The Wolf Den #1014 - The ETH ETF Has Arrived
Huge day for the industry!
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In This Issue:
The ETH ETF Has Arrived!
I Am Interviewing RFK Today - LIVE!
Bitcoin Thoughts And Analysis
Legacy Markets
Every Candidate Wants Our Votes
CITI Upgrades COIN To A Buy
Mt. Gox Is Releasing Its Bitcoin
Bitwise Continues To Set The ETF Standard
Ethereum ETFs Launch Today: Will ETH Skyrocket?
The second most anticipated day in ETF history has arrived and there’s lots to cover. We finally have marketing from all of the major issuers, an early look at inflows, and stats to compare to Bitcoin. All that is here and more, let’s get to it.
First up, as promised, I want to cover the marketing efforts from some of the major issuers that have finally gone live at the same time the ETH ETF started trading. I'll start with BlackRock, as their name is the biggest and will easily attract the most $$$.
Jay Jacobs, BlackRock’s Head of Thematic and Alternative ETFs, introduces ETHA in the video below. I've included the key excerpts from the transcript.
“Ethereum is the second largest cryptocurrency by market cap after Bitcoin and has key characteristics that make it distinct. While many see bitcoin's key appeal in its scarcity, many find Ethereum's appeal in its utility.
Ethereum is a highly programmable blockchain that provides infrastructure for a diverse range of assets and use cases. You can think of Ethereum as a global platform for applications.
This platform enables applications, referred to as smart contracts, to run without a centralized intermediary. Transactions on Ethereum require a transaction fee to be paid in the network's native token, ether.
Investor interest in ether has been expanding as more people adopt digital assets. And that's why we're introducing ETHA, the iShares Ethereum Trust ETF, which provides investors convenient exposure to ether.”
iShares Ethereum Trust ETF—Product Brief
Now for the meat of the marketing, the FAQ section. This seems to be where BlackRock clears up the case for Ethereum, likely what the advisors will be referring to the most when selling the product.
Question 1. What is Ethereum? What is Ether?
Question 2. Ethereum & Bitcoin: What’s the difference?
Question 3. What is the investment case for Ethereum?
In summary, BlackRock is leveraging the following narratives to describe and market Ethereum:
A highly programmable blockchain
A platform for applications
Tokenization, DeFi, and stablecoins
Simple and effective; similar to what you will see below with Bitwise and VanEck.
Bitwise
“Ethereum is one of the most-used networks in crypto, averaging more than 550,000 daily active users. These users generate billions of dollars in fees, which are paid to the Ethereum network and benefit Ethereum investors in a manner similar to dividends and stock buybacks.”
VanEck
“Let there be an open-source network where money flows more transparently. Let there be transactions without resource-intensive mining activities. Let there be technology that unchains, where your code is the key. Let Ether be. Enter the Ether with ETHV.”
Now, for some brief coverage of the day-one performance of the ETH ETF. Keep in mind this isn't a complete picture, as not all data is available at market close.
For context, Bitcoin dropped about 20% after its launch in early January, primarily due to the fear of outflows and outflows themselves. So far, ETH has been about flat and has stayed on track with the market or slightly ahead, which is pretty impressive. On day one, Bitcoin saw $4.6 billion in trading volume, with $3.94 billion being outflows from GBTC. Ethereum, on day one, recorded $1.08 billion in trading volume (23% of what Bitcoin did on launch) with $625 million being outflows from ETHE.
As for inflows, the magic number we're all eagerly anticipating, early estimates are ranging between $125 million and $325 million. I’m awaiting confirmation, which should come sometime this morning.
Regardless of where the inflows fall within the estimated range, these numbers are remarkable, especially considering some of the FUD suggesting Ethereum would achieve only 5% of what Bitcoin did. Additionally, the Ethereum ETF launched on the same day Mt. Gox sent billions in Bitcoin to exchanges for creditors to dump on the market. We are also in the slowest part of the 4-year cycle.
As expected, the Ethereum ETF launch was a success. Meeting the high expectations set by Bitcoin's performance was no easy feat, especially considering Bitcoin saw the most successful ETF launch of all time.
Ethereum may be 'underperforming' this cycle, but it is currently one of only two cryptocurrencies with direct access to Wall Street, a nod of approval from the SEC, and a vast array of ongoing innovations. An ETH wave is coming—good things take time.
The bears convincing you otherwise are arguing with their last breath.
I Am Interviewing RFK Today - LIVE!
I could not be more excited! This came together over the past few days, after weeks and months of discussion. We will be broadcasting live on YouTube and X at 6:15 PM EST today - both his accounts and mine. The topic will largely be the increase in political posturing around crypto, what is real and what is not, and how RFK would handle the industry in his Presidency. I can tell you that this is likely to be an explosive interview where Kennedy pulls few punches. Don’t miss it!
Bitcoin Thoughts And Analysis
Price dipped yesterday when Mt. Gox distributed Bitcoin to creditors.
No big deal.
As you can see, we are still chopping sideways in the middle of the range.
Yawn.
