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Recently, the Bitcoin spot ETF that the market has been looking forward to for several years has finally been approved. Domestic and foreign media have used eye-catching words such as "milestone", "historical", and "heavy official announcement" to describe the sensation of this event. However, the crypto market after learning about it performed mediocrely, and even began to fall two days later. This made many people confused. Is the approval of the Bitcoin ETF a good thing or a bad thing? What are the substantive effects in the short and long term? Today, let's analyze the changes that need to be known after the approval of the Bitcoin ETF one by one...
Beware of Grayscale GBTC conversion to ETF
Among the 11 approved spot ETFs, most of them are just entering the market and are in a net buying state, while Grayscale's GBTC is definitely a counterexample. This is because the Grayscale GBTC Trust has been in a negative premium for a long time in the past. Some investors have been holding more than 600,000 positions for quite a long time. After a round of bear market, it is understandable that many people choose to take profits. Therefore, we will see short-term capital outflows from GBTC, and the amount is not small.
But for now, fortunately, the inflows of other spot ETFs far exceed the outflows of the "traitor" GBTC. Eric Balchunas, an ETF analyst at Bloomberg, wrote on the X platform that in the two days since the Bitcoin spot ETF was listed, nine issuers have absorbed $1.4 billion in funds, exceeding GBTC's outflow of $579 million, with a total net inflow of $819 million.
Translation: So far, Nine Newborns has attracted $1.4 billion in new funds, far exceeding GBTC's $579 million outflow, with net inflows reaching $819 million. Currently, IBIT leads the others with $5 billion, while Fidelity is close behind. Newborns' trading volume reached $3.6 billion, involving 500,000 individual transactions (total trading volume including GBTC is 1.2 million), which is an impressive performance, with an average premium rate of 20 basis points.
Ethereum ETF Expectations
Regarding the sudden rise in Ethereum's market before and after the approval of Bitcoin ETF, many people explained that funds began to pay attention to the next Ethereum spot ETF that has been applied for and is about to be approved. These funds include funds that have already realized profits and those that did not get on board with the expected market of Bitcoin ETF in this round. They hope to "get a piece of the pie" through the expected market brought by Ethereum ETF.
This type of strategy is very common. When a positive asset is realized, the short-term expectation of similar assets will rise immediately. So how long can the Ethereum ETF be expected to last? The Ethereum ETF that BlackRock applied for will get a response in May at the latest. Will it be delayed like Bitcoin by then?
At present, the US SEC's attitude towards crypto assets such as Ethereum is that it currently regards Ethereum as a vague area between commodities and securities. In other words, it has neither accurately positioned Ethereum as a commodity like Bitcoin, nor has it completely determined that Ethereum is a security. Previously, the SEC almost made it clear that Ethereum is not a security, but this was mainly due to the new changes caused by Ethereum's switch from the POW consensus mechanism to the POS consensus mechanism.
In addition, for Ethereum ETF to be approved, it needs to be not easily controlled by certain institutions like Bitcoin, which is a relatively strict condition. The reason why Bitcoin ETF can be approved is that the share of the world's largest trading platform has decreased, and the other is that there are too many institutions (capital) applying for ETF. If it is not approved again, it may lead to lawsuits.
In general, fortunately, there are still a few months before the Ethereum ETF, which is enough time for Ethereum to gain market attention. There is no need to worry too much about the negative impact of failure or postponement, but the probability of approval may not be high.
The main variables are whether the US SEC has a more sufficient understanding and confidence in the POS version of Ethereum, and whether the external pressure from large financial institutions driven by the interests of various investors can be in place. This depends on whether the Bitcoin spot ETF can operate stably. If the overall performance of the crypto market is good and brings strong interest from global investors, capital, driven by interests, will be happy to promote the passage of the Ethereum spot ETF.
The passage of the Bitcoin ETF is not the end of the good news, but a milestone. It brings a lot of changes and impacts, and we should treat it rationally. Both the Bitcoin ecosystem and the Ethereum ecosystem are one of the main narratives of the future crypto industry. What is certain is that in 2024, we will see crypto assets grow at a speed visible to the naked eye.
How can ordinary people participate in the primary market?
Primary market resources are relatively closed, and it is difficult for ordinary retail investors to access first-hand channels. Unless there are institutional resources around to follow up and obtain a batch of quotas, or can directly connect with the project party to participate, but both costs are high. If you take 1-3wU to talk to the project party about investment, do you think they will pay attention to you?
The amount they get in a round of financing is usually as low as eight figures, and as high as nine figures, so many ordinary retail investors simply cannot get first-hand resources.
Below we will introduce the projects that are being launched in our community primary market.
StoryProtocol
StoryProtocol is a forward-thinking project that aims to redefine how intellectual property is managed and owned in the digital age. The initiative aims to address the challenges surrounding intellectual property, content creators and the complexity of inclusive digital ecosystems.
Story Protocol has built a simplified framework to fully manage the intellectual property development lifecycle, with features such as provenance tracking, seamless licensing and revenue sharing. For creators of all types of media (such as prose, images, games, audio, etc.), applications based on Story Protocol can help writers and artists clarify the provenance of their works and allow anyone to contribute and remix while maintaining the value of the works and their contributions.
Story Protocol aims to work with third-party developers to build a rich ecosystem that provides services such as crowdfunding, capital formation, IP discovery, licensing modules, AI content certification, and community development. By adopting an open modular architecture, any application can be connected to each other, eliminating the platform risk for ecosystem developers.
Story Protocol
Project name: Story Protocol
Section: On-chain IP protocol Basic section
Total circulation: 1 billion (small circulation)
Launch time: Q1 2024 (no lock-up)
