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Odds on Spot Ethereum ETFs
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Spot Ethereum ETF approval ‘more likely’ after SEC’s rumored 180
Key points:
Ethereum hiked by +15% after analysts updated odds of spot ETH ETFs being approved.
Analysts believe ‘political pressure’ could be behind SEC’s rumored 180.
News - Ethereum, the world’s largest altcoin, led the latest crypto-market rally after ETH climbed by over 15% on the price charts. By doing so, the crypto went past its psychological resistance of $3,500, with many now expecting ETH to test its ATH again.
ETH’s latest rally came on the back of market analysts updating the odds of the SEC finally approving spot Ethereum ETFs in the United States.
Higher odds on the cards - According to Bloomberg’s Eric Balchunas, there is increasing chatter that the Securities and Exchange Commission could do a 180 and relent to the approval of a spot ETH ETF after months of little engagement with applicants.
A lot of this chatter is said to be in the form of political pressure, especially in light of the fact that cryptocurrencies have lately received a lot of bipartisan support. The same was evidenced by Republicans and some Democrats coming together to repeal the SEC’s SAB 121.
On the back of the said chatter, Balchunas updated the odds of approval from 25% to 75%. Similar odds on Polymarket, a decentralized betting platform, increased from 11% to 54%.
Conclusion - Here, it’s worth noting that the SEC is expected to take a decision on VanEck’s application by 23 May. While it could still be months before these ETFs are launched, even if approved this week, many expect ETH’s price to profit from the same.
At the time of writing, the altcoin was valued at close to $3,600, having climbed by over 16%. This, on the back of ETH breaking out of a falling wedge pattern on the charts.
Gala Games admits to ‘messing up’ after $200M exploit
Key points:
Blockchain gaming project Gala Games targeted by unknown attackers.
A community node vote is expected soon to decide next steps.
News - Popular gaming project Gala Games is in the news today after one of its smart contracts was exploited to the tune of $200M. While the details are still fuzzy at this point in time, analysts believe an external hacker or a rogue address owner was behind this episode.
The address responsible for this exploit reportedly had admin level clearance, fueling speculation among many that this could, in fact, be an inside job.
Exploiting all the details - According to a developer, the compromised/rogue Gala Games admin address illegally minted over 5 billion GALA tokens, which were then systematically sought to be sold on decentralized platforms like Uniswap.
At the time of writing, over 200 million GALA tokens had already been sold. This wave of selling, as expected, contributed to GALA’s depreciation on the price charts.
Gala Games CEO Eric Schiermeyer was quick to comment on the incident, conceding to the fact that they messed up their internal controls. According to the exec, the exploit was identified within 45 mins, with the wallet in question now frozen too.
Not its first rodeo - CEO Schiermeyer also went on to say that they might have identified the culprit already, with the project now coordinating with law enforcement agencies.
This isn’t the first time Gala Games has been at the forefront of a major exploit though. Back in 2021, a similar exploit led to the loss of $130 million.
Fourth-generation stablecoins present new challenges - Bithumb
Key points:
Stablecoins were the subject of Bithumb’s latest report titled “Easy Economy.”
Fourth-generation stablecoins pose several challenges, it said.
News - Bithumb’s latest market report titled “Easy Economy” focused on the market’s stablecoins, specifically the four generations of stablecoins operable today.
According to the same, while first-gen stablecoins like Tether have often been criticized for their supposed lack of transparency, the same has been resolved by issuers now publishing quarterly holdings.
A generational issue - Bithumb also identified the use of second-generation stablecoins like DAI and their use as “source of reserve value.” The South Korean exchange’s analysts noted that while this generation of stablecoins struggles with the “disadvantage of greater value volatility,” the same has been somewhat mitigated by a conservative approach when issuing coins.
As far as third-generation stablecoins that are algorithmic in nature, Bithumb found that these crypto-assets have their drawbacks too. To put it specifically, while these stablecoins maximize scalability under market conditions, they can be prone to de-pegging from their fixed value.
Fourth-generation stablecoins essentially attempt to improve on the aforementioned assets with “improved” algorithmic features.
Still not perfect - Analysts are still on the fence as far as fourth-generation stablecoins are concerned though. In fact, Bithumb’s analysis suggested that while the assets are bringing much-needed market attention to certain assets, they remain “risky.”
The exchange concluded its report by noting that since the emergence of fourth-generation stablecoins, USDT’s market share has fallen by 10%.
