ETH ETF Potential Isn't Priced In

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ETF euphoria. Crypto market participants have become infatuated with spot Bitcoin ETFs after an acceleration in inflows last month helped place BTC within 8% of all-time highs.

The industry is flush with opinions these days on whether spot Ether ETFs will receive SEC approval, but the decision already appears to be settled! Is Wall Street about to wake up to another crypto asset?

The Alpha 🧐

Mike Novogratz, CEO of crypto investment firm Galaxy Digital, made his opinions on the matter public this week, stating that he sees spot ETH ETFs receiving approval sometime this year in a Bloomberg interview.

There is a litany of reasons that Novogratz may be eyeing this year for approval, but chief among them is the SEC’s May 23 deadline to approve or deny VanEck’s spot ETH ETF application, the earliest final approval date among active proposals.

While the SEC has listed numerous crypto assets, including the tokens of alternative proof-of-stake blockchains like Solana, as potential securities in its lawsuits against crypto exchanges, not a single enforcement action has contemplated Ether as a potential security.

Further, the SEC appears to have already provided clarity on its decision to consider ETH as a non-security by voting to approve ETH ETFs that hold commodity futures last October!

Spot crypto ETFs provide a direct connection between TradFi capital stores and crypto markets; the extremely high likelihood that ETH ETFs receive approval from the SEC has some eyeing long ETH as one of the most obvious trades in crypto, especially when considering when you can have both ETH exposure and farm upcoming restaking airdrops…

As Bitcoin’s halving approaches this April, it's equally important to pay attention to Ethereum’s ultra sound money properties and the accelerating pace of Ether deflation.

Should we merely be at the beginning stages of a bull market, it is probable that a future influx of users to Ethereum (and its L2s) will increase the rate of Ether burn, allowing the ecosystem’s monetary policy to shine through to external capital who can ape via spot ETF!

📊 Chart of the Week

Crypto data provider Velo was forced to add a new color to their funding rate heat map in response to exceedingly extending rates this week.

🗣️ Post of the Week

Top signals abound? Bitcoin Barron Nic Carter contemplates purchasing the full set of Louis Vuitton steamer trunks (and overnight bags) from The Darjeeling Limited…

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