Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets.
Before Monday, the hopes of Ethereum’s US spot Exchange Traded Fund (ETF) approval seemed slim. Bloomberg ETF Analysts, such as Eric Balchunas and James Seyffart, had put the probability of approval at around 25%. Yesterday, however, Balchunas and Seyffart revised their probability of approval. It flipped from a pessimistic 25% to an optimistic 75%. Prediction market, Polymarkets, also saw the odds of an Ethereum ETF approval by 31st May spike. The bet currently has over $8.5 million wagered. On Monday afternoon, the probability of approval was around 11%, by 10:30pm it was 70%. Resultantly, Ethereum exploded over 9% from $3,148 and touched over $3,400, all within one hour. Overall, Monday’s daily increase of over 19% for the now $450 billion asset was equivalent to adding $70 billion, or nearly a Solana, to its market cap.
The cause of analysts’, and prediction markets’, change in expectations was a CoinDesk report. Allegedly, the securities exchange commission (SEC) alerted exchanges to update their Ethereum ETF 19b-4 filings on an “accelerated basis.” This came just three days prior to tomorrow’s deadline for VanEck’s ETF approval. Yesterday, Fidelity also filed their amended S-1 registration with the SEC. However, this version did not include Ethereum in the trust being staked, with the rewards distributed to holders. The turnaround time does seem extreme, and approval is not guaranteed yet. However, Standard Chartered Bank believes that the ETFs will receive approval this week. Additionally, they estimate inflows for the first year to be between $15-45 billion.
On Monday, we discussed how the US Congress and Senate, with bi-partisan support, overturned the anti-crypto bill, SAB 121. This event potentially began a major U-turn in US crypto policy. The timing is questionable with the elections later this year. No longer is crypto a fringe issue that does not influence who voters place their votes with. Donald Trump’s remarks on 9th May may have caused nervousness among Democrats and sparked the complete turnaround in the Biden administration’s stance on crypto. During a speech Trump had made at an NFT event he was hosting, he stated he was “good with” crypto. Even if posturing, this stance was a stark difference to the approach and opinion of Biden’s administration.
According to Coinbase, 52 million Americans own crypto. This is roughly 15% of the US population. If 10% of these crypto owners place a high priority on crypto policy affecting their election voting, this would represent around 3% of voters and could be enough to influence a result. It seems with crypto’s growing influence, politicians’ stances on it may become election winning, or losing.