Under the pseudonym Luxon, a macroeconomist shares insights that echo sentiments expressed by journalist Colin Wu. Luxon suggests that American investment giants may allocate 1-3% of their assets under management (AUM) into Bitcoin (BTC). This shift is attributed to the Federal Reserve’s decision to postpone its rate reduction from May to June or later, coupled with a gradual adoption of institutional plans to invest in BTC.
Acknowledging the underestimated enthusiasm for spot Bitcoin ETFs, Luxon notes an impending all-time high update before the anticipated halving next month. This surge is deemed “surprising” amidst a backdrop of tight monetary policy and the delayed commencement of easing measures.
Furthermore, Luxon predicts Bitcoin’s continued dominance in the cryptocurrency market, citing skepticism towards the SEC‘s approval of an Ethereum ETF. The macroeconomist recalls the regulatory scrutiny surrounding Ethereum’s proof-of-stake (PoS) mechanism, particularly concerning security and price manipulation concerns. Additionally, obstacles may arise from the SEC’s interpretation of assets as securities.
Luxon underscores the rotation of capital from Ethereum to Polygon and Solana in the absence of ETFs for the former, alongside a notable increase in developer activity for the latter.
In related developments, Bloomberg ETF analysts have revised down the likelihood of spot Ethereum ETF approval in May to 35%, with no definitive prediction regarding when approval for ETH ETFs may materialize.
