Ethereum ETF on the Horizon? – Market Info

Over the past two weeks, the total market capitalisation exceeded €2.39 trillion. The increase in market capitalisation over a 14-day period is 12.73%. The price of Bitcoin has risen by 13.38% over the last 14 days to a current value of over €64,400. Bitcoin’s dominance is currently around 54.34%.

Source: Coinmarketcap

Ethereum ETF on the Horizon?

The price of Ethereum, the second largest cryptocurrency, surged early Monday evening, rising more than 18% in 24 hours on speculation that the U.S. Securities and Exchange Commission (SEC) could approve a spot ETF for the Ethereum cryptocurrency as early as Thursday, May 23. The news on this front in recent days is very surprising, given that recent months have been rather sceptical and pessimistic about Ethereum ETFs.

However, two prominent Bloomberg ETF analysts, Eric Balchunas and James Seyffart, reported on Monday evening that the SEC has begun actively communicating with Ethereum ETF applicants, urging them to revise and promptly file revised versions of their filings with the SEC. This led analysts to raise their estimates of the probability of approval from 25% to 75%.

News of the Ethereum ETF’s possible approval comes just days before the SEC’s final decision on VanEck’s filing. However, analysts caution that even if the Form 19b-4s are approved this week, it could still take weeks or months to sign the relevant S-1 registration statements, which would delay the launch of these ETFs.

The possibility of a two-step approval process, with the SEC first approving Forms 19b-4 and then Forms S-1, was first suggested by Nate Geraci, president of The ETF Store.

The news has also had a positive impact on the prices of other cryptocurrencies. Bitcoin (BTC) was up 5.1% Monday to Tuesday, Solana (SOL) up 8.9% and Dogecoin (DOGE) up nearly 10%. The total market capitalization of cryptocurrencies over the past day rose by over 7% and surpassed the $2.6 trillion level for the first time since mid-April. Source

Asset Tokenization Is Gaining Popularity

The latest trend gaining more and more attention in the cryptocurrency market is the tokenization of real-world assets (RWAs). This trend has been aided by the interest of large financial institutions, including BlackRock.

RWA tokenization transforms ownership rights to financial or physical assets into digital tokens, creating an immutable and transferable unit of ownership. These tokens can then be issued, bought, sold and exchanged on various exchanges across different blockchains. Thus, blockchain technology and tokenization make it possible to trade even illiquid assets, such as real estate and assets from traditional markets such as U.S. Treasury bills, directly on DeFi protocols.

The current market value of RWAs is estimated to be only about $7 billion, with analysts estimating that it will grow to as much as $16 trillion by 2030.

The concept of tokenizing real assets is almost as old as cryptocurrencies themselves. One of the first practical uses of tokenization was stablecoins, where one token represents one unit of fiat currency, such as the U.S. dollar or euro. Over time, the scope of tokenization expanded to a wider range of assets, including bonds, stocks, fixed income or real estate. The industry in particular gained massive attention a few months ago after BlackRock, the world’s largest asset manager, launched its asset tokenization platform called BUIDL.

DeFi has historically focused on assets native to cryptocurrencies, but the addition of RWAs represents a significant change for the industry, allowing the DeFi sector access to a wider range of assets.

Graeme Moore, head of tokenisation at the Polymesh Association, told Cointelegraph that RWAs reduce DeFi’s reliance on the volatile cryptocurrency market by exposing it to a diverse range of assets. Asset tokenization on the blockchain works well, he said, and the ability to store RWA assets and use them as needed without having to interact with a centralized intermediary will modernize capital markets around the world, just as the internet has modernized global communications. Source

Will Bitcoin Surpass the Market Capitalization of Silver?

Silver had an impressive comeback in 2024, returning to the 8th position in the list of the most valuable asset classes by market capitalization. The world’s second most valuable metal has appreciated 33.4% since Bitcoin (BTC) reached a record $73,737 on March 14, jumping to the 8th most valuable asset in the world.

As a result of this increase, the market capitalisation of silver is currently at $1.83 trillion, roughly $500 billion more than Bitcoin’s current market capitalisation of $1.34 trillion.

In practice, this means that Bitcoin would have to rise by roughly 40% from its current price level to around $93,000 to surpass silver’s current market capitalisation, assuming all other factors remain unchanged.

Bitcoin is currently the ninth most valuable asset in the world, with gold being the most valuable asset in terms of total market capitalisation at $16.22 trillion. Gold is followed by Microsoft and Apple, which have valuations of $3.18 and $2.94 trillion respectively.

If Bitcoin were to become the most valuable asset in the world, it would have to increase by over 1100% from its current price value. In practice, this means that one Bitcoin would have to trade for over 800 thousand dollars.

