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- 🥜 Guess what? We're back
🥜 Guess what? We're back
PLUS: Ethereum ETF in 7 Days
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GM to all you crypto nuts. Crypto Nutshell #368 bustin’ a move.. 🪩🥜
We’re the crypto newsletter that’s more epic than leading a revolt in a dystopian society... 🏙️🔥
What we’ve cooked up for you today…
🏦 Ethereum ETF launch next week
🌊 Wave of demand coming for Ethereum
😄 Inflows are back
💰 And more…
MARKET WATCH ⚖️
Prices as at 6:00am ET
Only the top 20 coins measured by market cap feature in this section
ETHEREUM ETF LAUNCH NEXT WEEK 🏦
BREAKING: VanEck filing suggests Ethereum ETFs are only one week away
Here we go!
The Ethereum ETFs may launch as soon as next week.
This comes as VanEck recently filed an 8-A form for their Ethereum ETF. (more required paperwork to begin trading)
ETF analyst Eric Balchunas pointed out that VanEck also filed their 8-A for Bitcoin exactly 7 days before launch.
A good sign for a potential July 2nd Ethereum ETF launch…
We also learned that VanEck plans to waive its fee for the first $1.5 billion in assets or until the end of 2025.
Once one of those conditions is filled, the fund will charge a 0.20% fee.
Here’s what Matthew Sigel, head of digital assets at VanEck had to say:
“We aim to be a leader on crypto ETF fees even if it means we lose money at the outset.”
But that’s not the only sign of an imminent launch.
If you’ve been on Twitter recently, you would have surely seen the series of Ethereum ads that Bitwise has been running.
Check it out below in case you missed it👇
Click to watch
Bitwise has also continuously been bull posting their investment thesis for Ethereum. (we’ll cover that in the next section)
Not long now…
The Ethereum ETFs are just around the corner. 🧨
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WAVE OF DEMAND COMING FOR ETH 🌊
With the ETFs potentially launching next week, $15 billion is on the way for Ethereum.
That’s the latest prediction out from Matt Hougan.
Matt Hougan is the Chief Investment Officer at Bitwise, the 4th largest Bitcoin ETF issuer.
Every week, Matt releases a market commentary memo.
In his latest, he broke down why the Ethereum ETFs will attract billions.
When estimating potential inflows, a good starting point is the relative size of Bitcoin and Ethereum.
Bitcoin: $1,266 billion (74% of the combined market)
Ethereum: $432 billion (26% of the combined market)
“U.S. investors currently have $56 billion invested in spot Bitcoin ETPs. I suspect this will reach $100 billion or more by the end of 2025, as these ETFs mature and are approved on platforms like Morgan Stanley and Merrill Lynch.”
Using this $100 billion figure, ETH ETFs would need to attract $35 billion in assets to reach parity. (Matt expects this to take ~18 months)
BUT, Grayscale’s ETH trust is converting to an ETF, bringing $10 billion in assets with it.
So this brings the required inflow number down to $25 billion.
It’s also worth taking a look at foreign crypto ETP markets.
Europe
Bitcoin ETPs: €4,601m (78%)
Ethereum ETPs: €1,305m (22%)
Canada
Bitcoin ETPs: $4,942m CAD (77%)
Ethereum ETPs: $1,475m CAD (23%)
It’s interesting that the asset split is almost identical between markets.
And roughly in line with the market cap breakdown above.
“As a result, let’s take down our estimate and assume Ethereum ETPs only get 22% of the market, matching Canada. That lowers our estimate of net inflows from $25 billion to $18 billion, excluding the assets from Grayscale’s trust.”
According to Matt, a significant fraction of the US Bitcoin ETF flows are related to the carry trade.
The carry trade involves buying spot Bitcoin ETFs and then selling Bitcoin futures contracts against that position.
It’s a little complex but basically the trade profits from the fact that Bitcoin futures contracts currently trade at a premium to the spot price of Bitcoin.
If you’d like to learn more about the carry trade, click here.
Matt estimates that ~$10 billion of the current ETF assets are linked to the carry trade.
“For that reason we need to remove the $10 billion in carry-trade-related AUM when sizing the Bitcoin market. If we do that, the Bitcoin ETP denominator falls to $90 billion AUM. With this, our estimate for net inflows for Ethereum ETPs goes from $18 billion to $15 billion.”
However, this approach doesn’t touch on 2 key areas that could significantly impact flows:
Some are predicting the Ethereum ETFs to underperform due to no staking
There are multiple tailwinds behind Ethereum right now - stablecoins, regulatory clarity, Layer 2’s etc. A bullish wave could cause the ETFs to outperform
Regardless, Matt believes $15 billion in net inflows over the first 18 months is a good starting point:
“Still, I think $15 billion in the next 18 months is a good starting point. My gut tells me we’ll do better than that; ETH is a compelling asset powering the world’s most versatile blockchain. But even $15 billion in net new demand will have a dramatic impact on the Ethereum market.”
With Ethereum’s supply so tightly wound, $15 billion in new demand would be explosive.. 💣
INFLOWS ARE BACK 😄
What’s this?
Bitcoin ETF inflows are back on the menu?
For the first time since June 12, the Bitcoin ETFs have recorded net inflows of $31 million.
Fidelity FBTC: $48.8 million 🥇
Bitwise BITB: $15.2 million 🥈
VanEck HODL: $3.5 million 🥉
Here’s the full breakdown:
The only two funds to experience outflows for the day were Grayscale and ARK, with -$30.3m and -$6.2m respectively.
Interestingly, BlackRock had a net neutral day of $0 inflows/outflows.
Even with $1.1 billion in trade volume…
Bitcoin ETF trade volume
Which means there wasn’t a big enough mismatch between supply and demand for the fund to acquire more Bitcoin.
(Most ETFs on most days will record zero inflows - this isn’t unique to the Bitcoin ETFs)
And with these inflows, Bitcoin briefly bounced back above $62,000, sitting at ~$61,400 at the time of writing.
We’re back baby. 😎
CRACKING CRYPTO 🥜
SEC chair Gensler criticizes crypto sector for non-compliance and 'high centralization'. SEC chair Gary Gensler described the crypto sector as highly centralized with "significant non-compliance" in a Bloomberg interview on June 25.
Metallica’s X account hacked to promote crypto token. Metallica’s X account appears to have been hacked by attackers who used the opportunity to promote a Solana token dubbed METAL.
Cardano Unfazed By Failed DDoS Attack Targeting Staked ADA. No downtime was observed as a Cardano developer managed to attack the attacker and take back some funds.
Bitcoin Price Rebound Sees Shorts Rekt as Crypto Market Recovers. More than $92 million in liquidations landed in the last day, most of it hitting short positions.
WHAT WE’RE READING 📚
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CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
When did popular altcoin Solana launch? |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: D) March 2020 🥳
Solana launched in March 2020.
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