Grayscale's sell-off is expected to be over in the coming months, the next stage is:
Grayscale's sell-off is expected to be over in the coming months, the next stage is:
• January - BTC ETF
• March - ETH Dencun Mainnet
• April - BTC Halving
• May - ETH spot ETF
Ethereum is set to dominate the crypto narrative in mid-2024
1/ SEC - ETH spot ETF
SEC is an institution that must make consistent decisions in compliance with the APA.
Therefore, with the Bitcoin ETF already approved, the chances are high for an Ethereum ETF to pass in the first half of this year.
The earliest decision date among the seven Ethereum spot ETFs is scheduled for May 23rd.
*Given the significance and influence of BlackRock, the final approval could potentially be delayed until August.
**Note - Bitcoin's ETF rally began in earnest 3 months prior to approval.
- BTC CME Futures
- Coinbase IPO
- BTC Futures ETF
- BTC Spot ETF
Some CTs have been using the 'Sell the News' trend observed in past [Crypto+TradFi] events as a basis to argue that the ETH ETF might also show a downturn.
However, this perspective overlooks some crucial aspects:
1. TradFi - a much slower timeline than crypto
2. $GBTC's sell-off - mainly driven by bankrupt firms
It's more likely that the ETH ETF will not follow the repetitive 'Sell the News' pattern seen in the past, IMO.
- Recorded $4.6 billion in volume on DAY 1
- Hit $27.5 billion AUM in just a week
In total, there was an inflow of 20K BTC over 8 days for all Bitcoin ETFs.
This trend indicates TradFi investors' growing interest in Bitcoin, with the true impact of ETF investments expected to unfold in time.
> With the nearing ETH ETF approval, "anticipation" will build, and it will be reflected in the price action.
*This influx of ETF money also hints at the possibility of expanding discussions to the approval of ETFs for other major alts.
(1) Redemption (1.5% fee)
(2) Profit taking (Holder)
(3) $GBTC Discount to NAV (-45%)
(4) FTX (Bankrupt)
Among these, it is speculated that the primary cause of short-term selling pressure originated from the 'Bankruptcy sale.'
In fact, FTX liquidated all its $GBTC holdings, valued at $1 billion.
Had FTX not started this sell-off, the net inflow for ETFs would likely have been over $1.5Bn more than current levels. (Minimum >$5Bn)
This assumption is plays a role in 'ETH ETF' Narrative.
There is no denying it – it is somewhat reasonable to expect that the ETH ETF will exhibit short-term weakness.
1) In fact, Grayscale currently holds approximately $7 billion of $ETHE.
2) And, until recently $ETHE was trading at up to a 50% discount to its NAV.
However, the impact of $ETHE is expected to be relatively minor compared to $GBTC, for the following reasons:
This is because $GBTC sales - have likely reduced the likelihood of $ETHE being sold off, resulting in a positive ripple effect.
(1) Bankrupt companies liquidated their $GBTC holdings, securing cash.
(2) This cash realization consequently reduced the incentive to sell $ETHE.
The critical factor to note is that the volume of distressed assets, particularly $ETHE held by bankrupt firms, remains relatively small.
*Since Celsius Estate owns less than 1% of ETH, the market impact of these sales is expected to be minimal.
[ETF Money Inflow] + [Reduction of Bankruptcy's influence] will lead to **anticipation** of ETH ETF approval.
Keep in mind that “Anticipation” is one of the most important catalyst in crypto.
Expected Scenario:
- "Bitcoin halving in April + $ETH ETF a month ago" will once again spark the $ETH bullish narrative.
- Assuming that $ETH price goes up, we should consider that ETH-led rallies tend to trigger "Alt-szn".
- This cycle is likely to lead to a larger rally than the ~70-day rally we've seen since October.
It is very likely that - coins that are heavily correlated with ETH ETFs will have higher gains.
source - @jtradestar
plan to upload an "ETH ETF-Beta Watchlist" soon.
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