Ethereum Surges 16% on ETH ETF Approval 180

This Week In Crypto… Ethereum surges 16% as Bloomberg boosts its odds of an Ethereum ETF getting approved, Bitcoin tops $70,000 for the first time since the halvening, and the House prepares for two more crucial crypto votes.

Listen to Coinage host Zack Guzman discuss these stories and more in our Live News Digest above.

Ethereum ETF 180:

Odds of an ETH ETF approval were not looking good. That quickly changed on Monday.

Bloomberg analysts James Seyffart and Eric Balchunas upped their odds of an ETH ETF approval to 75% from 25%, citing rumors that the Securities & Exchange Commission was asking exchanges to update their filings on an accelerated basis. CoinDesk reported the same thing in the afternoon as Ethereum had already exploded more than 11%.  

The SEC was due to respond to filings from VanEck on May 23 and Ark Invest/21Shares on May 24 and had not engaged with issuers to the level that indicated an approval was at all likely. There is a chance that the bipartisan vote in the House and Senate forced the SEC to re-think its anti-crypto approach as President Biden now faces down his threat of vetoing the bill that would end a key SEC restriction long hated by banks and the crypto industry.

The next steps would be seeing the 19b-4 filings approved, before S-1 filings to pave the path for the ETH ETFs to begin trading. Nothing is final yet. We'll be covering.

Where Is Bitcoin ETF Adoption:

To some, the Bitcoin ETFs continue to impress by the historic amount of capital they have sucked in such a short amount of time. By that measure, the Bitcoin crop are some of the most successful ETFs of all-time, with more than $12 billion in cumulative inflows.

To others, like research analyst Jim Bianco, where those inflows are coming from is the more important question to be asking at this stage. According to the 13-F filings he’s analyzed, the majority of early Bitcoin ETF buyers are hedge funds and not investment advisors. Meaning the narrative that boomers are buying up bitcoin just isn’t happening yet: 

“Only ~3% of the outstanding ETF mkt Cap was held by Investment Advisors, completely blowing up the narrative that "the Boomers are coming." They might over time (as in years) but did not in Q1.

 

That wave might take a little more time, and would certainly beget more buying interest. As Bianco notes, most of the ETF buyers got in around $58,000. At $70,000, there’s about 20% worth of returns to brag about. We’d bet that advisor number jumps considerably by next quarter.

A Big Grayscale Shakeup:

Grayscale CEO Michael Sonnenshein announced he’s stepping down as CEO on Monday. The company has tapped Goldman Sachs executive Peter Mintzberg as his successor. Some speculated that the shakeup could signal Grayscale’s appetite for a sale has ratcheted higher. 

It’s interesting timing as Grayscale finally notched positive weekly inflows into its Bitcoin ETF last week. It’s also interesting timing as Grayscale’s sister company Genesis settled with the office of the New York Attorney General to the tune of $2 billion and finalized its bankruptcy plans.

Crypto Stays Hot In Washington:

Coming off a major bipartisan victory with both the House and the Senate rebuking SEC Staff Accounting Bulletin 121, the crypto industry is set to press its luck with two more votes in the House coming up this week.

This week, the chamber will weigh FIT21, legislation that would lay out a path for digital assets to be regulated by the CFTC and help clarify what is kosher in the land of tokens. The House will also weigh a bill that seeks to restrict the creation of a central bank digital currency. Unlike the measure that passed last week, it’s unclear if either of the bills this week have a path to get through the Senate. 

Other Headlines From Around Web3:

• Memecoin Launchpad Pump.Fun Loses Nearly $2M In Exploit

• Three Ways McHenry’s Crypto Markets Bill Will Change the Industry

• Bored Ape Trader Who Bought 1% of the Supply in January Is Down Nearly $2 Million

Calling All Coinage Members:

Coinage is now nominating influential crypto builders to our ranks. Our first vote for the month of May kicked off this weekend. Head to Snapshot to vote for our nominated addition to Coinage Caucus membership.