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On July 24, 2024
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Ethereum May Be Headed For A Sell-Off After ETFs Launched: 10x Research
Despite potential short-term volatility, Ethereum's long-term prospects remain promising with anticipated investments and market growth. A new 10x Research report suggests investors approach Ethereum ETH/USD with caution, suggesting the ETF launch might trigger a sell-off rather than a sustained rally. What Happened: Despite the initial excitement, 10x Research research points out that historical patterns suggest a potential market correction following such launches. They note that similar events, from the Bitcoin futures launch in December 2017 to the recent Bitcoin spot ETF debut, have typically led to price corrections shortly after. The report highlights several factors that could dampen enthusiasm for Ethereum ETFs: Limited marketing efforts by ETF issuers, potentially resulting in lower retail and institutional interest. A relatively low annualized funding rate for Ether futures (7-9%), which may not attract significant arbitrage flows from institutions. Ethereum's staking yield of just 3.12%, which is less attractive in the current high-interest-rate environment. Stagnant growth in Ethereum network activity, with user numbers similar to those from three years ago. Technically, the analysts suggest that Ethereum's price, currently trading around $3,500, might be overbought according to the stochastics indicator. Also Read: EXCLUSIVE: How AI Can Unlock The True Potential Of Web3 They propose a stop-loss at $3,560 for any short positions. Interestingly, the report also touches on the growing narrative that this cycle might favor Solana over Ethereum, citing higher active user numbers for Solana SOL/USD (14.2 million vs. Ethereum's 7.5 million). For investors looking to capitalize on these market dynamics, 10x Research suggests considering a long Bitcoin vs. short Ether strategy, or using options to sell ETH calls and buy Bitcoin calls. The approval of Ethereum ETFs, which came after the Securities and Exchange Commission (SEC) gave the green light to exchange applications in May, has been highly anticipated in the crypto community. This development follows the successful launch of Bitcoin spot ETFs in January, which have accumulated over $54 billion in assets under management. What's Next: As the crypto landscape continues to evolve rapidly with these institutional-grade investment vehicles, industry professionals and enthusiasts alike will be eager to discuss the implications at the upcoming Benzinga Future of Digital Assets event on Nov. 19. Read Next: Michelle Obama For Democratic Nominee? Crypto Bettors Think Her Odds Have Just Tripled Image: Shutterstock Market News and Data brought to you by Benzinga APIs
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Ethereum ETFs Are Live: Here's How Experts Assess Their Launch
The full impact of ETH ETFs may take 6-9 months to materialize as financial institutions integrate them into portfolios. Nine spot Ethereum ETFs began trading on US exchanges Tuesday, marking another milestone in the mainstream adoption of digital assets. What Happened: This launch comes just six months after the debut of spot Bitcoin ETFs in the United States, which have already accumulated over $54 billion in assets under management. The new ETH ETFs, offered by major financial players including BlackRock BLK, Fidelity, Grayscale, and others, are now available on the Cboe CBOE, NYSE Arca, and Nasdaq exchanges. Grayscale's Ethereum Mini Trust stands out with the lowest fee of 0.15% and is set to start with approximately $1 billion in assets. In the early hours of trading, the newly launched Ethereum ETH/USD ETFs demonstrated significant market interest. According to data from Yahoo Finance, analyzed by The Block Pro Research, these funds collectively amassed $205 million in trading volume within the first 60 minutes. The momentum continued, with the total volume reaching $300 million approximately 75 minutes after the market opened, at around 10:45 a.m. EST. To put these figures into perspective, Bloomberg's Senior ETF Analyst Eric Balchunas offered his insights on the initial trading performance. "Here's volume after first 15 minutes of trading. Total of $112m traded for the group (which is A TON vs a normal ETF launch but only about half of what bitcoin ETFs' volume pace was on DAY ONE, altho 50% would exceed expectations IMO)," he said. He added that the comparison excluded GBTC and if it was included the ETH ETFs do about 20% to 25% of the volume of the BTC ETFs. "Regardless, very solid showing," he said. Also Read: EXCLUSIVE: How AI Can Unlock The True Potential Of Web3 What Others Said: Nathan McCauley, CEO of Anchorage Digital, hailed the launch as "a major step forward in regulatory clarity for the digital asset class." He emphasized that the ETF wrapper will provide a new pathway for safe and compliant exposure to Ethereum, potentially driving billions in inflows from both institutions and consumers. Konstantin Shulga, CEO and co-founder of Finery Markets, noted the accelerated adoption rate of digital assets and increased institutional involvement. He pointed out that Ethereum trading volumes rose by 32% in the first half of 2024 compared to the same period in 2023 in the OTC market. However, Shulga cautioned that the full impact of ETF approvals may not be realized for six to nine months, as it takes time for innovative products to be fully integrated into financial players' portfolios. Tom Duff Gordon, VP of International Policy at Coinbase COIN, described the approval of spot ETH ETFs as "a significant milestone in the crypto ecosystem," highlighting the ongoing shift towards digital assets in the global financial system. Coinbase is serving as the custodian for 8 of the 9 newly approved ETH ETFs. However, Sergei Gorev, risk manager at YouHodler, offered a more cautious perspective. He noted that despite the