#TradeFi革命

Three Positive Factors in the Altcoin Market

Currently, many investors are nearly despairing over the altcoin market, but the most pessimistic times may signal that a turning point is about to come. Some positive factors have already emerged in the altcoin market, and there is no need to be overly pessimistic.

1. Ethereum ETF Introducing Staking is on the Agenda

In the past few days, Grayscale and 21Shares have submitted applications to the U.S. SEC to allow their Ethereum ETFs to stake the ETH they hold. Giants like BlackRock and Fidelity are expected to follow suit soon.

The risk-free staking yield of over 3% for Ethereum is still very attractive to old money. Once the staking feature is approved, the appeal of Ethereum ETFs will significantly increase, and buying pressure from the ETFs will drive Ethereum prices up strongly.

Ethereum has a high correlation with the altcoin market, and once Ethereum starts to rise, it will lead to an upward trend in altcoins.

2. FTX Compensation Funds are About to Enter

The first batch of FTX compensation has already begun, with a total amount expected to be between $7 billion and $8 billion, primarily distributed in stablecoins.

On one hand, FTX users generally have a high risk appetite, while on the other hand, altcoins are currently at a low level, making them more cost-effective from a risk-reward perspective. Therefore, a considerable portion of the compensation funds will flow into the altcoin market.

3. Altcoin ETFs are Getting Closer

Recently, the SEC accepted the application for a spot ETF for LTC, and in the past few days, it has also accepted the applications for spot ETFs for XRP, DOGE, and SOL. The market is generally optimistic about the approval of this altcoin ETF, especially the LTC spot ETF, which faces virtually no obstacles.

This means that the U.S. altcoin market is about to welcome a clearer regulatory environment. This will play a significant positive role in restoring market confidence.

4. Improvement in Funding Conditions

TGA has already started to decrease, and it may inject around $600 billion into the market between mid-February and early April; in addition, the Fed's RRP balance has dropped from a peak of $2.5537 trillion to $77.8 billion, gradually approaching zero, which is also close to the conditions for the Fed to stop balance sheet reduction. Stopping balance sheet reduction does not seem far away.