Ethereum ETFs Approval
After a prolonged wait, U.S. regulators have approved eight issuers of spot Ethereum (ETH) exchange-traded funds (ETFs). The approved issuers include BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. These firms had to adjust their 19b-4 filings to remove staking from their products. The next step requires the issuers to get their S-1 registrations approved, a process expected to take several weeks to months.
Daniel Yan, co-founder of Matrixport, suggested that this approval could pave the way for a Solana ETF. Bloomberg ETF analyst James Seyffart echoed this sentiment, predicting high demand for a Solana ETF. Additionally, a bipartisan group of U.S. lawmakers has urged SEC Chair Gary Gensler to approve the pending spot Ethereum ETF filings. QCP Capital forecasts that such approval could drive Ethereum prices up by 60% to $6,000.
Some experts argue that while the decision might clarify Ethereum’s regulatory status as a non-security, it could make ETH tokens held in funds less productive compared to their use in staking or powering smart contracts. Standard Chartered’s Crypto Research Head Geoffrey Kendrick suggested that XRP and Solana could be next in line for ETF products following Ethereum.
Bitcoin Reclaims $71,000
The crypto market experienced a resurgence last week, with Bitcoin (BTC) spiking to a one-month high of $71,500 on May 20. This marked the first time in six weeks that Bitcoin surpassed the $70,000 and $71,000 thresholds. The rally also saw a broader market upswing, with multiple altcoins experiencing similar price increases. The total value locked (TVL) in decentralized finance (DeFi) hit a two-year high of $105.6 billion.
Spot Bitcoin ETFs recorded significant inflows, totaling $1.056 billion last week, with the largest intraday influx being $305 million on May 21. Analysts cited these inflows and bullish sentiments surrounding the anticipated approval of spot Ethereum ETFs as major catalysts for the rally. Ethereum posted its largest intraday gain of 19% on May 20. Analysts project that the approval of spot Ethereum ETFs could propel Ethereum to a new all-time high of $5,000.
FIT21 Bill and Other Legislative Developments
The U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) bill, aimed at ensuring regulatory clarity for the crypto industry. Despite SEC Chair Gary Gensler’s condemnation of the bill and the Biden administration’s concerns about consumer protection, the House voted overwhelmingly in favor. The bill will now move to the Senate for further consideration.
In related news, the House passed a bill prohibiting the Federal Reserve from creating a dollar-backed Central Bank Digital Currency (CBDC). Republican presidential candidate Donald Trump has started accepting cryptocurrency donations, aiming to garner support from the crypto community.
Other Highlights
Spot Bitcoin ETFs: Continued to attract significant inflows, with a notable $1.056 billion capital inflow last week.
WisdomTree’s Crypto ETPs: The London Stock Exchange approved WisdomTree’s launch of crypto ETPs backed by Bitcoin and Ethereum.
Pepe (PEPE): Secured a new all-time high for the second consecutive week, with its price reaching $0.00001577 on May 25.
Coinbase and XRP: Coinbase resumed XRP trading in New York following discussions with authorities.
Uniswap: Responded to the SEC’s Wells Notice, affirming its readiness to fight potential litigation.
Bitcoin Pizza Day: Celebrated on May 22, marking the first real-world Bitcoin transaction. However, Coinbase faced backlash for only allowing USDC payments for pizza sales.
Passing of Kabosu: The Shiba Inu dog that inspired Dogecoin passed away on May 24, leading to mourning within the crypto community.
Fundraising and Legal Developments
Between May 19 and May 25, blockchain startups announced over $258 million in fundraising. Farcaster’s $150 million Series A round was the largest. Jian Wen was sentenced to six years and eight months for her role in a Bitcoin money laundering scheme. Phantom Wallet surged in popularity, surpassing Facebook in Google Play rankings.