launch, ETH's price dynamics appear weak, suggesting that the market may not fully believe in the great success of Ethereum ETFs. Gorev also pointed out the possibility of a "buy-on-hearsay and sell-on-facts" scenario, particularly given the timing of the launch during a period when many investors are on vacation. David Ben Kay, a former advisor and member of the governing board of the Ethereum Foundation, said the launch is a step closer to broader adoption and closer integration into traditional financial markets. This launch comes at a time of increasing institutional interest in digital assets, as Ethereum continues to solidify its position as a key player in the blockchain and decentralized finance (DeFi) sectors. By providing a regulated investment vehicle, investors may have a greater sense of security and compliance. However, due to fees and market inefficiencies the ETF price may not always perfectly track Ethereum's spot price. "Despite risk mitigation, Ethereum remains a volatile asset, and ETF values can fluctuate accordingly. Management fees and expenses associated with ETFs can impact overall returns compared to direct cryptocurrency holdings," he said. "All in all, the issuance of the spot ETH ETF is definitely a positive move in the journey of broad adoption for cryptocurrencies, but it's likely that initial adoption and market impact may be limited until there is broader acceptance and understanding of crypto ETFs," he added. As the cryptocurrency landscape continues to evolve rapidly with developments like these ETH ETFs, industry professionals and enthusiasts alike are eager to discuss the implications and future trends. What's Next: The upcoming Benzinga Future of Digital Assets event on Nov. 19 will provide a timely platform for such discussions. Read Next: Michelle Obama For Democratic Nominee? Crypto Bettors Think Her Odds Have Just Tripled Image: Shutterstock Market News and Data brought to you by Benzinga APIs
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Ethereum ETFs have officially launched, marking a significant milestone in the cryptocurrency market. However, experts are divided on the potential consequences, with some predicting a sell-off while others remain optimistic about long-term growth.
In a landmark moment for the cryptocurrency market, Ethereum Exchange-Traded Funds (ETFs) have officially launched, opening up new avenues for investors to gain exposure to the second-largest cryptocurrency by market capitalization. This development comes on the heels of the successful launch of Bitcoin ETFs earlier this year, further solidifying the integration of digital assets into traditional financial markets 1.
The launch of Ethereum ETFs has elicited diverse opinions from market analysts and industry experts. While some view this as a positive step towards mainstream adoption, others caution about potential short-term market volatility.
Research firm 10x Research has raised concerns about a possible sell-off in Ethereum's price following the ETF launch. They argue that the event might trigger a "sell the news" reaction, similar to what was observed with Bitcoin ETFs. The firm suggests that Ethereum's price could potentially drop to the $1,700 - $1,800 range in the coming weeks 2.
Despite these concerns, not all experts share a bearish sentiment. Some industry insiders believe that the launch of Ethereum ETFs could lead to increased institutional adoption and long-term price appreciation. They argue that easier access to Ethereum through regulated investment vehicles could attract a new wave of investors, potentially driving up demand and price 1.
The introduction of Ethereum ETFs is expected to significantly impact market dynamics. These investment products allow traditional investors to gain exposure to Ethereum without directly holding the cryptocurrency, potentially broadening the investor base. However, this could also lead to increased correlation between Ethereum's price and broader market trends 1.
The approval and launch of Ethereum ETFs also signal a growing acceptance of cryptocurrencies by regulatory bodies. This development may pave the way for more crypto-based financial products in the future, further blurring the lines between traditional finance and the crypto ecosystem 2.
As the market digests the launch of Ethereum ETFs, investors and analysts alike will be closely monitoring price movements and trading volumes. The coming weeks and months will be crucial in determining whether the optimistic projections or the cautionary warnings prove more accurate in the evolving landscape of cryptocurrency investments.
Prominent traders discuss Bitcoin's strength against Ethereum, potential price levels, and the impact of ETF launches on the cryptocurrency market. The analysis covers recent market dips and future opportunities in the crypto space.
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Bitcoin reaches a 19-month high, while Grayscale introduces a new fund focused on AI-related cryptocurrencies. The crypto market shows signs of recovery and innovation.
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The cryptocurrency market experiences a significant downturn, with Bitcoin and Ether seeing substantial price drops. Multiple factors contribute to this crash, including regulatory concerns and market volatility.
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Bitcoin reaches a new high of $63,000 as U.S. institutional investors show increased interest. The cryptocurrency market experiences volatility due to political events, including a failed assassination attempt on former President Trump.
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ETFSwap (ETFS) is attracting attention from cryptocurrency investors, particularly those involved with meme coins like Shiba Inu and Dogecoin. This emerging token is being viewed as a potential alternative for investors looking to diversify their portfolios and recover from recent market corrections.
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