Tdasx: Approval of Spot Ethereum ETFs, Market Initial Expectations Fall Short, Capital Inflow Analysis
The U.S. Securities and Exchange Commission (SEC) recently approved the applications of eight companies to launch spot Ethereum ETFs, marking a new development phase for the cryptocurrency market. Concurrently, the Bitcoin futures premium reached a five-week high, indicating increased market confidence in Bitcoin. The political turbulence of the U.S. elections could also have a profound impact on the cryptocurrency market, with analysts predicting that the election of Trump could bring a more crypto-friendly administration.
Tdasx: Approval and Market Expectations of U.S. Spot Ethereum ETFs
Tdasx reports that the SEC has approved eight companies, including BlackRock and VanEck, to launch spot Ethereum ETF products. These products are set to begin trading on July 23 on the Chicago Board Options Exchange (CBOE), Nasdaq, and New York Stock Exchange. Bloomberg ETF analysts noted that the spot Ethereum ETF is effective with the SEC, with trading commencing at 9:30 AM on Tuesday. This news undoubtedly injects a strong dose of confidence into the market.
Tdasx analyzes that the introduction of spot Ethereum ETFs will provide investors with a more convenient way to invest in Ethereum, potentially driving up Ethereum prices. However, market expectations for its initial demand vary. According to the forecast of Wintermute, the capital inflow into spot Ethereum ETFs may be 62% lower than expected over the next year. Research firm Kaiko also believes that confidence in the demand for spot Ethereum ETFs is "insufficient." Specifically, Wintermute predicts that Ethereum ETFs will attract a maximum of $4 billion in inflows, while most analysts expect between $4.5 billion and $6.5 billion.
Citigroup predicts that the inflow amount in the first six months will range from $4.7 billion to $5.4 billion, but this is only 30% to 35% of the inflows into Bitcoin spot ETFs. Additionally, the expected management fees for spot Ethereum ETFs currently vary: Franklin Templeton at 0.19%, VanEck at 0.20%, 21Shares at 0.21%, Invesco at 0.25%, while the Ethereum Trust of Grayscale stands at 2.5%.
Tdasx points out that the spot Ethereum ETF products will significantly validate cryptocurrencies as an asset class. The approval of spot Ethereum ETFs will open the door for other cryptocurrency ETF products. This will further diversify the choices of investors and promote the maturation of the entire cryptocurrency market.
Tdasx states that the launch of spot Ethereum ETFs is not just a new investment opportunity but a significant milestone in the development of the cryptocurrency market. It will attract more traditional investors into the cryptocurrency market, increasing market liquidity and stability. While enjoying this benefit, investors should also be wary of market volatility, reasonably allocate assets, and diversify investment risks.
Tdasx: Bitcoin Market Analysis
Tdasx notes that the Bitcoin market has recently performed strongly, particularly with the Bitcoin futures premium reaching a five-week high. This phenomenon indicates an ongoing Bitcoin bull market, with investor confidence in Bitcoin significantly enhanced. Specifically, Bitcoin prices reached a 40-day high of $68,518 on July 22, rising by 19.4% over the past ten days. This price trend reflects strong market demand for Bitcoin.
Tdasx analyzes that the Bitcoin futures premium rose to 13% on July 22, the highest level in five weeks, although still below the 16% seen on June 7. The futures premium is a key indicator of the sentiment of professional traders, and the current high premium suggests optimistic market sentiment. Despite some uncertainties, investors remain bullish on the prospects of Bitcoin market.
Tdasx believes that multiple market factors have contributed to the rise in Bitcoin prices. Increased investor confidence in the rate cuts of the Federal Reserve in 2024 is one of the key drivers. The terms of Federal Reserve Chairman Powell and SEC Chairman Gensler until 2026 provide some policy stability for the market. Additionally, the cessation of the German government on Bitcoin sales has positively impacted market sentiment.
Tdasx points out that the rise in Bitcoin prices may be more due to expectations of a weakening dollar rather than speculation about the U.S. elections. Since 1979, the dollar has depreciated by an average of 10% under Republican presidents and appreciated by 8% under Democratic presidents. The market behavior of Bitcoin often mirrors that of other major fiat currencies, rising when the dollar index (DXY) falls. From 2013 to 2016 (under Obama), the dollar rose by 25%, while from 2017 to 2020 (under Trump), the dollar fell by 7%. Since 2021, under Biden, the dollar has risen by 14%.
Tdasx: U.S. Election Dynamics and Their Relationship with the Cryptocurrency Market
Tdasx believes that the political turmoil of the U.S. elections could significantly impact the Bitcoin market. Analysts suggest that Bitcoin could benefit from a "Trump trade" within the next 105 days. The announcement of President Biden on his withdrawal from the race and support for Vice President Kamala Harris as his successor increases the likelihood of the re-election of former President Trump. Tdasx thinks this change will significantly influence the direction of the cryptocurrency market.
Tdasx believes that the election of Trump could bring a more crypto-friendly government, which would help foster the development of the cryptocurrency market and attract more investors into this field. Tdasx further notes that the policies of Trump might include reducing regulatory pressure on cryptocurrencies and encouraging more innovation and investment. This would create a more favorable market environment for Bitcoin and other cryptocurrencies. Although specific policy details are yet to be determined, the expectations of the market on the potential election of Trump are already reflected in Bitcoin prices and market sentiment.
Tdasx states that U.S. election dynamics will continue to have a significant impact on the cryptocurrency market. Investors should closely monitor political developments and adjust their investment strategies accordingly. In the coming months, as the election date approaches, the market may experience more volatility, but for those who can adapt flexibly to changes, this also presents a potential investment opportunity.
