Ethereum ETF issuers launch marketing campaign with slight dig at TradFi
|- Ethereum ETF issuer Bitwise launches ad marketing its spot ETH ETF.
- ETH restaking and rehypothecation have been on an upward trend since April.
- Ethereum's open interest decline could help cool rising volatility.
Ethereum's (ETH) price is down about 1% on Thursday following a Bitwise Ethereum ad that slightly poked fun at traditional finance. Meanwhile, Ethereum restaking has continued to grow amid potential systemic risks.
Daily digest market movers: Bitwise Ethereum ad, restaking risks
As the potential launch of spot ETH ETF draws closer, issuers have begun launching marketing campaigns in a bid to capture the market. Bitwise released a 40-second marketing ad on Thursday comparing Ethereum's ability to move assets 24/7 daily across the globe against traditional finance's seven-hour and weekend time limitations.
Also read: Ethereum ETFs may not cause upward surge in ETH price as many expect
Bitwise earlier filed its updated S-1 draft with the Securities & Exchange Commission (SEC) on Tuesday after the agency commented on it last Friday.
Nate Geraci, President of the ETF Store, expects other issuers to send in their updated S-1s before the end of the week. He also speculated that spot ETH ETFs could launch before July 4.
Unlike Big Finance, Ethereum doesn't clock out at 4 p.m. pic.twitter.com/0gCJi3wlXp
— Bitwise (@BitwiseInvest) June 20, 2024
Unlike Big Finance, Ethereum doesn't clock out at 4 p.m. pic.twitter.com/0gCJi3wlXp
— Bitwise (@BitwiseInvest) June 20, 2024
According to data from IntoTheBlock, 16.3% of all staked ETH is being restaked in protocols like Eigen Layer, Symbiotic and Karak. The restaking data also shows that ETH's rehypothecation ratio — the ratio of ETH that has been restaked more than once in multiple protocols — is at 3.34%, up from 0.29% in early April.
Restaking helps extend Ethereum's security to other applications, but it also introduces systemic risks that may compromise the safety of the Main chain. Hence, users may need to track such numbers to understand their effect on investment decisions.
ETH technical analysis: Ethereum volatility could drop amid signs of a rally
Ethereum traded around $3,500 on Thursday, with a total liquidation of $24.71 million. ETH's long liquidations are at $13.35 million, and shorts are at $11.36 million.
Ethereum open interest (OI) declined by about $2 billion after reaching an all-time high of $13 billion on June 5, according to data from CryptoQuant. Open interest is the total number of long and short positions in the market. A significant increase in open interest may lead to higher volatility in the market, while a drop may result in calmer markets.
ETH's new OI high comes despite Ethereum's price not yet reaching a new all-time high, leading to increased volatility and liquidations. The drop in OI could calm the market temporarily as the anticipation for spot ETH ETFs builds on.
Also read: Spot Ethereum ETF anticipation wipes nearly $70 million worth of ETH
The ETH Taker Buy Sell ratio also supports the bullish sentiment. The ratio measures the volume of buyers and sellers in the derivatives market. A value above 1 indicates that bullish sentiment is dominant, while a value below 1 shows that traders are more bearish.
The 7-day moving average of the ETH Taker Buy Sell ratio is at 0.99 on June 20, recovering from a sharp drop to 0.95 on June 12. This indicates traders are gradually becoming bullish.
ETH/USDT 4-hour chart
The bullish sentiment from traders coupled with the potential launch of spot Ethereum ETFs may see ETH tackle the $3,900 resistance level and move further above this cycle's high of $4,093. A breach below the $3,300 support level would invalidate the bullish thesis.
Cryptocurrency prices FAQs
Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.
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