryptocurrency list, with a circulating supply of approximately 24.29 billion KAS tokens and a market capitalization of $4.59 billion.
Kaspa is a cryptocurrency designed to deliver a high-performance, scalable, and secure blockchain platform. Its unique Layer-1 protocol includes the GhostDAG protocol, a proof-of-work (PoW) consensus mechanism that enables faster block times and higher transaction throughput compared to standard blockchains.
Unlike Bitcoin, GhostDAG allows multiple blocks to be created simultaneously, speeding up transactions and increasing block rewards for miners.
Bonk
Bonk (BONK) is the only one coin meme which made it to this list of biggest gainers and jumped 8.6% in the last 24 hours. Trading at $0.000030, the Solana-based meme coin’s market cap has surpassed $2.1 billion, surpassing Floki (FLOKI), another competing dog-themed coin with a market cap of $1.78 billion.
BONK Hourly Price Chart, July 26-27 | Source: crypto.news
BONK’s daily trading volume hovered around $285 million. However, BONK is still down 33.5% from its all-time high of $0.000045, reached on March 4.
Bonk, a meme coin that rose to prominence in 2023, has contributed significantly to Solana’s value increase amid the meme coin frenzy.
Bonk started out as a simple dog-themed coin. It has since expanded its features to include integration with decentralized finance. The project also partners with cross-chain communication protocols, NFT marketplaces, and various other cryptocurrency ecosystems.
BONK trading pairs are now listed on major exchanges including Binance, Coinbase, OKX, and Bitstamp.
The big losers
Bittensor
Bittensor (TAO) was the biggest loser among the 100 largest crypto assets, according to data from CoinGecko.
At the time of writing, TAO, the native token of decentralized AI project Bittensor, was down 5%, trading around $344. The crypto asset had a daily trading volume of $59 million and a market cap of $2.43 billion.
TAO 24 Hour Price Chart | Source: CoinGecko
Bittensor, created in 2019 by AI researchers Ala Shaabana and Jacob Steeves, initially operated as a parachain on Polkadot before transitioning to its own layer-1 blockchain in March 2023.
Mantra
Mantra (OM) fell 6%, trading at $1.13 at press time. The digital currency’s market cap fell to $938 million. Additionally, the 82nd largest crypto asset has a daily trading volume of $26 million.
OM Price Hourly Chart, July 26-27 | Source: crypto.news
Mantra is a modular blockchain network comprising two chains, Manta Pacific and Manta Atlantic, specialized in zero-knowledge applications.
Coat
Coat (MNT) also saw a 2.4% drop in price, now trading at $0.8413. Currently, Mantle has a market cap of around $2.75 billion, which ranks 36th in the global cryptocurrency rankings by market cap, according to price data from crypto.news.
MNT Hourly Price Chart, July 26-27 | Source: crypto.news
Over the past 24 hours, MNT trading volume also fell by 6%, reaching $240 million.
Mantle, formerly known as BitDAO, is an investment DAO closely associated with Bybit. The MNT token is essential for governance, paying gas fees on the Mantle network, and staking on various platforms.
Built on the Ethereum network, Mantle provides a platform for decentralized application developers to launch their projects. It has become particularly popular for GameFi applications, leading to the formation of an internal Web3 gaming team.
Markets
Bitcoin Price Drops to $67,000 Despite Trump’s Pro-Crypto Comments, Further Correction Ahead?
Pioneer cryptocurrency Bitcoin has registered a 1.13% decline in the past 24 hours to trade at $67,400. Despite a strong pro-crypto stance from US presidential candidate Donald Trump at the Bitcoin 2024 conference, this massive selloff has raised concerns in the market about the asset’s sustainability at a higher price. However, given the recent three-week rally, a slight pullback this weekend is justifiable and necessary to regain the depleted bullish momentum.
Bitcoin Price Flag Formation Hints at Opportunity to Break Beyond $80,000
The medium-term trend Bitcoin Price remains a sideways trend amidst the formation of a bullish flag pattern. This chart pattern is defined by two descending lines that are currently shaping the price trajectory by providing dynamic resistance and support.
On July 5, BTC saw a bullish reversal from the flag pattern at $53,485, increasing its asset by 29.75% to a high of $69,400. This recent spike followed the market’s positive sentiment towards the Donald Trump speech at the Bitcoin 2024 conference in Nashville on Saturday afternoon.
Bitcoin Price | Tradingview
In his speech, Trump outlined several pro-crypto initiatives: he promised to replace SEC Chairman Gary Gensler on his first day in office, to establish a Strategic National Reserve of Bitcoin if elected, to ensure that the U.S. government holds all of its assets. Bitcoin assets and block any attempt to create a central bank digital currency (CBDC) during his presidency.
