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VanEck Leads The Charge Towards Ethereum ETF With SEC Filing

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VanEck, a well-known investment firm, has demonstrated a surge in the development of an Ethereum Exchange-Traded Fund (ETF) by filing an S1-A form with the Securities and Exchange Commission (SEC). According to Mr. Seyffart, a renowned analyst in the field of ETFs at Bloomberg who has been evaluating the issues, this step was another move in the course of VanEck’s relentless efforts to deal with the regulatory environment of the product.

The competition for the coveted spot for the Ethereum ETF is hotter up, with VanEck’s application joining the list of the other contenders, all chasing approval from the SEC. This trend reflects the increased interest that spot Bitcoin ETFs generate, pushing established financial institutions to look into Ethereum ETFs with renewed vig.

VanEck’s Ethereum ETF Application amidst SEC’s Scrutiny

A concurrent development includes the Ethereum ETF application from BlackRock, an investment colossus at the global level. Nevertheless, the SEC also adhered to a very careful stance, extending the examination period not only for BlackRock’s iShares Ethereum Trust but also for a prominent player in the industry, i.e., Grayscale Investments, Fidelity, and VanEck. 

The fact that BlackRock’s application decision has been delayed until March 10, 2024, by the regulator highlights the thoroughness of the inspection process as the Ethereum network prepares to switch to the proof of stake model. Also, the fears of market manipulation continue to linger.

Regulatory obstacles notwithstanding, investor sentiment remains very high. Experts view the odds of a spot Ethereum ETF approval by May as 60%. This confidence comes from a deadline that falls within only 240 days. It also comes on May 23, which marks the end of the review process for the proposals submitted by Ark/21Shares and VanEck.

However, there is an element of mystery as well in the SEC’s deliberations with Hester Peirce, the commissioner, who is a known advocate of a more lenient policy for Ethereum ETFs. The SEC’s remarks could be traced back to their experience with the spot Bitcoin ETFs as they seem to learn as they go, indicating a potential shift in stance after an increase in the application submissions.

Ethereum ETF: Standard Chartered Executive Eyes $4,000 Target On SEC Approval

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Standard Chartered executive Geoffrey Kendrick anticipates the approval of a spot Ethereum exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC) on May 23. Drawing parallels with the SEC’s approach to Bitcoin ETFs, Kendrick suggests that if Ethereum (ETH) follows a similar pre-approval trajectory to Bitcoin, it could potentially reach $4,000.

Kendrick points out that the SEC’s non-classification of ETH as security and the prior approval of futures ETFs contribute to the likelihood of spot Ethereum ETF approval. He expects the SEC to adopt a strategy akin to the one used for Bitcoin ETFs, involving initial rejections and eventual approval by the May 23 deadline.

In a report from Standard Chartered Bank, Kendrick notes, “If ETH prices perform similarly to how BTC prices performed in the lead-up to BTC ETF approval, ETH could trade as high as $4,000 by then.” He emphasizes that the SEC’s lack of categorization of ether as a security and its listing as a regulated futures contract on the Chicago Mercantile Exchange strengthen the case for approval.

Kendrick expresses optimism about cryptocurrency trends, reiterating earlier predictions that spot Bitcoin ETFs could attract $50-100 billion in inflows this year, potentially driving the Bitcoin price to $100,000 by year-end and $200,000 by 2025. He underscores that Ether is less prone to post-approval selling compared to Bitcoin, citing the Grayscale Ethereum Trust’s smaller share of the total ETH market cap.

Ethereum’s Future: Dencun or Proto-Danksharding Upgrade

Looking ahead, Kendrick expects simple Ethereum ETFs that replicate ETH price movements to gain approval on May 23. He suggests that ETFs incorporating staking yield rewards may be introduced later, with Europe already hosting such offerings, like AETH [21Shares Ethereum Staking ETP].

