The ETH ETF just launched and it could potentially change everything!
Despite this, some people are expecting a dump first.
Here are my honest thoughts and what to expect
We all know Ethereum is the king of alts and largely moves in sync with the rest of altcoins.
When we look at the history of the entire market 99% of the time it's:
ETH up = alts up
ETH down = alts down
We saw what the ETF did to Bitcoin (trading 50% higher today than its launch) so obviously this is an important event to say the least.
Despite this, many people fear an initial dump before going up first.
Why? It's because of the Grayscale Ethereum Trust.
Similar like they had with Bitcoin, they also hold a large stack of ETH.
The problem? They have a huge 2.5% fee on it.
Significantly higher than other issuers. This is major contributor to significant outflows.
HOWEVER there are some key differences this time that many people overlook and don't know:
1️⃣ Grayscale also launched an Ethereum mini trust
The difficult explanation:
ETHE (Grayscale ethereum) would seed Grayscale Ethereum Mini Trust through a spin-off of a certain amount of ETHE’s Ether to ETH, with shares of ETH to be distributed pro rata to ETHE’s shareholders.
The simple explanation:
The Grayscale Ethereum Mini Trust would be a net positive for existing ETHE shareholders, as they would maintain the same exposure to Ethereum with the added benefit of a lower fee averaged across both products.
Bitcoin didn't have this at the launch which does make quite a difference.
2️⃣ Bitcoin rallied for months and months on an ETF speculation
I personally believe Grayscale wasn't the only factor in the initial (minor) dump we had after the BTC ETF went live.
A lot of people "sold the news" as with any high influential event.
They thought it was already priced in (they were wrong but they thought it was).
Ethereum didn't have that! We saw an approval out of nowhere and quicker than anyone thought.
Basically not creating the huge rally to the upside that needs to cooldown right now and correct before we can continue further.
3️⃣ Let's say theoretically that there will be an initial sell-off.
Like we saw with Bitcoin, any existing supply or outflows into the market has been COMPLETELY absorbed and dominated by higher demand and inflows.
Bitcoin didn't sell-off for long. It's still 50% higher.
Which is remarkable looking at the fact it rallied for months already before that additional 50% increase at the local highs.
It basically barely lasted days or a few weeks tops.
The introduction of the ETH ETF will always be a NET POSITIVE mid-long term.
But you still scared for a potential few % of dip first?
~
My conclusion short and mid term:
Long term it'll be a massive win and net positive.
Short term I'm expecting neutral price action.
Not hugely up, not hugely down either in the first few days.
I expect any outflow to be completely absorbed by inflow.
The criteria are different like we had with Bitcoin.
I'm not expected a large initial sell-off before we resume the uptrend myself.
Basically: neutral sideways first - positive uptrend after.
You want to know the ultimate scenario for the entire market?
When ethereum starts moving into positive uptrend wave and Bitcoin is above $70k again.
That's the next altcoin wave you are looking for.
Also very likely to happen imo.
𝘿𝙤𝙣'𝙩 𝙛𝙤𝙧𝙜𝙚𝙩 𝙩𝙤 𝙛𝙤𝙡𝙡𝙤𝙬 𝙛𝙤𝙧 𝙢𝙤𝙧𝙚! 🤗