He also claimed that under his leadership, Bitcoin and cryptocurrencies will skyrocket like never before.
Despite Donald Trump’s optimistic promises, the BTC price failed to reach $70,000 and is currently trading at $67,400. As a result, Bitcoin’s market cap has dipped slightly to hover at $1.335 trillion.
However, this pullback is justified, as Bitcoin price has recently seen significant growth over the past three weeks, which has significantly improved market sentiment. Thus, price action over the weekend could replenish the depleted bullish momentum, potentially strengthening an attempt to break out from the flag pattern at $70,130.
A successful breakout will signal the continuation of the uptrend and extend the Bitcoin price forecast target at $78,000, followed by $84,000.
On the other hand, if the supply pressure on the upper trendline persists, the asset price could trigger further corrections for a few weeks or months.
Technical indicator:
- Pivot levels: The traditional pivot indicator suggests that the price pullback could see immediate support at $64,400, followed by a correction floor at $56,700.
- Moving average convergence-divergence: A bullish crossover state between the MACD (blue) and the signal (orange) ensure that the recovery dynamics are intact.
Related Articles
Frequently Asked Questions
A CBDC is a digital form of fiat currency issued and regulated by a country’s central bank. It aims to provide a digital alternative to traditional banknotes.
The proposal for a strategic national Bitcoin reserve is a major confirmation of Bitcoin’s legitimacy and potential as a reserve asset. Such a move could position Bitcoin in a similar way to gold, potentially stabilizing its price and encouraging other countries to adopt similar strategies.
Conferences like Bitcoin 2024 serve as essential platforms for networking, knowledge sharing, and showcasing new technologies within the cryptocurrency industry.
Markets
Swiss crypto bank Sygnum reports profitability after surge in first-half trading volumes – DL News
- Sygnum says it has reached profitability after increasing transaction volumes.
- The Swiss crypto bank does not disclose specific profit figures.
Sygnum, a Swiss global crypto banking group with approximately $4.5 billion in client assets, announced that it has achieved profitability after a strong first half, with key metrics showing year-to-date growth.
The company said in a Press release Compared to the same period last year, cryptocurrency spot trading volumes doubled, cryptocurrency derivatives trading increased by 500%, and lending volumes increased by 360%. The exact figures for the first half of the year were not disclosed.
Sygnum said its staking service has also grown, with the percentage of Ethereum staked by customers increasing to 42%. For institutional clients, staking Ethereum has a benefit that goes beyond the limitations of the ETF framework, which excludes staking returns, Sygnum noted.
“The approval and launch of Bitcoin and Ethereum ETFs was a turning point for the crypto industry this year, leading to a major increase in demand for trusted, regulated exposure to digital assets,” said Martin Burgherr, Chief Client Officer of Sygnum.
He added: “This is also reflected in Sygnum’s own growth, with our core business segments recording significant year-to-date growth in the first half of the year.”
Sygnum, which has also been licensed in Luxembourg since 2022, plans to expand into European and Asian markets, the statement said.
Markets
Former White House official Anthony Scaramucci says cryptocurrency bull market could be sparked by regulatory clarity
Anthony Scaramucci, founder of Skybridge Capital, says the next cryptocurrency bull market could be sparked by a new wave of clear cryptocurrency regulations.
In a new interview On CNBC’s Squawk Box, the former White House communications director said he and two other prominent industry figures traveled to Washington, D.C. to speak to officials about the dangers of Sen. Elizabeth Warren and U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s hardline approach to cryptocurrency regulation.
“Mark Cuban, myself, and Michael Novogratz were in Washington a few weeks ago to speak with White House officials and explain the dangers of Gary Gensler and Elizabeth Warren’s anti-crypto approach. I hope that message gets through…
“Overall, if we can get regulatory policy around Bitcoin and crypto assets in sync, we will have a bull market next year for these assets.”
Scaramucci then compares crypto assets to ride-hailing company Uber, saying regulators were initially wary of the service but eventually decided to adopt clear guidelines due to public demand.
“Remember Uber: Nobody wanted Uber. A lot of regulators didn’t want it. Mayors and deputy mayors didn’t want it, but citizens wanted Uber and eventually accepted the idea of regulating it fairly. I think we’re there now.”
The CEO also says young Democratic voters believe their leaders are making the wrong choices when it comes to digital assets.
“I think President Trump’s move toward Bitcoin and crypto assets has shaken Democrats to their core, and I think very smart, younger Democrats are recognizing that they are completely off base with their positions, completely off base with these SEC lawsuits and regulation by law enforcement, and now they need to get back to the center.”
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