April 12, 2022
Finally, after numerous attempts to launch spot Ethereum exchange-traded funds (ETFs) and offer crypto enthusiasts a new way to leverage the popularity and worthiness of the asset, these investment vehicles went live and are trading. After the triumphant spot Bitcoin ETF launch at the year’s commencement, products tracking the second-largest cryptocurrency, with a market cap of over $399BN at the time of writing, hit the Nasdaq, NYSE Arca, and Cboe on 23 July.
Every time a fresh crypto investment breaks into the market, people are all about its likelihood of changing the sector for the better and pushing prices on an upward trajectory. It’s around these times that more people than ever consume crypto-related content in order to determine the likelihood of the ETH price prediction coming to fruition and reward those holding amounts of it.
The crypto audience looks expectant and excited to discover the implications of this milestone on the broader crypto landscape. Though it might be early to discuss the impact of the ETH ETF launch on Bitcoin, since it has already witnessed the debut of its own coin-tracking ETF, another category awaits patiently to reap some benefits – the alternative coins. Altcoins represent any cryptocurrency that’s not Bitcoin. Ethereum and Bitcoin offer utterly different value propositions to investors, whereas the distinction between the ETFs that hold each. Let’s discover what the launch of ETH ETFs could mean for the altcoin ecosystem and if any specific crypto exhibits the potential to fluctuate against this background.
To grasp the bigger picture, it’s helpful to delve into the first and most important day in the ETF space, namely 23 July, when eight investment firms received the OK to release nine ETFs investing straight into ETH. The triumphant asset managers are Grayscale, BlackRock, Bitwise, VanEck, Fidelity, Franklin Templeton, Invesco/Galaxy Digital, and ARK/21Shares. Similar rules and principles will guide the tools launched by the rivals, so the fees will not differ much, generally ranging between 0.66% and 2.50%.
If you’re new to ETH ETFs, remember to look at them as simple investment vehicles that track Ethereum’s price and enable investors to take advantage of price movements in a different way than they did before. To date, you could profit from Ethereum’s price fluctuations or the coin as a store of value and payment method by creating an account on a prominent crypto exchange platform and setting up your cold or hot digital wallet. The debut has sparked investor inquisitiveness about the vehicles they should turn their attention to.
Fast-forward to today, and investors who want to stick to the tried-and-tested route are abuzz with excitement about the impact that ETH ETFs could have on Ethereum’s altcoin competitors. Names like XRP, Solana, Avalanche, Matic, Polkadot, Chainlink, Monero, and Litecoin top the list. What are the viewpoints of the knowledgeable elite in the crypto space, and how reliable are their stances?
As one of the most prominent figures in the crypto space, Anthony Pompliano's viewpoint is not to be overlooked, all the more since it’s been so clearly stated. According to the connoisseur, the momentum gained by Ethereum and the groundbreaking application that’s connecting an ages-old investment vehicle with the revolutionary asset could harbinger more official launches of similar products. The launch of ETFs may bring all the other “altcoins to Wall Street”. Vertex CEO Darius Tabai shares the same views, believing the launch of ETH ETFs could benefit the altcoin realm. Suppose Ethereum rises in price; an upward tendency could follow for altcoins under the halo effect.
Bitcoin ETF’s story may have been louder than Ethereum’s, but the latter is guaranteed to boost adoption for the cryptocurrency sector, as Pompliano posits. During a CNBC interview, he stated that Bitcoin has indeed rejoiced over the most enthusiastic ETF launch to date, explaining that a lack of clarity around Ethereum as a blockchain is what hindered the second ETF announcement from enjoying the same thrill.
While Bitcoin is hailed for its scarcity, being capped at 21MN coins that can ever be developed, Ethereum has a different purpose. The latter’s appeal lies in its utility, thanks to the myriad of decentralised applications and smart contracts created via it. Heavyweights like Jay Jacobs, Head of Thematic and Active ETFs, endorse this viewpoint. According to the chief, Ethereum is to be regarded as a worldwide platform for apps, which gives it worth that cannot be overstated.
A recently launched report by on-chain analyst Thor Hartvigsen discloses how ETH’s likelihood of surpassing other altcoins due to the ETF launch is pretty high. This ascendancy may occur in spite of the broader market expectations that these coins offer leveraged exposure to the second-best cryptocurrency.
According to the pundit, gathering ETH-related altcoins only for the leveraged introduction to the largest altcoin, Ethereum, may not bring the expected result. It can be challenging to spot altcoins that could outclass Ethereum, since the whole altcoin market cap has been losing ground to Ethereum as of late.
ETH has outdone some altcoins lately, including memes, Defi coins, and Layer-1 and Layer-2 ones that were supposed to be somehow connected with it. Only a few tokens managed to keep up with the champ, including PEPE, PENDLE, SHIB, TON, MKR, and ENS.
These days, all the future-oriented talk revolves around the altcoins that may follow in Ethereum’s footsteps and see ETFs tracking their values at Wall Street. Some altcoins have gathered the largest number of upvotes, including:
How would you feel about a potential launch of ETFs holding altcoins? What about the impact of the recently released Ethereum ETF on the existing altcoins?
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