Ethereum's Deja Vu? ✊✌️
Ethereum nears mid-2022 highs: Hopes of an ETF, BlackRock's interest, and rising volumes. Ethereum's gas limit increase and new updates. GameStop kills its NFT marketplace. What's Quantum Cats?
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Ethereum (ETH) has surged over 17% against Bitcoin (BTC) in the past 72 hours.
Ethereum is reaching levels not seen since mid-2022.
Currently Ether is trading around $2,500.
What makes Ethereum so happy?
Simple: Bitcoin spot ETFs are launched, and next up are Ethereum spot ETFs, waiting for SEC approval.
Speculation about an Ethereum ETF in the US later this year fuels investor enthusiasm.
BlackRock's interest in Ethereum, following its Bitcoin ETF, is a big catalyst.
The company has already filed with the SEC for a spot ETH ETF.
“I see value in having an Ethereum ETF. These are just stepping stones towards tokenisation and I really do believe this is where we’re going to be going,” Fink said.
Bitcoin ETF Success: Spot Bitcoin ETF trading volume surpasses $7.6 billion in its first two days, highlighting the potential for similar success with an Ethereum ETF.
Read this: Why Bitcoin ETFs a big deal? 🤔🤷♀️
Read this: First day blockbuster 👊🏼💥🔥
Ethereum is also waiting for that kind of boost!
"I see value in having an Ethereum ETF ... these are just stepping stones towards tokenisation and I really do believe this is where we're going to be going."
Supply in Profit
89.4% of Ether's circulating supply is currently in profit, a level not seen since 2021.
This high supply in profit might prompt traders to take profits, potentially leading to a short-term price correction.
Implied Volatility Impact
Bitcoin's implied volatility plummeted following the SEC's approval of spot ETFs. This serves as a lesson in volatility for traders speculating on a potential Ether ETF launch later in the year.
Implied volatility reflects the market's expectation of a security's price fluctuations, determined from its options prices. It's crucial for options pricing.
Post-ETF approval, implied volatility dropped sharply from 96% to 52%, highlighting the risks of holding long volatility positions on announcement days.
BTC's experience suggests caution in holding long volatility positions on ETF announcement days.
Ether options pricing could provide clues on market expectations and potential post-ETF launch reactions.
JPMorgan: Nikolaos Panigirtzoglou from JPMorgan suggests that for such approval, the SEC would need to categorise Ethereum as a commodity, not a security, which he deems unlikely, giving it no more than a 50% chance.
TD Cowen: TD Cowen, an investment bank, predicts that the US Securities and Exchange Commission (SEC) is unlikely to approve spot Ethereum (ETH) exchange-traded funds (ETFs) in the near future.
Gary Gensler's Stance? Cautious.
In a recent CNBC interview, he avoided direct comments on Ethereum ETF prospects, subtly differentiating Bitcoin's commodity status from other cryptocurrencies, possibly including Ethereum.
Sam Altman, CEO of OpenAI.
“The part that I find potentially a little scary is just the speed with which society is going to have to adapt and that the labour market will change.”
Altman was in talk with Bill Gates in a recent interview.
He acknowledges that AI might surpass human intelligence, leading to a post-scarcity world with new opportunities.
Altman believes AI will make workers more effective, increasing productivity for the same effort.
His quotes (you're welcome)
"If you make a programmer three times more effective, it's not just that they can write, they can do three times more stuff, it's that they can... think of totally different things."
"Although we are giving something up here, in some sense we are going to have things that are smarter than us.”
“For these... future extraordinarily powerful systems, we have been socialising the idea of a global regulatory body."
"It's, you know, both annoying, motivating and fun … But it does push us to be better and do faster and do things faster.”
Morgan Stanley believes that the approval of spot Bitcoin ETFs could be a game-changer for the global perception and use of digital assets👇🏻
On January 11 Vitalik Buterin calls for 33% increase in gas limit.
The increase to 40 million from 30 million aims to allow more transactions per block, theoretically boosting network capacity.
Ethereum developer Marius van der Wijden expressed reservations in his blog post, focusing on the growth of the blockchain's state size.
Software developer Micah Zoltu responded to Buterin, suggesting that the focus should be on enabling real-world users to run Ethereum nodes on everyday machines.
Major Update for Ethereum
Now the Ethereum Foundation is implementing significant changes to the account abstraction standard (ERC-4337).
Objective: To reduce gas consumption, especially on layer-2 networks.
The new version 0.7 of ERC-4337 follows nine months of usage and feedback.
Key Change: Account abstraction transactions will require specifying five gas values instead of just one.
Developer John Rising explained this change is due to the computational needs of accounts during signature verification.
TTD GameSTOP 🖐🏻
GameStop has decided to phase out its NFT marketplace by February 2, 2024.
GameStop CEO Matt Furlong:
“Although we continue to believe there is long-term potential for digital assets in the gaming world, we have not and will not risk meaningful stockholder capital in this space.”
Impact on NFT Owners
The closure means users will no longer be able to buy, sell, or create NFTs on GameStop’s platform.
GameStop assures NFT holders that their assets will remain accessible and saleable on other platforms, as they are on the blockchain.
The move to wind down the NFT marketplace aligns with GameStop's recent trend of scaling back its crypto-related services.
The company has been reducing its crypto offerings over the past two years.
In August 2023, GameStop advised customers to secure their “Secret PassPhrase” due to the discontinuation of access to iOS and Chrome Extension wallets.
In December 2022, the company indicated a shift away from crypto focus following a significant net loss and layoffs in its digital assets department.
TTD Taproot 👩🏻💻
Taproot Wizards advocate for reviving Satoshi-Era Bitcoin code.
Who? Taproot Wizards, known for promoting Bitcoin inscriptions.
Aim? To reinstate a Satoshi-era opcode, OP_CAT, in Bitcoin's scripting system.
Original Function: Used for concatenating two strings in Bitcoin's early scripting system.
Disabled in 2010 by Satoshi Nakamoto due to potential vulnerability concerns, such as DoS attacks.
Implementing OP_CAT is a relatively simple change, involving about 10 lines of code.
Bitcoin's consensus process for changes is slow, involving numerous developers and node operators.
OP_CAT could be re-enabled via a soft fork, similar to the 2021 Taproot activation, which doesn't require a hard fork.
OP_CAT's reactivation could expand Bitcoin's utility without a contentious hard fork.
Quantum Cats NFT Collection
Taproot Wizards created "Quantum Cats," a limited edition of 3,333 evolving cat images inscribed on Bitcoin.
The collection was revealed after being minted in a notable transaction and includes a 1-of-1 "Genesis Cat" to be auctioned by Sotheby’s.
Udi Wertheimer, co-founder of Taproots Wizards, highlights OP_CAT's role in enabling "covenants" for smart contracts and bridges on Bitcoin.
Quantum Cats also nods to the potential of making Bitcoin quantum-resistant.
TTD Surfer 🏄
The South Korean government is considering imposing sanctions on the use of crypto-mixing services, following the example set by the US.
Execs in the crypto industry are discussing the potential role of AI-based crypto rating agencies in flagging "dodgy" projects and mitigating risks.
Google Play Store in India has removed the Binance and OKX crypto exchange apps after the government issued a noncompliance notice against them.
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