Key Points:
- Valkyrie joins Ethereum ETF race, aiming for combined ETH and BTC ETF.
- Ethereum’s sentiment improves amidst price decline and network growth slowdown.
- NFT market turbulence adds to Ethereum’s ongoing challenges.
The Ethereum ETF competition takes an intriguing turn as Valkyrie becomes the 14th firm to apply for an Ethereum ETF. Despite the improving sentiment around Ethereum, its price continues to face challenges. This article delves into Valkyrie’s entry, the changing dynamics of the Ethereum ETF landscape, and the concurrent struggles faced by the cryptocurrency.
Valkyrie’s Multi-Asset ETF Application
Valkyrie’s move to apply for a combined Ethereum (ETH) and Bitcoin (BTC) ETF marks a significant addition to the race. In a recent development, the firm submitted a 497-form outlining their intention to transform their existing Bitcoin ETF into an ETF that encompasses both Bitcoin and Ether. What sets Valkyrie apart is their projected launch date of October 3, putting them ahead of the other 13 applicants.
Ethereum’s Dual Scenario: Improving Sentiment and Price Decline
As large institutions like Blackrock gain attention with their Bitcoin ETF applications, Ethereum-based ETF applications have also garnered interest. This influx of applicants seeking to establish Ethereum ETFs could potentially contribute to a more positive sentiment surrounding Ethereum. However, the past month has witnessed a decline in ETH’s price, reaching $1834.5. This divergence between sentiment and price raises questions about the cryptocurrency’s market dynamics.
Friday, the 13th (Ether Futures ETF was filed) https://t.co/nr9FPlUQD9
— Eric Balchunas (@EricBalchunas) August 4, 2023
Challenging Months for Ethereum
Simultaneously, Ethereum faces challenges beyond its ETF aspirations. Network growth has faltered, signaling a decreased interest in new addresses engaging with the cryptocurrency. This trend is accentuated by the declining velocity of ETH, indicative of reduced exchange activity among addresses over the last month. Additionally, the MVRV ratio for ETH has fallen, suggesting that most holding addresses are not profitable, impacting the incentive to sell holdings.
NFT Turbulence and Market Volume
The Ethereum NFT market‘s state also reflects ongoing challenges. Recent data indicates a phase of turbulence characterized by a significant decrease in both activity and volume. Transaction volume across all Ethereum marketplaces has reached its lowest point since November 2022, raising questions about the broader health of the NFT ecosystem on the Ethereum network.
Conclusion: Valkyrie’s entry into the Ethereum ETF race adds an exciting dynamic to an already competitive landscape. Despite the growing interest in Ethereum-based ETFs, the cryptocurrency’s price struggles, network challenges, and the state of its NFT market have highlighted complexities within the ecosystem. As the Ethereum ETF race continues, the industry will be closely watching the interplay between institutional interest, market sentiment, and the cryptocurrency’s fundamental health.
