It’s not a good vibe
Ethereum has a number of detractors right now. Vitalik Buterin humming isn’t necessarily the bullish message everyone was hoping for.
Matt Hougan of Bitwise pointed this out yesterday in an email. The ETH/BTC rate has fallen to its lowest levels in the last three years. ETH’s upward trend has been a struggle in recent quarters. This is unlike bitcoin or solana.
“The vibes in the community are tough,” Hougan wrote.
The expectation that ETH would follow the footsteps of bitcoin is a valid one. Bitcoin was approved as an ETF earlier this year, then soared to new heights a few short months later. ETH followed the trend like a faithful dog.
And yet… it failed to see a huge boost when its own ETFs were approved earlier this year.
“A key factor is the timing of Ethereum ETFs, which launched during the summer — a typically slower period for both the crypto and ETF markets,” Federico Brokate, of 21Shares, told me.
“This is also partly due to Ethereum having a less straightforward narrative compared to Bitcoin, which is widely regarded as ‘digital gold.'”
Hougan stated in his memo that there could be other reasons, including the risk of an election, rivals, and tokenomics.
“While Bitcoin has largely passed regulatory scrutiny — even SEC Chair Gary Gensler admits it’s not a security — Ethereum has not. The SEC appears to think that staked ETH is a security, and the agency has significant worries about the broader DeFi ecosystem that drives much of Ethereum’s value. If Harris wins and continues the Biden administration’s skeptical posture toward crypto, Ethereum could face challenges,” Hougan is added.
Hougan has the right to be correct from a legal perspective. It is worth noting that ETH can be viewed as having a number of victories.
The SEC settlement with eToro seems to dismiss any possible action taken against ETH, by allowing its US-based trading platforms to continue to offer ether to their customers.
It’s worth noting that eToro has cut a number of their offerings.
Hougan or Brokate do not seem to be too concerned by the possible death of Ethereum. Both are cautiously hopeful that Ethereum will bounce back. “price of ether will ultimately reflect the growing adoption of its various use cases,” Brokate was quoted as saying:
“There are several positive catalysts for Ethereum. Investor education will be key to driving further adoption. As Ethereum’s narrative around real-world assets, tokenization and decentralized finance becomes better understood by both retail and institutional investors, demand is expected to grow. Ethereum’s role as a technological innovator is also gaining traction, particularly among those with a deeper understanding of blockchain technology,” He continued.
Hougan emphasized Polymarket’s dependency on ETH and that, according to rwa.xyz data, over half of stablecoins were issued using Ethereum.
Polygon runs Polymarket, as Hougan pointed out, but it is not the only platform that Polymarket uses. “ultimately settles on Ethereum.”
Ethereum to Hougan means the “Microsoft of blockchains,” Microsoft is one the most powerful tech giants but isn’t viewed as very sexy. Microsoft has been left out of all the excitement surrounding the FAANG stocks. (Facebook Apple Amazon Netflix Google). It doesn’t necessarily mean that Microsoft hasn’t been competitive.
“Ethereum remains a foundational technology platform with immense potential. Although it may lag behind Bitcoin in terms of brand recognition, its role in decentralized finance, tokenization and as a programmable blockchain makes it a crucial part of the future digital economy,” Brokate explained.
“Ethereum represents a bet on blockchain innovation, which will only grow in importance as tokenized assets and decentralized financial applications continue to expand. While short-term bearishness may persist, the long-term outlook for Ethereum remains highly positive.”
Ethereum might need some more time, just like Microsoft. Microsoft’s inclusion in Magnificent Seven was made possible by the fall of FAANG.
Ethereum is a crypto essential, even if its price does not reflect this. Let it simmer.
Data Center
- Ether has outperformed Microsoft stock in the past year — From 42% to 30% — although it’s lagging behind slightly over the year-to-date.
- ETH has been flat for the last day While bitcoin has a 1.2% lead. (BTC: $59,800; ETH: $2,300.)
- JustLend added Tron to its lending protocol You can find out more about this by clicking here. TVL Last weekThe growth rate of 5.85% to $5.85 billion was achieved by apps worth $1 billion and above.
