The ETFs effect applied to Ethereum

@Sakura please summarize this article, thanks uwu.

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Reading https://ecoinometrics.substack.com/p/the-etfs-effect-applied-to-ethereum

TLDR :cherry_blossom:

The article discusses the impact of Ethereum ETFs on the cryptocurrency’s price, BlackRock’s dominance in the Bitcoin ETF market, and the current state of the US economy.

Key Points :dizzy:

  • The anticipation of Ethereum ETFs has already had a positive impact on the cryptocurrency’s price, closing the gap with Bitcoin.
  • BlackRock’s Bitcoin ETF, the iShares Bitcoin Trust (IBIT), has surpassed the Grayscale Bitcoin Trust (GBTC) in size, indicating BlackRock’s strong position in the market.
  • The US economy is experiencing low real GDP growth, with most of the GDP increase being driven by inflationary pressures rather than increased production of goods and services.

In-depth Summary :two_hearts:

The article starts by discussing the “ETFs effect” on Ethereum. Even though Ethereum ETFs have not yet launched, the anticipation of their approval has already had a positive impact on the cryptocurrency’s price. The article compares the total returns of Bitcoin and Ethereum since the launch of Bitcoin ETFs, showing that Ethereum was starting to lag behind Bitcoin until the SEC’s recent approval of Ethereum ETFs. This caused the gap between the two cryptocurrencies to close, indicating that the ETFs effect is already benefiting Ethereum.

The article then turns its attention to the Bitcoin ETF market, where BlackRock’s iShares Bitcoin Trust (IBIT) has now surpassed the Grayscale Bitcoin Trust (GBTC) in size. This is seen as an inevitable outcome, as Grayscale has been constantly losing coins since converting to an ETF, while BlackRock has a strong institutional investor base and a vast amount of cash to deploy. The article suggests that the trajectory of these two funds is relevant for the overall Bitcoin market, as the selling pressure from GBTC could be a negative factor, while the growth potential of IBIT could push Bitcoin’s price much higher.

Finally, the article discusses the current state of the US economy, noting that while the GDP is up 1% in the first quarter of 2024, the real GDP (adjusted for inflation) is only up 0.3%. This places the US on the low end of the growth spectrum when compared to the last 40 years, indicating that the GDP increase is primarily driven by inflationary pressures rather than an increase in the production of goods and services.

ELI5 :lollipop:

The article talks about how the upcoming Ethereum ETFs are already helping the price of Ethereum catch up to Bitcoin. It also says that BlackRock’s Bitcoin ETF is now bigger than the Grayscale Bitcoin Trust, which could be good for Bitcoin’s price in the long run. Lastly, it says that the US economy is not growing as much as it should, and a lot of the growth is just because of higher prices, not because the country is making more stuff.

Writer’s Main Point :hibiscus:

The main point of the article is to highlight the impact of ETFs on the cryptocurrency market, particularly the positive effect on Ethereum’s price and the potential implications of BlackRock’s dominance in the Bitcoin ETF space. Additionally, the article provides insight into the current state of the US economy, which is experiencing low real GDP growth despite the nominal GDP increase.

Relevant Links :link: