Which tokens can you position in before the approval of Ethereum spot ETFs?
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Which tokens can you position in before the approval of Ethereum spot ETFs?
A Gemini research report predicts that after the approval of a spot Ethereum ETF, net inflows in the first six months could reach as high as $5 billion, and the ETH/BTC ratio may rise by 20% to 55%.
Navigating Web3 tides with focused insightsBy James, BlockTempo
After the U.S. Securities and Exchange Commission (SEC) approved 8 Ethereum spot ETFs' 19b-4 exchange rule change filings in May, issuers have been successively submitting updated S-1 registration statements. Once the SEC approves these filings, Ethereum spot ETFs will be cleared to begin trading.
Regarding the latest progress, Nate Geraci, president of The ETF Store, said today (8th) that the deadline for revised S-1 submissions has passed. It remains unclear how quickly the SEC will act, but he expects Ethereum spot ETFs could launch within next week or the following two weeks.
Bloomberg analyst James Seyffart previously projected that Ethereum spot ETFs might debut later this week or during the week of July 15.
In a recent research report, Gemini estimated that if the U.S. approves Ethereum spot ETFs, net inflows could reach as high as $5 billion in the first six months. With the current ETH/BTC ratio near multi-year lows, strong capital inflows may trigger a catch-up rally. If the ETH/BTC ratio returns to its three-year median, ETH could rise nearly 20%. If it reaches its historical peak of 0.087, ETH could surge by 55%.
Which Ethereum Ecosystem Projects Are Worth Watching?
Once Ethereum spot ETFs are successfully approved and sustained capital inflows follow, projects within the Ethereum ecosystem stand to benefit. Therefore, it's worth focusing on the largest sectors and projects within the Ethereum ecosystem. Below is an overview for readers.
Layer 2
Layer 2 solutions aim to support Ethereum's growing ecosystem with higher TPS and lower gas fees—making their importance self-evident. Key projects include MATIC, MNT, ARB, STX, IMX, OP, STRK, ZK, AEVO, MANTA, BLAST, and others. According to CoinGecko data, Layer 2 ecosystem tokens have declined between 25% and 50% over the past 30 days.
Layer 2 token performance. Source: CoinGecko
LSD
Liquid Staking Derivatives (LSD) protocols emerged after Ethereum’s transition from Proof-of-Work to Proof-of-Stake, offering staking services for nodes. Major projects include LDO, SSV, RPL, FXS, and others. CoinGecko data shows LSD ecosystem tokens have fallen between 25% and 50% over the past 30 days.
LSD token performance. Source: CoinGecko
DeFi
DeFi applications span multiple areas including decentralized exchanges (DEX), lending, stablecoin trading, and issuance. Key projects include Pendle, UNI, AAVE, COMP, CRV, MKR, and others. According to CoinGecko, DeFi ecosystem tokens have declined between 15% and 40% over the past 30 days.
DeFi token performance. Source: CoinGecko
ETH-Collateralized Stablecoin Protocols
Stablecoins can be issued through various mechanisms, one of which involves asset collateralization—where ETH is among the largest collateral assets. With the advent of LSD and restaking, project teams can deploy staked ETH to earn yield, giving stablecoins inherent interest-generating capability. Key projects include ENA, LBR, and others. However, ENA has dropped around 60% over the past 30 days.
ENA token performance. Source: CoinGecko
Restaking
Restaking refers to re-staking assets after initial staking and has evolved into one of Ethereum’s mainstream DeFi applications. Leading projects include REZ, ETHFI, ALT, BB, and others. CoinGecko data indicates that restaking-related tokens have performed poorly over the past 30 days, declining between 40% and 60%.
Restaking token performance. Source: CoinGecko
The approval of Ethereum ETFs may bring significant growth opportunities to the Ethereum ecosystem. The above projects represent only a portion of the landscape—many other promising initiatives also warrant attention. Stay informed about market developments and make investment decisions according to your own risk tolerance.
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