Commenting on Ethereum’s Dencun or Proto-Danksharding upgrade, Kendrick believes it will positively impact the Ether price. The upgrade is expected to enhance the value captured within the Ether ecosystem by reducing Layer 2 fees and maintaining higher staking rewards.

Nevertheless, experts in the crypto space hold varying opinions on the imminent approval of a spot in Ethereum ETF, with Kendrick maintaining an optimistic outlook for the cryptocurrency market.

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SEC Postpones Spot Ether ETFs Decision, May Is The Key Month

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The U.S. Securities and Exchange Commission (SEC) has postponed its decision on the spot Ether exchange-traded funds (ETFs) proposed by BlackRock, the world’s largest asset manager. The SEC said it needed more time to review the proposed rule change that would allow the iShares Ethereum Trust to trade on the Nasdaq.

The SEC announced the delay on January 25, one day before the initial deadline. This is the first of several possible delays that the SEC can use within a 240-day period. The final deadline for BlackRock’s spot Ether ETF is August 7, 2024. Bloomberg ETF analyst James Seyffart expects more delays for spot Ether ETFs in the coming months, but he stressed that May is the critical month for the SEC’s decision.

BlackRock filed for the iShares Ethereum Trust on December 11, 2023, becoming the first company to seek approval for a spot Ether ETF in the U.S. BlackRock is not the only company that has applied for a spot Ether ETF. Several other firms, including Grayscale Investments, WisdomTree, VanEck, and Valkyrie, have also submitted their applications to the SEC.

According to Bloomberg ETF analyst Eric Balchunas, the SEC is likely to make a final decision on all pending spot Ether ETFs in May, with a 70% probability of approval. He based his prediction on the fact that May 23 is the earliest final deadline for all the applicants and that the SEC approved the first spot of Bitcoin ETFs on January 10, which was also the earliest final deadline for the 10 applicants.

Spot Ether ETFs Could Boost Ethereum’s Adoption And Price

The approval of spot Ether ETFs would be a major milestone for the cryptocurrency industry and investors, as it would provide a more convenient and regulated way to access the second-largest cryptocurrency by market capitalization. Spot Ether ETFs could also boost the adoption and price of Ethereum, which is undergoing a major upgrade to become more scalable, secure, and sustainable.

However, the SEC’s postponement of BlackRock’s spot Ether ETF proposal indicates that the regulator is taking a careful approach to approving these products. The SEC’s decision will depend on its evaluation of the risks and benefits of spot Ether ETFs, as well as the suitability of the proposed rule changes.

In its notice, the SEC asked for public comments on several issues related to spot Ether ETFs, such as the similarities and differences between Ether and Bitcoin, the proof of stake consensus mechanism of Ethereum, the concentration of control or influence by a few individuals or entities, the susceptibility of Ether to fraud and manipulation, and the correlation between spot and futures markets.

The SEC has been historically reluctant to approve spot crypto ETFs, citing concerns about market manipulation, investor protection, and custody. It only allowed the first spot of Bitcoin ETFs to launch in the U.S. earlier in January after years of rejections and delays.

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SEC In Hot Water: Crypto Proponents Hit Back

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Following the SEC’s approval of the Bitcoin ETF, critics and proponents clashed over the decision. Adam Cochran emphasized that, contrary to Senator Warren’s assertion, the SEC does not set or decide the law; instead, it serves as a rulemaking organization offering guidance and interpretations. The binding interpretation of the law, as Cochran pointed out, rests with the judiciary. In her words, “If the SEC is going to let crypto burrow even deeper into our financial system, then it’s more urgent than ever that crypto follow basic anti-money laundering rules.”

SEC
SEC In Hot Water: Crypto Proponents Hit Back 2

In response, proponents of cryptocurrencies argued that existing robust laws are already in place to prevent money laundering within the crypto space. US agencies such as FinCEN, SEC, and CFTC actively enforce anti-money laundering [AML] compliance, sanctions adherence, and transaction monitoring. Additionally, individual states, including New York with its BitLicense, contribute significantly to AML efforts. They emphasize that the approval of a Bitcoin ETF aligns with existing legal frameworks.