What direction Bitcoin will take in the coming months is still questionable. Although it is very unlikely that Bitcoin will manage to surpass the market capitalization of gold in the next 1-2 years, analysts believe that Bitcoin could surpass the market capitalization of silver in that period. For example, analysts from the trading platform Bitfinex predict that Bitcoin could surpass $150,000 per Bitcoin in the next 12 months under the influence of spot ETFs as well as the halving effect. A similar prediction was recently published by banking giant Standard Chartered, which said that Bitcoin could peak in the $150 to $200 thousand range during this cycle. Source

Grayscale CEO Resigns From His Position

The CEO of digital investment company Grayscale, Michael Sonnenshein, stepped down from his role as CEO a few days ago. Sonnenshein’s move comes just a few months after Grayscale managed to convert its Bitcoin Trust into a spot ETF.

Sonnenshein, who became CEO in 2021, will be replaced as of August 15 by Peter Mintzberg, head of asset and wealth management strategy at Goldman Sachs. Mintzberg has more than 20 years of experience in the traditional financial world (TradFi), having previously worked at various asset management firms such as BlackRock, OppenheimerFunds and Invesco. Grayscale will be led on an interim basis by current CFO Edward McGee until Mintzberg takes over.

Grayscale Bitcoin Trust (GBTC) has seen capital outflows from the fund of around $15 billion in the past three months, likely due to management fees at GBTC being significantly higher than other competitors.

“Michael guided the firm through exponential growth & oversaw its pivotal role in bringing spot bitcoin ETFs to market, leading the way for the broader financial industry,” Barry Silbert, CEO of Digital Currency Group, the parent company of Grayscale, wrote on social network X. Source

Hundreds of Companies Have Confirmed Exposure in Spot ETFs

Last Wednesday was the deadline for investment companies managing more than $100 million to disclose the structure of assets held. Data from the released documents showed that the recently launched Bitcoin ETFs are attracting a huge amount of attention and interest from institutional investors.

According to Fintel’s data, filings with the SEC revealed total bitcoin ETF holdings of approximately $10.6 billion. Of the ten total spot bitcoin ETFs, professional investors and asset managers invested most frequently in funds from BlackRock, Fidelity, ARK 21Shares, and the Grayscale Bitcoin Trust.

As it turned out, hedge fund Millennium Management became the largest investor in spot ETFs in the first quarter, with the firm’s investment in spot BTC ETFs totalling $1.97 billion. The company invested $844 million in shares in the Ishares Bitcoin Trust (IBIT), more than $800 million in a fund from Fidelity (FBTC), approximately $202 million in a fund from Grayscale (GBTC), and nearly $45 million in funds from ARK 21 Shares (ARKB) and Bitwise ETF Trust (BITB). However, despite the company’s large investment in the BTC ETF, this investment currently represents only roughly 3% of its assets, which total $64 billion.

Other notable holders of bitcoin ETFs in the first quarter included Susquehanna International Group ($1.1 billion), Bracebridge Capital ($404 million), Boothbay Fund Management ($303 million) and banking giant Morgan Stanley ($269.9 million).

According to Bitwise CIO Matt Hougan, the investment trend into Bitcoin ETFs is gaining momentum. While professional investors now own an estimated 20% of total Bitcoin ETF assets, retail investors still dominate. Hougan noted that institutional allocations for the first quarter are just the tip of the iceberg in his view, as institutional exposure to the sector will only deepen in the coming quarters. Source

Chainlink Part of a Major Pilot Project

The Depository Trust and Clearing Corporation (DTCC), the world’s largest securities settlement system, has completed a pilot project called Smart NAV in collaboration with blockchain oracle Chainlink (LINK). Major financial institutions from the US also participated in the pilot.

According to a report published by DTCC, the pilot was initiated to establish a standardized process for bringing and disseminating net asset value (NAV) data of funds across multiple blockchains. With the standardization, the tokenization of funds becomes easier and more efficient over time.

The Smart NAV pilot, which included participants such as JPMorgan, Franklin Templeton, BNY Mellon, and State Street, explored a digital extension to DTCC’s Mutual Fund Profile Service (MFPS I) to leverage distributed ledger technology (DLT) for data dissemination and consumption.

Clients involved in the project gained the ability to consume price and rate data in real time through new interfaces, including APIs and smart contracts. The new data consumption methods include real-time API services and smart contracts designed for single funds or bulk fund groups, enabling instant updates and facilitating various use cases, such as automated portfolio rebalancing.

Once fully deployed, the Smart NAV would open opportunities for expanding the scope of data dissemination to include key reference data and other blockchain-triggered workflows. Such an infrastructure would provide the foundation for more streamlined and efficient operational processes across the financial industry, as tokenization of real-world assets (RWA) such as bonds, funds, and other traditional investments has become one of the most sought-after use cases for blockchain technology. Source

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