- Trading bots DEX We are currently executing about 250.000 trades a day, down from more than a million during March.
- Solana flips Ethereum for weekly derivatives VolumeFrom $2.666 to $2.624 Billion
Flip that flip
Something about crypto breeds bombastic calls — but ether flipping bitcoin has long been one of the most lofty.
This ratio focuses on the relative costs. “The flippening” is instead about market caps — whether one asset is valued higher than the other in broad strokes.
Market cap growth can be faster than price appreciation, or even in the opposite direction.
Take solana: It’s still 50% below its all-time high from November 2021, but its market cap is less than 20% below where it was at its peak — and even set a new capitalization record earlier this year.
The culprit is inflation. The circulating stock of SOL has increased by 60% over the last three years. This is the equivalent to 178,000,000 SOL (currently worth $22.6 billion) or 37%.
Before the Cambrian boom of layer-1 rivals, ether was closer to a bitcoin flip in the run-up to 2017’s bull market.
In June 2017, when BTC was trading for less than $2,500, and ETH at under $350, the Ethereum flippening had reached 83%. The flippening is now less than 25%.
Crypto has many other competitors, explicit and implied.
Shiba coin briefly overtook dogecoin by late 2021. Its value has now dropped to less than half.
Sui and aptos both debuted around the same time (between late 2022 and mid-2023) with similar market positionings — resulting in similar valuations. SUI successfully flipped its APT shares for the very first time this past week.
BNB, TON and Ethereum may have more in common than Solana, including their development styles, vibes and adoption by users.
TON currently has a 20% lead over BNB. This is largely due to BNB’s stagnant growth.
Solana’s flipping ether is the best way to go for those who want to think about future trends.
SOL actually recorded its highest ever progress at the end of last month: $68.46 billion to $295.64 billion — 23% flipped.
To complete a flip from this point, SOL would need to rise by more than 330% and ETH trading flat.
Watch for the gap between the current cycle and the following to narrow.
The Works
- Revolut CoinDesk reports that CoinDesk could consider creating a stablecoin of its own.
- Jamie Dimon stated that his company is a public corporation. JPMorgan Chase, It is one of largest blockchain users.
- Prager Metis, Former accounting firm of FTX SEC settles with SEC $1.95 million for audit negligence
- SkyBridge’s Anthony Scaramucci In an interview with Bloomberg, expressed his optimism about pro-cryptoregulation.
- Republicans pose questions to SEC chairman Gary Gensler Over airdrop Regulations
The Riff
There’s a statement in the Bitcoin Maxi Handbook that says: “bitcoin” There’s a lot to consider “crypto.”
It goes that Bitcoin is the immaculately conceived cryptocurrency — pure, unable to be gentrified, cypherpunk to the core.
Comparatively, crypto is the result of a cryptocurrency. “industry” Salaries of executives. Salaries. Press departments. HR. Rock and Roll?
In that situation, one would have thought that “crypto” Bitcoin is more traditional than other forms of finance.
From a pure markets perspective, bitcoin is becoming a lot more like TradFi in terms of how and when it’s traded — Kaiko found that weekend BTC trading volume had hit an all-time low of 16% this year, down from 28% in 2019, with the very Wall Street bitcoin ETFs accelerating that trend.
“Crypto,” In the meantime, the company is working to keep decentralization from becoming a reality. Ripple is not going to sleep in the regulated darkness.
It is possible that the worlds will bump into each other rather than merge.
There will be compromises made on both sides. But I would not be surprised to see crypto markets make more than the traditional ones.
That’s fine.
Consider this: traditional markets are much older. The crypto world fixes the outdated parts of the bigger puzzle. However, the financial foundations are very strong.
The correlation between Bitcoin and the rest of the market is already evident, along with the influence that events such as potential rate reductions have on cryptocurrency.
Has there been a lot of conversation lately about the Fed’s relationship with crypto not to mention the Fed? It’s been a while.
And, despite the SEC’s attempt to weaponize TradFi cornerstones — like Howey — to put down the industry, we’ve seen courts use the same test to push back against the SEC’s claims.
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