Ethereum ETF Launch: $1B Volume

Fairshake Hit $200M | COIN Buy Rating

Marco Manoppo & Karon Pangestu
July 24, 2024

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Good Morning.

Ethereum ETFs performed better than expected. Reportedly Grayscale’s ETH trust outflow is in the ~$500M range, but the price remains relatively unchanged. Risk-to-reward for ETH at the moment is also much better than BTC and ETH given where its price at relative to its ATH.

In Today's Email:

What Matters: Ethereum ETF launch 💰️
Case Study: $COIN buy rating 🪙
Governance & Features: Avail launch 🔵

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Narratives: Pay close attention to Grayscale ETH trust outflow and ETFs inflow.

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WHAT MATTERS

Ethereum ETF Launch: $1B Volume

ETH ETFs Volume - James Seyffart

State of play: Ethereum ETFs had a strong debut, recording over $1B of total volume and over $106M in net inflows on their first day. However, ETH's price remains unchanged at around $3,400 in the past 24 hours.

BlackRock and Bitwise's ETFs led the market, with BlackRock’s ETHA seeing $266.5M and Bitwise’s ETHW garnering $204M in net inflows. Fidelity’s FETH followed with $71.3M.
Grayscale’s ETHE recorded $484.9M outflows on the first day — equating to 5% of the once $9B fund.
Ethereum ETFs first day recorded 23% of the trading volume seen during Bitcoin ETFs' debut day.
All spot Ether ETFs will have a base fee between 0.15% and 0.25%, except Grayscale’s ETHE, which has a 2.5% base fee.
Blackrock’s ETHA and Grayscale Ethereum Mini Trust offer a discounted fee of 0.12% for the first 12 months or until the funds reach a certain number in net assets.

Ethereum ETF Flow - Farside

What’s next: ETH ETFs’s $106M debut day net inflow is ~12% of the $870M Bitcoin ETFs debut day net inflow.

Based on Lai Yuen’s ETH Inflows Hopium Table and current inflows, ETH price might increase by less than $400.

Lai Yuen

Why it matters: By all ETF launch metrics, this is a successful launch. It broadens accessibility to ETH and and a significant catalyst for Ethereum's expanding role in global finance.

Our take: Ethereum inflows should have a larger effect on the onchain market dynamics. The market desperately needs this to support all of the new token launches.

For builders and investors: You might be bored of ETF news, but having more regulated products means a better likelihood that the total crypto market cap will go beyond $3T.

CASE STUDY

Coinbase ($COIN) Upgraded to Buy

Source: Bloomberg

Citi has upgraded Coinbase Global Inc.($COIN) from neutral to buy, citing an improved regulatory environment in the US from current political dynamics and the overturning of the Chevron precedent.

Citi raised the price target to $345 from $260.
Citi believes the improved regulatory environment potentially unlocks institutional capital, investment, and collaboration with TradFi.
Analyst Ratings: 14 buy, 12 hold, and 4 sell ratings on COIN, according to Bloomberg.

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INSIGHTS

Pro-Crypto Fairshake Becomes Largest Super PAC

Federal Election Commission

Pro-crypto group Fairshake has become the largest super PAC of this US election cycle, raising almost $203M, surpassing the Make America Great Again super PAC, which raised $201M.

At the time of writing, Fairshake has made $83M+ in disbursements and has almost $118M cash on hand.
Fairshake supports political candidates and regulatory efforts for clearer legal frameworks for blockchain in the US.
Faishake is receiving significant donations from crypto firms ahead of November’s election.
Coinbase, a16z crypto, and Ripple donated $75M ($25M each) to Fairshake.
Cameron and Tyler Winklevoss also contributed $4.9M to Fairshake.

FEATURES & GOVERNANCE UPDATE

Avail DA & Avail Token Launch

Avail DA Mainnet & the AVAIL token are now live!
Today marks the launch of Avail DA, the first modular data availability layer using validity proofs + data availability sampling. Now, build blockchains that truly scale with demand.
The AVAIL token powers the network—pay fees,… x.com/i/web/status/1…
— Avail (@AvailProject)
8:10 AM • Jul 23, 2024

Avail has launched its data availability mainnet and AVAIL token. Avail DA is a modular blockchain solution to optimize data availability and enable scalable, cost-efficient, and composable chains.

AVAIL token is used to pay DA fees and holders can start staking tokens from Tuesday.
Avail DA is the first of three parts of Avail’s full-stack architecture.
The next two major releases are the interoperability layer Nexus and the security network layer Fusion.

Other notable feature updates:

Syrup.fi goes live for public access.
Chromia launched its MVP mainnet.
Hermetica launched USDh on Runes.
Aevo launched basis trading vault strategy.
Uniswap wallet extension is open to the public.

QUICK BITES

GateIO exits Japan.
Avail launches main network.
Binance Labs invests in Catizen.
dYdX in talks of selling its v3 software.
Coinbase upgraded to buy from neutral by Citi.
BlackRock pitches for Ethena’s RWA investment plan.
Hamilton Lane launches private credit fund on Solana.
Riot Platforms acquires Block Mining in a $92.5M deal.
Mt. gox transfers $2.13B in BTC to an unknown address.
Telegram CEO touts Catizen earns $16M from in-app purchases.
Hex Trust receives in-principle MPI license approval in Singapore.
Revolut plans to sell $500M of employee shares at a $45B valuation.

NOTEWORTHY READS & MEME

Our Network’s read on stablecoins.
Decentralised’s read on layered Bitcoin.
Variant’s read on the future of DEX trading.

The Research Team is back! 🎤🫳
Unfortunately, the lawyers won’t let us post about meme coins this time
— Franklin Templeton Digital Assets (@FTI_DA)
6:36 PM • Jul 23, 2024

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.