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Wen ETH szn?
It’s hard being ETH right now.
It’s struggling to keep up against bitcoin — ETH is down 33% over the past year when compared to BTC — and it’s lagging behind the market over the past year too.
If you were to just boil ETH down to its ETFs, you’d see an incredibly different tale from the bitcoin ETFs, which not only kicked off the year but quickly smashed records. Ether ETFs, on the other hand, haven’t seen that type of market reception.
(I must caveat here that ETH is very different from BTC in a lot of ways, but for the purpose of the ETF talk, I needed to simplify the two.)
With ETH continuing to struggle, the question on my mind is simple: Where do we go from here?
K33 analyst David Zimmerman told me that he thinks ETH needs to see more positive inflows from the ETFs to kick it up a notch.
“This is not necessarily to say that institutional buying will drive up price alone, but rather that this would be necessary to shift ETH sentiment. ETF flows are now the major focus for ETH. ETH ETFs haven’t yet enjoyed the major inflows that BTC ETFs saw (even in relative terms). In my eyes, ETH is an institutional asset now, and the big guns need to show interest first if retail is to hop on board,” Zimmerman said.
Jordi Alexander, who joined the Empire podcast for an episode this week, laid out his bull and bear case for ETH.
“Ethereum is the place where it can be unleashed into DeFi and lending and all this stuff. And instead of focusing on its own monetary properties, it could try to get Bitcoin bridged in and then just use that you know, trillion of value to to unleash it. I do think that ETH has a chance at some monetary premium, though, and I think that Western countries that are more woke, environmentally friendly, they don’t want the mining,” he told Empire’s Jason Yanowitz.
“You remember, [Elon Musk] just dumped all his bitcoin because of the mining stuff… So, there could be a large contingent that wants Ethereum to be like a safer, cleaner form of digital native money. So that’s the bull case, and maybe it happens.”
The bear case, he added, is “just more dispersion.”
Speaking of bears, the sentiment on Crypto Twitter, as Yanowitz pointed out in Empire, is that Solana’s eating “ETH’s lunch.”
“I think that has been the story of this market for a while and I expect it to continue,” Zimmerman said.
“SOL has managed to solidify its place in crypto. I isolate ETH as an institutional asset in its own category, while I consider Solana the leading L1 from ‘the rest of the pack.’ I no longer really think in terms of ‘ETH killers’ or ‘ETH competitors.’ If anything, I am more focused on SOL competitors that can steal attention away from SOL, as SUI has done recently. If bullish momentum continues through Q4, I expect SUI to continue doing well, while the market will likely also rotate through to other L1 coins such as APT,” he continued.
SOL, SUI and APT are expected to outperform ETH in a bullish environment, but Zimmerman was careful to add that he still believes ETH can be a good allocation for some folks.
“Holding it comes with less risk than the rest, and chasing rotations through different L1s can also be tricky and stressful.”
But one comment from Alexander stuck with me. What should Vitalik Buterin’s role be?
Alexander suggested that ETH’s code needs to “speak for itself” which would mean that Buterin should somehow step aside (Alexander has two ideas for him: dissociate or retire).
Zimmerman, candidly, said he’s not sure what kind of role Buterin should take but he’s not sold on too much distance given that he does provide “real value” with his knowledge and overall technical expertise.
Putting Buterin aside, until we see more inflows to the ETFs, it’s going to be hard to make Zimmerman a bull.
Sorry folks, no ETH szn just yet.
— Katherine Ross
Data Center
- Ether’s up 1% over the past day, sitting around $2,635.
- Bitcoin hasn’t seen the same gains, up slightly to $63,763.
- EigenLayer’s EIGEN unlocked last night, trading around $3.82 as of Tuesday morning. It debuted at $6.51B FDV, per CoinDesk.
- Popcat, Fantom and Bonk lead the top gainers this morning, while TIA, JASMY and WLD are all in the red.
- Total stablecoin value is down over 2.2% to $171 billion over the last 30 days, though stablecoins notched an all-time high in August, per data from rwa.xyz.
The Works
- Jesse Pollak, creator of Base, said on X that he will also lead Coinbase’s Wallet team.
- Two senior Coin Center staff members, including executive director Jerry Brito, are set to depart after a decade at the DC-based advocacy group.
- The SEC won a summary judgment against Rivetz, having alleged that the crypto firm sold unregistered securities, according to CoinDesk.
- Robinhood’s European users can now transfer crypto in and out of its app, per CNBC.
- Metaplanet has bought another 107.91 BTC, per the publicly traded firm’s X account.
The Riff
Q: Permissionless kicks off in just over a week. What are you most excited about?
While I won’t be in Salt Lake City myself, here’s my list: Bitcoin DeFi, regulation/politics, and a smattering of vibes.
Maybe it’s the last one that interests me the most. Where are the vibes right now? Where does the wind point these days? Crypto often feels like an industry in search of direction. At least here in the US, so much (feels like it) hinges on the upcoming election season — for good or for worse, I don’t know.
Events like Permissionless are good for sticking your thumb in the air for a sense of the direction of things. And even though I won’t be physically present, I’m eager for such answers.
— Michael McSweeney
Honestly? The people. The panels are a close second, given the variety of topics that’ll be discussed.
Of course, I have to hype one of my own panels (yes, I’m biased here). NFTs: The Comeback, which’ll take place on Friday, October 11.
IMO, NFTs are in a really interesting spot right now given the sudden regulatory interest, but still an overall lackluster appetite. The panel includes Luca Netz of Pudgy Penguins, OpenSea’s Devin Finzer and Blur’s Pacman. It should be an interesting conversation, given the three unique perspectives on stage.
But the best part of crypto events hands down is getting to interact with folks who are building, innovating and eager to connect.
If you’re headed to SLC next week, say hi if you see a redhead wandering around the convention center.
— Katherine Ross
