Written by: dt
Editor: Lisa
The biggest news in the cryptocurrency circle this week is definitely the launch of the Ethereum spot ETF and the speech by former US Republican presidential candidate Trump at this year's Bitcoin conference. The price of the currency has also experienced dramatic fluctuations as the good news has officially landed.
This week’s CryptoSnap Dr. DODO will talk about the performance of the Ethereum ETF in its first week and the key points that former US President Trump made in his speech!
Ethereum Spot ETF
At 9:00 p.m. Beijing time on July 23, a total of 9 ETH ETF products were listed for trading at the same time, including Galaxy Ethereum ETF (QETH), 21Shares Core Ethereum ETF (CETH), Fidelity Ethereum Fund (FETH), Franklin Ethereum ETF (EZET) and VanEck Ethereum ETF (ETHV) listed on the Chicago Board of Trade CBOE, while BlackRock's iShares Ethereum Trust (ETHA) was listed on the Nasdaq Exchange, and the remaining Bitwise Ethereum ETF (ETHW), Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH) were listed on the New York Stock Exchange.
In terms of management fees, except for Grayscale ETHE, which was converted from a trust to an ETF and still maintains a 2.5% management fee, the other ETFs are all between 0.15% and 0.25%. In addition, they also enjoy a 0% management fee for half a year to a year (see the figure below for details). Therefore, the market also estimates that a large amount of Grayscale ETHE will flow out due to high management fees in the early stage of online trading.
Source: https://www.coinglass.com/zh-TW/eth-etf
Ethereum ETF first week performance
As the market estimates above, Grayscale ETHE is the main seller in the market, with an average daily outflow of about 100,000 ETH, and Grayscale ETHE's total holdings are about 2.3 million. The market estimates that there are still about 1 million holdings that will flow out, and the buyers in the market are mainly BlackRock's ETHA, Fidelity's FETH and Bitwise's ETHW.
Overall, the performance in the first week was not too bad. Data from SoSoValue showed that the nine newly launched Ethereum ETFs had a total net inflow of US$106.7 million on the first trading day on July 23, while the total net inflow of Bitcoin ETFs when they were first listed was US$628 million. Ethereum ETFs only accounted for about 17% of Bitcoin ETFs, a slight decrease from the previous market estimate of 20%.
In terms of trading volume, the ETH ETF's first-day trading volume was approximately US$1.1 billion, while the BTC ETF's first-day trading volume was US$4.66 billion. In the first week, the total trading volume of the Ethereum ETF was approximately US$4.05 billion, while the total trading volume of the Bitcoin ETF in the first week was US$7.85 billion.
In terms of outflow speed, the outflow of Grayscale ETHE was significantly faster than the outflow of Grayscale GBTC when the Bitcoin ETF was launched. Bloomberg also gave an explanation for this. At that time, GBTC still had a lot of discounts relative to BTC, and ETHE was close to the price of ETH, so there was no appeal at all to continue holding ETHE.
Ethereum ETF market outlook
Given ETH’s rather weak performance in this cycle, the approval of the spot ETF is definitely a great piece of good news, and it will also allow many outside investors to enter the market. However, compared with the reputation of Bitcoin as digital gold, the concept of Ethereum is still quite vague to the outside world.
The author believes that the biggest problem of Ethereum before was that it could not attract new blockchain players. No new money was willing to buy Ethereum. The biggest problem was that the Defi application on the Ethereum chain could not launch innovative protocols, or the NFT craze receded. Even Solana took away a considerable share of meme garbage. The Gas Fee on the chain has been below 10 gwei for a long time, which is enough to prove how unpopular Ethereum is in this cycle. The launch of the Ethereum spot ETF is the antidote to this situation at the largest level, solving the dilemma of Ethereum without new buyers. However, compared with the Ethereum spot itself, the Ethereum ETF cannot be pledged to increase interest rates, so the appeal of the ETF is relatively weak for cost-conscious buyers.
Bitcoin Conference
Source:https://b.tc/conference/2024/agenda
The scene shifts to Nashville, where former US President and current Republican presidential candidate Trump gave a speech at the Bitcoin Conference at 4 a.m. Beijing time on July 28. The key points are summarized as follows:
The United States cannot cede its dominance in technologies such as cryptocurrency and Bitcoin to China or other countries
The United States will become the global capital of cryptocurrency and hopes to lead the way
If elected, current SEC Chairman Gary Gensler will be fired
Will prevent the U.S. government from selling seized Bitcoin
If elected, will establish a national strategic Bitcoin reserve
Overall, the speech was roughly in line with the market's previous predictions, and the most anticipated news about Bitcoin reserves was also mentioned. Of course, Trump's election promises and actual actions after taking office were repeatedly missed during his last presidency, but as the candidate with the highest probability of being elected as the US president, it is still quite exciting for him to publicly speak in support of Bitcoin and the cryptocurrency industry.
Author's opinion
The author believes that political-themed meme coins are relatively difficult to play among meme coins. They are interfered by too many external uncontrollable factors, including news, chips and community fundamentals. Among them, news is the most unpredictable. Compared with left-side ambush investment, the author believes that it is more suitable as a target for short-term news right-side band speculation. Another inherent disadvantage of political-themed tokens is that it is difficult to be listed on mainstream exchanges. For compliance and avoidance reasons, first-tier exchanges will hardly consider listing related theme tokens, which also makes the problem of token liquidity difficult to solve. For example, $TRUMP 330M MC, the largest market value in the sector, has a pool liquidity of less than 10M. A small pool with large fluctuations is more susceptible to manipulation by large investors. Retail investors should pay extra attention to the risks involved in the process of participation.