Users also pointed to a significant legal precedent. The DC Circuit Court of Appeals overturned the SEC’s rejection of Grayscale’s attempt to convert its trust into an exchange-traded fund. This decision, made by a panel of three judges, underscored the court’s belief in the legality of approving a Bitcoin ETF. In a notable ruling in August 2023, the court found the agency’s rejection of Grayscale’s proposal to be “arbitrary and capricious,” criticizing the lack of a clear explanation for the denial.

SEC’s Reversals & Rulings

Grayscale had argued that converting to an ETF would benefit investors by allowing easy creation and redemption of shares, a feature not available in the current closed-end structure. The decision was hailed by crypto advocates as a pivotal moment and a challenge to the SEC’s stance under Chair Gary Gensler.

Despite these developments, the regulator has been active in enforcing regulations within the crypto space, with Ripple being a prominent target. The legal proceedings involving Ripple and its XRP cryptocurrency gained significant attention, particularly after a judge ruled that XRP qualified as a security only when sold to institutional investors. Many in the crypto community believe that these legal precedents have paved the way for broader approval of spot Bitcoin in traditional financial markets.

Litecoin Plays Catch-Up Amidst Address Frenzy

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Litecoin, Maker, and LidoDao are all witnessing a significant surge in address activity, a trend that typically aligns with an increase in market capitalization. While Maker [MKR] and LidoDao [LDO] have reported an 8% rise since the beginning of the new year, LTC has yet to observe a similar uptrend. Despite the heightened network activity, market analysts have noted a lack of corresponding movement in LTC’s price, leading to a characterization of its price trend as displaying a bullish divergence.

In contrast, LDO and MKR have both demonstrated an 8% increase in value since the start of the year. However, Litecoin faced considerable adversity during the market crash in early December of the previous year, losing over 14% in a mere 24 hours, as indicated by data from CoinMarketCap. Analysts, including prominent figure Ali Martinez, attributed this abrupt decline to intensified selling pressure. Despite a broader market rebound, LTC has struggled to recover significantly and remains below $65.

Litecoin
Litecoin Plays Catch-Up Amidst Address Frenzy 5

Martinez has also cautioned investors about potential future price dips, stating, “Post-recent dip, the outlook for Litecoin appears challenging. If the selling pressure continues, LTC might experience a push down to $38, potentially confirming a bear flag formation.”

Litecoin Gets Top Billing In BitPay

Despite the subdued price action, Litecoin, often referred to as the “silver” cryptocurrency in contrast to Bitcoin’s “gold,” has solidified its standing in the digital currency landscape due to its swift transactions and low fees. It has emerged as a frontrunner in BitPay’s payment processing service, accounting for an impressive 38.2% of all BitPay transactions, according to data from the Litecoin Foundation.

Litecoin
Litecoin Plays Catch-Up Amidst Address Frenzy 6

Moreover, Litecoin achieved a noteworthy milestone on December 20th, reaching an all-time high of 1.27 million transactions, a figure that has continued to rise, reaching nearly 1.5 million transactions as of January 2, 2024. This surge underscores LTC’s robust transactional capabilities when compared to leading cryptocurrencies such as Bitcoin [BTC] and Ethereum [ETH].

In a separate development, an exchange-traded fund [ETF] for the coin seems to be on the horizon, with Grayscale Investments, the world’s largest digital asset manager, announcing that its single asset products, including Grayscale Litecoin Trust [LTCN], have become SEC reporting companies. This move suggests a growing institutional interest in LTC as a viable investment option.