U.S House of Representatives to vote on FIT21 Bill this week
Key points:
FIT21 Bill meant to clarify how the United States’ CFTC and SEC will treat digital assets.
Pro-crypto and blockchain advocates have come out in support of the bill.
News - The much-anticipated Financial Innovation and Technology for the 21st Century (FIT21) Bill will finally be put to vote this week, before the holiday weekend. This was revealed by Republican lawmakers who are part of the House Financial Services Committee.
This vote comes within weeks of FSC Chair Patrick McHenry claiming that a full chamber can now vote on FIT21 after consideration in the House Committee on Rules.
Details - Here, it’s worth pointing out that the bill has seen little movement since it was passed by the House Financial Services Committee back in July 2023. A vote to pass this legislation this week, however, will go a long way toward clarifying the role of agencies and regulators when dealing with digital assets in the United States.
This vote will follow the one on SAB 121, during which the U.S. Senate voted to repeal the SEC’s crypto-accounting policy guidelines. This, despite President Joe Biden threatening to wield his veto.
Support across quarters - To its credit, FIT21 does enjoy its share of bipartisan support among both Democrats and Republicans in the House. That’s not all, however, with most crypto stakeholders also vocal about the need to pass this legislation.
According to the Blockchain Association, for instance, the United States needs “pro-innovation and pro-consumer guardrails” like FIT21.
More stories from the crypto ecosystem
Interesting facts
Back in 2021, SpaceChain launched the first Ethereum node in space. According to the project, this experiment was intended to enhance the security and resilience of Ethereum’s blockchain, while reducing its reliance on centralized infrastructure.
Following the first Bitcoin halving when block rewards were halved from 50 BTC to 25 BTC, a group of miners attempted to alter their clients and continue mining on a chain where the block subsidy was still worth 50 BTC post the halving.
Dogecoin can trace its roots back to Bitcoin, albeit not directly. Dogecoin is a fork of LuckyCoin, which itself was split from Litecoin - A cryptocurrency created using a copy of Bitcoin’s source code.
Top 3 coins of the day
Bonk (BONK)
Key points:
Popular memecoin’s value surged by over 24% in just 24 hours.
Latest hike merely added to altcoin’s week-long uptrend.
What you should know - At press time, BONK was trading at $0.00003052, having appreciated by close to 35% in the last 7 days. In fact, much of this surge can be attributed to the crypto-market’s performance over the last 12 hours or so, with BONK emerging to be one of the market’s biggest beneficiaries. The hike in price was accompanied by a spike in BONK’s trading volumes too. The altcoin’s technical indicators, however, were not on the same page as the crypto’s price. While the SMA’s presence below the price candles underlined the market’s bullishness, the Chaikin Money Flow was still below 0 - A sign of capital outflows.
Ethereum Classic (ETC)
Key points:
Like BONK, ETC hiked on the back of the crypto-market’s general bullishness.
Apart from ETH, ETC is the most direct beneficiary if SEC approves spot Ethereum ETFs.
What you should know - Following reports that the United States’ SEC might be doing a 180 and might approve spot Ethereum ETFs, the crypto-market rallied. ETH led the charge, with the altcoin recording a hike of almost 20% in just 24 hours. The rest of the market followed suit as expected, with ETC in the mix too. Until its latest hike, the altcoin was stuck trading within a tight range. However, it has since broken out of the same. Contrary to BONK, ETC’s technical indicators seemed to be on the same page too as while the Bollinger Bands highlighted incoming price volatility, the RSI was well above 50. It’s worth noting, however, that ETC’s market did seem to be at the risk of being overbought.
dogwifhat (WIF)
Key points:
WIF’s price trends over the last 2 weeks have been very inconsistent.
WIF’s latest hike is not enough to initiate an uptrend.
What you should know - At press time, WIF was valued at $2.78 on the charts, having hiked by 11% in just over 24 hours. And yet, unlike most other cryptos in the market, this uptick wasn’t enough to overhaul WIF’s latest fortunes. Especially since this hike came on the back of the memecoin falling by 18% just days prior. What this meant was that WIF wasn’t able to breach its trading range and initiated no definite uptrend. These findings were supported by the technical indicators as while the Parabolic SAR’s dotted markers suggested bearishness, the MACD and Signal lines were well below the histogram despite it flashing some green signals.
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