Legacy Markets
Stocks slumped as disappointing earnings from Tesla, LVMH, and Deutsche Bank fueled concerns about the global business outlook. Tesla shares fell 7% in premarket trading in New York after reporting a fourth consecutive quarter of lackluster earnings. LVMH dropped 6.5% due to a significant decline in sales in China, highlighting the impact of economic slowdowns on European companies. Deutsche Bank reported its first quarterly loss in four years and scrapped its buyback plans, resulting in a 7% drop in shares. The euro slipped, and bonds gained as European data revealed minimal private-sector growth and a contraction in Germany's statistics. Nasdaq 100 index futures also sank by 1%.
Analysts are scrutinizing this week's earnings to determine if the tech-driven rally from the first half of the year can persist. The market faces summer volatility heightened by mixed earnings, softening activity data, and political uncertainty as the US presidential race intensifies. Investors are adopting more defensive portfolio strategies. Approximately 20% of S&P 500 companies have reported results, with less than half surpassing sales expectations. There are lofty expectations for significant profit increases among leading tech companies, known as the "Magnificent Seven."
LVMH's disappointing results were attributed to currency movements and weak demand in China, while Deutsche Bank's performance was affected by slowed trading and legal provisions linked to Postbank. In the oil market, prices rose following a report of decreased US crude inventories. Additionally, the Japanese yen strengthened past 155 per dollar as traders anticipated potential interest rate hikes by the central bank.
Key events this week:
Canada rate decision, Wednesday
US new home sales, S&P Global PMI, Wednesday
IBM, Deutsche Bank earnings, Wednesday
Germany IFO business climate, Thursday
US GDP, initial jobless claims, durable goods, Thursday
US personal income, PCE, consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.7% as of 10:15 a.m. London time
S&P 500 futures fell 0.7%
Nasdaq 100 futures fell 0.9%
Futures on the Dow Jones Industrial Average fell 0.5%
The MSCI Asia Pacific Index fell 0.4%
The MSCI Emerging Markets Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.0835
The Japanese yen rose 0.5% to 154.83 per dollar
The offshore yuan was little changed at 7.2900 per dollar
The British pound fell 0.1% to $1.2895
Cryptocurrencies
Bitcoin rose 0.7% to $66,339.23
Ether fell 0.8% to $3,456.13
Bonds
The yield on 10-year Treasuries declined two basis points to 4.23%
Germany’s 10-year yield declined one basis point to 2.43%
Britain’s 10-year yield was little changed at 4.13%
Commodities
Brent crude rose 0.8% to $81.64 a barrel
Spot gold rose 0.1% to $2,412.10 an ounce
Every Candidate Wants Our Votes
We now have three presidential candidates aiming to secure the crypto vote: Trump, RFK Jr., and Kamala Harris—unbelievable. Fox News is reporting that Kamala Harris will be in attendance, but I wouldn’t consider it confirmed until we hear from David Bailey, Kamala herself, or an official spokesperson from her team. Her speech will be a hard sell, as the crypto crowd has warmly accepted Trump, but I will gladly listen to any politician vying for our votes. If anything, this might prompt Trump to double down on his promises. Competition is always good. Let the games begin.
CITI Upgrades COIN To A Buy
You know Wall Street is sleeping on COIN when it’s news that Citi is upgrading COIN to a ‘buy’ from ‘neutral.’ The previous price target Citi had on COIN was $260, which the stock surpassed a couple of days ago. I compiled a few screenshots of ratings from some other notable research firms—Wall Street still does not like COIN.
Mt. Gox Is Releasing Its Bitcoin
Leave it to Mt. Gox to rain on our parade. Maybe it’s a brilliant move by Mt. Gox to distribute Bitcoin during one of the most bullish weeks of the year, or it might just be a coincidence. Who knows? Anyways, there's a lot of fund movement happening as Mt. Gox is using five exchanges to distribute the Bitcoin. A significant $3.2 billion worth of Bitcoin was sent Tuesday morning, which is precisely why the market is dipping. A small correction before the conference isn’t the worst outcome; it might allow for some cooling off before a big jump. Plus, Mt. Gox has been a lingering issue we needed to address. With 48,000 BTC moved, it's believed there are 90,000 left.
Bitwise Continues To Set The ETF Standard
Bitwise has not only published the associated addresses of their fund for public transparency but will also donate 10% of ETHW profits to Ethereum open-source development. Bitwise is winning.
“This is the sort of transparency only crypto makes possible. It allows anyone to verify ETHW’s holdings and flows directly on the blockchain, and it lets people easily build public dashboards or write smart contracts that utilize the available ENS records.
We’re proud to bring onchain transparency to ETHW in an Ethereum-native way.”
Ethereum ETFs Launch Today: Will ETH Skyrocket?
It's a historical day for crypto: Ethereum ETFs are launching today! What does it mean for Ethereum? Will it skyrocket and repeat the success of Bitcoin ETFs? Mark Yusko joins me to discuss this and more!
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
Interesting to hear RFK speak about Bitcoin. His understanding of BTC and use cases of Blockchain technology, together with need to genuinely embrace it reflects a substantial commitment rather than a political, insincere endorsement. Thanks