Today is the launch day for the ETH spot ETFs for the US market. Below are the filed offerings.
What we've learned from the BTC spot ETF launch is that, in the medium term, this sort of activity is good. In the short term, it might cause a dip. The reason for the dip is that Grayscale's products are trusts that are converting to ETFs. This means that the ETH deposited in the trust could not escape until now. And it's expensive to keep your money in those Grayscale products (2.5% v 0.15%).
Now, when people sell, they decide to take some profit and roll the rest over -- say keep 80% of their position. That means that ETHE's $9b could exert 20% sell pressure = $1.8b over (say) three months. Most back-of-the-envelope calculations suggest $1b in buying pressure monthly (see Galaxy Digital's long report on this). The sell pressure should be absorbed, in short, but there might be some initial "freak out" reactions.
Below is an image of what happened with BTC's ETFs.
In our community, some have already asked whether they should sell their ETHE positions and roll them over to something else. I do think that makes sense because there isn't a good reason to pay extra fees--especially if you held ETHE for more than 1 year.
The best offerings (by way of price) are probably CETH and are up on that list. And if we have a dip ... then dip buying makes sense for the intrepid.
Recall that The Real-Time Sahm Rule Recession indicator still hasn't been triggered, and Claudia Sahm, the economist who devised it, has warned that the post-COVID period would likely produce a false signal. In short, it's overly sensitive in these conditions and we're still fine.
My team has been tracking the ETH "beta" plays in light of these events and it appears that more than meme coins should be on your watch list.
- ZK - The zk narrative is coming back and this coin was hammered in a bad launch period.
- ZRO - This one covers much of the layer zero interchain work for the ETH ecosystem and was also launched into a terrible period.
- LDO and RPL - These are likely to gain attention since the spot ETFs cannot engage in staking.
- ENS - It's worthwhile tech and it has impressive momentum.
For meme coins on ETH, here's what on-chain volume transaction data shows.
If you additionally sort by 2% depth, you'll find that MOG and PEPE are the only 2 that show up in the top 10 for both screens. I have been impressed by NPC's recent run, though it doesn't have equally deep liquidity.
To wrap this up:
- We'll probably see a dip for a few days because of ETHE.
- Dip buying might make sense.
- There are 5 obvious ETH coins that are positioned for a possible bounce.
- Two meme coins (on ETH) rise to the top at the moment.
Happy Trading!
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