Crypto Markets Enter Institutional Era: Goldman Sachs Report

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2023 proved to be a breakthrough year for cryptocurrencie­s as it brought notable shifts that made digital assets more established and widely accepted. Goldman Sachs, a leading global investment management firm, said that the crypto market experie­nced expansion of regulate­d exchanges for complex financial products like­ derivatives.

Platforms like Coinbase­ Derivatives, CBOE, Eurex, GFO-X, AsiaNe­xt, and 24 Exchange saw growth in centrally-managed options that provide structure.

The re­port said the market became more like an organization in the marke­t for derivatives. This was most clear in the­ bitcoin (BTC) and ether (ETH) futures and options trading at CME. The­re, futures, and options trading for these­ went up steadily.

By Q4, CME had become the numbe­r one exchange for bitcoin future­s based on how many contracts people were holding. People holding contracts are­ called open intere­st. Open interest means the total number of futures or options de­als that investors are still involved in. It shows how many positions are still active.

Bitcoin And Ether Futures Trading Surges

The re­port said that interest in bitcoin and ethe­r was the same for the first nine­ months of the year. But in October, when prices changed, big investors got inte­rested.

October price action brought along interest from institutional investors, who took the opportunity to position themselves for a potential spot BTC ETF approval and/or hedge exposure via derivatives, the report said.

More people wanted to buy or sell Bitcoin using future contracts in the last three months of the year than ever before. The report shows there was more interest in using futures to make money from Bitcoin price changes or protect against them.

Trading of ethere­um futures stayed behind bitcoin future­s all year. Ethereum future­s volumes were be­tween 20% to 50% of the size­ of bitcoin futures. But this might change in 2024 if ethe­reum is also approved to have inve­stment funds that people can dire­ctly buy and sell.

Crypto ETFs: Global Regulatory Landscape

Net inflows for bitcoin products swe­lled before an e­xpected ETF decision. Exchange­-traded products and futures ETFs, tracking crypto assets or future contracts, saw $1.9 billion enter in the last quarte­r. ETPs follow indexes like ETFs or ETNs. Future­s ETFs use futures instead of direct holdings. ETFs let people inve­st without owning assets.

ETFs dealing with cryptocurre­ncies must follow tight rules from regulators like the SEC in America. These agencies have been slowing or turning down many requests for funds tie­d to digital money due to worries ove­r market trickery, dece­ption, and protecting investors.

in just 2023, regulators globally pe­rmitted or launched seve­ral crypto-related ETFs. Examples include VanEck’s Bitcoin Strategy Fund (BTF), WisdomTree’s Crypto Strate­gy Fund (WTC), Valkyrie’s Bitcoin Strategy Fund (BTF), Grayscale’s Bitcoin Trust (GBTC), and Bitwise­’s Crypto Industry Innovators Index Fund (BITQ).

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Invesco & Galaxy’s Ethereum ETF Approval in Limbo: SEC Extends Review

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In an unexpected turn of events, the joint Ethereum Spot ETF application from Invesco and Galaxy faces a delay as the Securities and Exchange Commission [SEC] has decided to postpone its decision until February 6, 2024. The SEC, in a notice dated December 13, has opted for an extended evaluation period to determine whether to approve or disapprove of a proposed rule change enabling the Cboe BZX Exchange to list and trade shares of the Invesco Galaxy Ethereum ETF.

The original 45-day timeframe, starting from the notice’s publication on December 23, 2023, is now being prolonged, with the new decision date set for February 6, 2024, as outlined in the notice. In September of the current year, Invesco, a major asset management firm, collaborated with Mike Novogratz’s Galaxy Digital to submit the Ethereum spot ETF application to the SEC. The application involved Galaxy Digital Funds serving as an execution agent for the ETF, facilitating the buying and selling of Ethereum. Notably, this Ethereum application followed a joint Bitcoin product application in June.

Ethereum
Invesco & Galaxy's Ethereum ETF Approval in Limbo: SEC Extends Review 8

The ripple effect of this delay is felt across various spot crypto ETF applications, underscoring the SEC’s careful approach. The SEC attributes the delay to a thorough consideration of the risks and implications associated with approving a spot Ether ETF.

