After months of speculations, and weeks of rumors Eth spot ETFs have finally been launched today. This marks another great achievement and a historic milestone in advancement of decentralized systems and huge win for crypto. Well, I am not quite sure if this is a good or bad thing for Ethereum or crypto in general. I am leaning more towards good, but I don't know enough to make this conclusion yet. In any case, it is an important event both for Eth and crypto for multiple reasons. This takes us one step closer for crypto becoming a norm, hopefully beginning of the end of SECs hostility towards crypto world.
For years now SEC has been taking hostile actions against crypto. SEC in Gensler leadership have declared all crypto assets securities, except for bitcoin, all while failing to create clear guidelines, acting in transparent manner, and continuously making it difficult to engage in crypto projects in the US. Even when questioned in Congress, Gensler wasn't able to clearly state if Eth was a commodity or a security. It became evident at some point that Gensler did see Ethereum as a security and tried to go after it as well. After facing multiple defeats in courts, and court of public opinion, it seems Gensler has given up.
SEC resisted for a long time to approve any bitcoin spot ETF as well, until BlackRock entered the space and announced their interest in bitcoin. Bitcoin ETFs launched about six months ago and have become the most successful launch of any ETF. Since that launch, speculations spread about Eth ETFs and other crypto assets. Why not? I personally didn't think it would happen this year. As usual I was wrong, and Eth ETFs are here now. I think one of the reasons they had to approve Eth ETFs was the same reason they had to approve bitcoin spot ETFs. Because they were OK with futures ETFs for both.
Now it seems unlikely SEC will be bothering Ethereum. Win for Eth, win for crypto. Moreover, Eth coming to the Wall Street opens up more opportunities not only for the investors by the crypto world. Those funds or institutions that couldn't directly invest in Eth, now can participate in this market and also get to know the technology. There is a huge educational benefit. BlackRock already released educational materials that try to explain what Ethereum is, what the differences are between bitcoin and Ethereum. Fund managers and investors will be exposed more to the technology in crypto as they start participating this new investment instrument.
Obviously great advantage for Eth and crypto is the news coverage. The more positive news regarding crypto as a financial asset, investment opportunity, and innovative technology, the better. It is not even one time news exposure. This will create a continuous coverage. Since both bitcoin ETFs and Eth ETFs are new, there will be more eyes watching how successful they will become. Not monitoring this progress will be a mistake for anybody involved in markets. So far bitcoin ETFs have been successful beyond initial expectations, and very impressive. Word in the street is that bitcoin ETFs have been the most successful in the history of ETFs. Correct me if I am wrong. I am not an ETF historian. Eth ETFs didn't fail at launch either. It's been reported that the trade volume on a launch day exceeded $1 dollars. By comparison, bitcoin ETFs had trade volume of $4.6 billion on a launch day. Not too bad.
Even with bitcoin ETFs success, we are yet to see massive investments by institutions. Last I heard about 70%-80% of investors in bitcoin spot ETFs were retail. Event hough bitcoin spot ETFs create an avenue for institutions to invest in, while they couldn't legally directly invest in bitcoin, many of these institutions still need to go through long approval processes within their funds. It is expected there will be more and more funds allocating percentages of their portfolios to bitcoin. If not as core investments, at least as a hedge. Perhaps, similar scenario will play out with Eth ETFs. However, I believe bitcoin spot ETFs would be more attractive for long term investors. But at the same time Wall Street like diversification, and speculation. There will always bee Wall Street gamblers embracing a new thing to bet on. At least, we know they will be betting on something with strong fundamentals compared to many scam stocks in the market.
Isn't it crazy how bitcoin and ethereum made their way to the Wall Street. Few years ago it would be unthinkable. It looked like crypto had its own path. There was no need for ETFs, there was no need for Wall Street money. It turns out Wall Street needs crypto. What they will learn from this journey, how they act on these these changes in investment will be interesting to see. It is one thing to just trade and invest. It is completely another thing to innovate and reshape world financial system, create decentralized systems that come with transparency and true ownership. We will see how many will realize this.
The question now is, what is next? Which crypto asset will get its own ETF? It is clear now that more crypto asset ETFs will be launched in the future. One of the commonly mentioned one is Sol ETF. The roadblocks have been cleared, pathway have been paved. It will be easier for next assets to join the ETF ranks. It will also depend on how bitcoin and eth ETFs will continue to perform. There are more interesting things to come. This is only a tiny part of crypto, if it is at all. With or without ETFs bitcoin was going to succeed. With or without ETF Eth would go on. So will other decentralized blockchains.
Crypto ETFs will play a role in bitcoin, eth, and others becoming widespread and utilized on daily basis, but what will continue making these innovations successful is the continued development, vibrant communities, and commitment to decentralization and making things better for ordinary people.
Posted Using InLeo Alpha
