📊｜What sparks will happen when the Mentougou incident meets the Ethereum ETF🔥
🗒️The net inflow of US spot Ethereum ETFs may be only 35% of that of spot Bitcoin ETFs, and the distribution of funds tends to be downward.
🔻In the past six months, the net inflow of Bitcoin ETFs has been about $4.7 billion to $5.4 billion. The return rate of funds flowing into Ethereum may be lower than expected, partly because investors may view Bitcoin and Ethereum as sufficiently similar assets rather than as completely different investment options. Therefore, funds designed for Bitcoin ETFs may also flow into Ethereum rather than be independently allocated.
🔻The Mentougou incident has limited impact on the selling pressure on the market, especially if the inflow of funds to Bitcoin ETFs is relatively large. If the coins in Mentougou are sold for a long time, the market impact will gradually decrease, especially in combination with the upcoming interest rate cuts and election factors. If the massive selling of Mentougou causes the market to plummet, investors should see this as an opportunity to buy cheap chips. This is similar to the situation when the altcoins plummeted when the German government sold coins. If you didn't buy them at that time, chasing the rise now may mean missing out on a 20%-30% increase.
Since the launch of the Bitcoin ETF, the influx of institutional capital has driven a significant increase in the price of Bitcoin, about 40%, and the price has further increased by more than 100% after the market began to anticipate the approval of the ETF.
🔻For Ethereum, the impact may be more significant because, unlike Bitcoin, Ethereum's inflation rate has been close to zero over the past year, and an additional $16 billion of Ethereum needs to be purchased each year to keep the supply constant. The proof-of-stake protocol adopted by Ethereum means that stakeholders do not have to sell newly acquired assets to pay for operating costs, which reduces selling pressure and may make Ethereum appreciate faster than Bitcoin. In addition, a large amount of Ethereum is locked in staking contracts or DeFi applications, and about 40% of the Ethereum supply is "partially or completely unsaleable", which limits its market liquidity and may further push up prices.
♦️In general, the successful launch of the Ethereum ETF will bring a large amount of capital inflows. In addition, some whales such as TRON founder Justin Sun have been increasing their holdings of ETH, and it is only a matter of time before Ethereum breaks new highs
