Fate Of Ethereum ETFs 💊
Fate Of Ethereum ETFs 💊
The complicated path to an Ethereum ETF approval. Crypto voters will be heard in the 2024 election, says Mark Cuban. OpenAI's Sam Altman has a radical vision for the future. Bitcoin Runes slows down.
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This has been a phenomenal year so far.
Ethereum ETFs approval is the next big event for the crypto world after Bitcoin ETF approval and the halving.
Who's waiting for the approval?
What's the hold up?
The SEC is likely scrutinising the potential risks associated with Ethereum ETFs, similar to their approach with Bitcoin ETFs earlier this year.
But not that easy.
Chances are very less for a May approval.
The biggest problem? SEC wants to treat ETH as a security.
In fact, the SEC has secretly considered Ethereum (ETH) a security since 2023, according to Consensys in an unredacted lawsuit.
An order approved by the Commission on April 13, 2023, explicitly refers to ETH as a security, authorising an investigation into certain securities, including ETH.
SEC chain Gary Gensler, always refused to clear things up whether they consider Ethereum as a security. Said he would "defer on that question.
Bloomberg Interview: SEC's Gensler on Systemic Risk, Climate Rule and Crypto
US elections can decide one thing or two
Bloomberg Intelligence ETF analyst Eric Balchunas said.
“If there’s a new president, you file again … Maybe you get approved. Or you sue. Either way, that will take a whole other year to play out.”
No one will sue this time? Balchunas doesn't think they will.
“None of these other firms want to piss off the SEC. Grayscale was unique in that it wasn’t a big ETF issuer. The rest of these firms have other things going on, and they’re more scared.”
Trump the key? Balchunas on political impact.
“Trump is not necessarily pro-crypto. Remember his previous SEC chief Jay Clayton didn’t allow that ETF either. So he’s not going to be like, ‘let’s just go crazy.’ But he’ll probably still be better for crypto and spot ETFs.”
Grayscale gonna help?
Grayscale is one of the major reason why Bitcoin ETFs are trading in the US right now.
A judge ruled in favour of Grayscale's lawsuit.
The court agreed that the SEC hadn't provided a clear justification for repeatedly rejecting Grayscale's proposal to convert its product into a Bitcoin ETF.
But around this time, Grayscale sitting out the fight.
They are unlikely to sue the SEC for Ethereum ETFs and in fact, they withdrew a key filing, making it easier for the SEC to deny Ethereum ETFs.
Why?
Their own ETF lost $17 billion to competitors with lower fees.
Grayscale's 2.5% management fee on Ethereum trusts is much steeper than the competition.
Could also be because of the lower demand for Ethereum ETFs compared to Bitcoin.
Grayscale might be prioritising other fights.
Block That Quote 🎙️
American businessman and television personality, Mark Cuban
“This is also a warning to Congress. Crypto voters will be heard this election.”
Cuban warns Biden to regulate all crypto or risk losing the election.
Read: SEC Can't Stop Suing 👨⚖️
And it's not slowing down. CFTC Chair Rostin Behnam predicts another wave of enforcement in the next 18 months.
A Slice of GPT For Everyone
OpenAI's Sam Altman has a radical vision for the future: replacing Universal Basic Income (UBI) with "Universal Basic Compute."
Watch: All-In Podcast with Sam Altman
Imagine everyone getting access to a powerful AI like GPT-7, not just cash.
People could use this AI power
Personal projects
Reselling it to others
Donating it to research
Why the switch? Altman believes AI advancements will revolutionise jobs, potentially displacing many workers. UBI might not be enough.
Will ChatGPT get permission for porn? "It depends"
OpenAI introduced a new model specification that led many to believe its AI tools would be allowed to generate adult content.
The company clarified that its current policy prevents ChatGPT from serving up NSFW content.
ChatGPT on iPhones?
According to a Bloomberg report, Apple is finalising a deal with OpenAI to bring its features to iPhones. It's unclear if users can disable these features if they prefer a more traditional iPhone experience.
In the Numbers 🔢
$130 million
This week’s digital asset investment products inflow, CoinShares weekly report.
Crypto investment picks up after five weeks.
Bitcoin saw US$144m inflows.
The US contributed the majority of inflows.
Grayscale saw its lowest weekly outflows since January at US$171 million.
ETP volumes continued to decline, reaching US$8 billion for the week compared to the April average of US$17 billion.
Runes Protocol Slows Down with Bitcoin Slump
The Runes protocol, launched on Bitcoin with much fanfare three weeks ago, is experiencing a slowdown in activity.
Early Boom: Launched alongside the Bitcoin halving event on April 19th, Runes generated $135 million in fees during its first week. Investors flocked to the protocol, driving up transaction fees for Bitcoin miners.
Read: What Are Bitcoin Runes? 🙇♀️
Recent Dip: May 10th saw the lowest number of new mints and new wallets interacting with the protocol since launch.
While Runes still generates hundreds of thousands in daily fees, it hasn't surpassed $1 million in total fees for most (just twice) of the past two weeks.
Transaction Tumble: Runes transactions once dominated the Bitcoin network, accounting for over 80% of activity at its peak. However, that share has dwindled considerably.
Early adoption challenges? Could be. Many new platforms face initial hurdles in user adoption. Several Rune collections boast market caps in the hundreds of millions. Runes developer Casey Rodarmor has upcoming projects planned, hinting at continued innovation.
The Surfer 🏄
Coinbase's Stand With Crypto launches a political action committee (PAC). The PAC will endorse political candidates for "common-sense crypto policy" in the U.S. Senate and House of Representatives. The initiative has already received over $86 million in donations towards supporting pro-crypto initiatives.
Pudgy Penguins' plush line is gaining enthusiasm and is being sold in some of the world's biggest retailers.Pudgy Penguins sold 1 million plush units in less than a year, marking a major consumer product success for the company.
Erik Voorhees, founder of ShapeShift, has launched a privacy-focused AI platform called Venice. Venice offers generative conversation and image creation services without holding user data. Aims to eliminate censorship and uses blockchain for permissionless payment and web3 infrastructure for encryption.
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