Grayscale Ethereum ETF

In a parallel development, the SEC has also extended the timeline for deciding on the Grayscale Ethereum Trust’s spot ETF application by 45 days, with the new decision date set for January 25, 2024. Grayscale Investments, the entity behind the Grayscale Ethereum Trust, applied to the SEC in October 2023, seeking approval to convert its trust into a spot ETF. Such an ETF would track the price of ETH, allowing investors to gain exposure to ETH without direct cryptocurrency acquisition and storage.

It’s worth noting that the SEC has yet to greenlight any spot for Ether or Bitcoin ETFs, consistently delaying decisions on all applications received. The delays stem from the SEC’s concerns about potential market manipulation and investor protection issues associated with spot ETFs, underscoring the regulatory body’s cautious stance in this evolving landscape.

DCG & Genesis Global Settle $620M Dispute

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Digital Currency Group [DCG] and its bankrupt subsidiary Genesis Global have reportedly reached a settlement agreement to address their legal dispute, as indicated by a recent filing. In early September, the crypto brokerage firm initiated a lawsuit against DCG, accusing them of wrongfully holding more than $620 million in loans during Genesis’ bankruptcy proceedings and seeking repayment along with interest and fees. Up to this point, DCG has made payments totaling more than $220 million out of the $620 million owed.

The settlement terms entail DCG making an additional payment of $275 million to the crypto broker in three installments, partly in U.S. dollars and bitcoin, with the final installment due by April. The agreement also includes an upfront payment of $35 million and a $10 million holdback from the recent sale of CoinDesk. According to the filing, DCG is using Grayscale Trust shares as collateral.

Genesis
DCG & Genesis Global Settle $620M Dispute 10

While the settlement won’t fully satisfy the debt, as DCG’s total owed amount stands at $324.5 million, it is designed to prevent protracted and costly legal proceedings between the two entities. The plan could result in a 70%–90% recovery for unsecured creditors. However, the approval of creditors is still required for the deal to proceed.

Genesis Clash With DCG

As mentioned earlier, Genesis Global Capital had filed a lawsuit against its parent firm Digital Currency Group, and Digital Currency Group International [DCGI], seeking repayment of multiple loans. The legal filings made public in early September alleged that DCG borrowed up to $500 million across four loans from Genesis in 2022, and DCGI borrowed 18,697.7 BTC in 2019.

Both the warring parties entered into master loan agreements in November of the previous year, with extended or normal maturity dates in May 2023. DCGI, a subsidiary of DCG, also entered into a master loan agreement with Genesis in 2019. Genesis, having filed for bankruptcy in January, contends that DCG and DCGI are in wrongful possession of property belonging to Genesis Global Capital’s bankruptcy estate, according to the filings made on Wednesday.

Ethereum Soars As Top Wallets Accumulate, Institutions Drive Bullish Momentum

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Blockchain analyst firm Santiment recently reported that the top 200 Ethereum wallets have amassed a staggering 62.76 million ETH, boasting a collective value of approximately $124.1 billion. The accumulation trend reveals a noteworthy surge of 30.3% since November 21st, 2022. Simultaneously, the Ethereum community witnessed a rise in new wallets, with 94.7 thousand added in a single day, marking the highest spike since July.

The surge in Ethereum wallet holdings coincides with a notable breakout in the price of Ethereum (ETH), driven by a growing interest from institutional investors in the second-largest cryptocurrency by market cap. Over the past 30 days, Ether’s value has surged by 20%, breaching the $2,000 mark. This surge indicates a shifting focus toward Ethereum, and the renewed bullish momentum has propelled ETH’s year-to-date gains to an impressive 71.75%.

The surge in institutional interest can be traced back to a pivotal moment on November 1st when the U.S. Securities and Exchange Commission (SEC) acknowledged Grayscale Investment’s application to transform its Ethereum trust into an Exchange-Traded Fund (ETF). The SEC, responding to a court order is obligated to review Grayscale’s pending ETF applications, though a confirmation for a spot crypto ETF has yet to be made. 

The bullish signals intensified as BlackRock, the world’s largest asset manager, filed for a spot Ether ETF, breaching the $2,000 resistance and reaching a 6-month high on the same day. BlackRock officially submitted the S-1 form to the SEC last week.

However, analysts anticipate that the SEC’s potential approval of a spot Bitcoin ETF in early 2024 could pave the way for the approval of a spot Ethereum ETF shortly after that, further fueling the bullish sentiment surrounding Ether.

Current Ethereum Statistics & Predictions

Despite the recent surge, Ethereum is currently trading at $1,991.90, with a 24-hour trading volume of $12 billion, reflecting a 2.18% decrease in the last 24 hours and a 1.82% dip over the past seven days, according to CoinMarketCap.

ETH 1D graph coinmarketcap 6
Source: CoinMarketcap

Looking ahead, the PricePredictions website suggests a bullish long-term trend for Ethereum, predicting a price increase of $6.90 over the next 7 days, reaching $1,957.33 by November 28th, 2023. In the short term, machine learning algorithms indicate a neutral trend, signaling a potential slight increase with the possibility of a minor decrease over the next few hours, urging investors to remain vigilant in this dynamic market.

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Chainlink Poised For A Breakout, Eyes Retest At $14 Before Surging Towards $20

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Renowned analyst Ali suggested in a recent Twitter post that Chainlink (LINK) might be gearing up for a breakout from a bullish flag formation. As traders eagerly await confirmation, speculation about the potential implications for LINK’s price movement is rife.

The technical analysis shared by Ali indicates a pattern resembling a bull flag on the Chainlink charts, a classic signal of potential upward momentum. According to Ali’s tweet, if the breakout materializes, a retest of the $14 level seems likely before Chainlink makes its ascent toward the $20 mark.

The cryptocurrency is presently valued at $14.96, experiencing a 24-hour trading volume of $632 million, marking an almost 11% increase. LINK has risen by 5.37% in the past 24 hours. Its current position on CoinMarketCap is #11, boasting a live market capitalization of $8 billion. The circulating supply of LINK coins is 556,849,970, with a maximum supply capped at 1,000,000,000 LINK coins.

LINK 1D graph coinmarketcap 1
Source: CoinMarketcap

The crypto market is no stranger to the excitement generated by such predictions, and Chainlink enthusiasts are closely monitoring the charts for any signs of the anticipated breakout. A move beyond the $14 resistance zone could serve as a confirmation of the bullish pattern, paving the way for further gains.

LINK experienced a staggering 40% plunge after the FTX collapse. However, its resilience in the face of adversity, bolstered by a judiciously managed exposure to the crypto exchange, coupled with strategic development updates, has paved the way for a remarkable recovery in its price trajectory.

Over 180% Profits for November 2022 Chainlink Buyers

Those who seized the opportunity to acquire LINK in November 2022 at the modest price of $5.68 are now reveling in over 180% profits as of today. The resurgence of Chainlink’s value can be attributed to a confluence of factors that have unfolded in recent months.

LINK 1M graph coinmarketcap
Source: CoinMarketcap

One key driver has been the introduction of a cutting-edge proof-of-reserve product, showcasing Chainlink’s commitment to innovation and staying ahead of the curve in the dynamic crypto landscape. This move has not only instilled confidence among existing investors but has also captured the attention of new market participants.

The growing adoption of Chainlink’s technology has further fueled its ascent as various industries recognize the robustness and versatility of its decentralized Oracle network. This widespread acceptance is translating into increased demand among professional investors, a trend underscored by the remarkable performance of Grayscale’s Chainlink Trust.

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