Ethereum Hits $3K
GM friends.
Bitcoin might be stuck in the low $50Ks, but that’s not stopping Ethereum from reaching a two year ATH.
So brew up a fresh pot and get comfortable. Here comes your mid-week crypto update. ☕️📰
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Here’s what’s in today’s issue:
- David shares his thoughts on why Ethereum hit $3k, Bitcoin ETF updates, Saylor being bullish on Bitcoin, Aussies also being bullish on Bitcoin & Elizabeth Warren’s senate seat being challenged.
- Rekt Capital has the latest technical analysis for you on the market.
- Erik has an article on the Bitcoin Power Log Model.
- In case you missed it by Rebecca.
Ethereum Hits $3K
On Tuesday, ETH sliced above $3K and touched $3,032. This marked Ethereum’s highest price since May of 2022 as it has increased 18% over the past 30 days.
Other than the fact that bitcoin has been pumping, there are two reasons for Ethereum’s current strength: potential US spot ETH ETF approvals and the upcoming Dencun upgrade.
So let’s discuss both.
Bernstein Gives 50% Chance of Approvals in May
A new report published Monday from analysts at Bernstein says that there’s a 50% chance the SEC will approve the US spot Ethereum ETFs in May.
Currently, there are eight applications under consideration by the SEC. The applicants are the same players that have spot Bitcoin ETFs, including BlackRock, Fidelity, Grayscale, and Ark Invest.
And while Berstein thinks approvals this May are up to a coin toss, they further iterated that approvals within the next twelve months are a near certainty.
Obviously, spot ETH ETF approvals would open the floodgates to institutional and TradFi investors. But Bernstein made a few other interesting points:
- Bernstein thinks Ethereum will be the only other crypto asset besides bitcoin to receive spot ETF approvals.
- They believe Ethereum is primed for mainstream adoption given its staking yield, low carbon emissions, and smart contract / DeFi infrastructure.
- Bernstein says the ETFs could include staking yields built into the products themselves. Presumably, this would mean the ETF issuers would stake some of the spot ETH for yield, and return the gains back to investors.
Dencun Upgrade Set for March
Ethereum’s Dencun upgrade is coming in March, and it’s expected to significantly reduce network transaction fees. Some analysts think that fees could get cut by 50% to 90% from the upgrade.
Technically, Dencun will introduce “Proto-danksharding” to the network. Proto-danksharding gives dedicated space in the network for rollups, which then allows those rollups to add data to the blockchain for a cheaper price.
Bitcoin ETFs Hit Largest Volume since Launch
On Tuesday, the US spot bitcoin ETFs (excluding Grayscale) hit the largest combined trading volume since Day 1 of the launches.
Specifically, the ETFs hit $2 billion in trading volume on Tuesday. Day 1 trading volumes were around $2.4 billion.
Unusually high trading volumes came from Bitwise, VanEck, and WisdomTree. Bitwise had 6.3 million shares traded ($179M), VanEck saw 6.8 million shares traded ($400M), and WisdomTree hit 4 million shares traded ($200M).
On Tuesday, total net inflows for all the ETFs, including Grayscale, came in at $135 million. This positive number, combined with the huge trading volumes, indicates strengthening price support at the low $50Ks.
It’s also worth noting that last week’s total net inflows came in at $2.2 billion. That means last week’s numbers were 2X from the week prior, and the highest weekly net inflows since ETF inception.
Saylor: “Bitcoin is the Exit Strategy”
Michael Saylor was interviewed by Bloomberg Television on Tuesday.
The reporter noted that Microstrategy’s BTC paper profits currently sit at $4 billion, and then asked if at any point Saylor would take profits. Here’s what he said:
“Well I’ve famously said I’m going to be buying the top forever. Bitcoin is the exit strategy. It is the strongest asset.”
Saylor then elaborated saying that bitcoin is now directly competing against gold, real estate, and the S&P index as a store of value. But because bitcoin is 10X to 100X smaller than those asset classes, and is “technically superior” to them, Saylor believes that capital will keep flowing out of gold, real estate, and the S&P, and into bitcoin.
Additionally, Saylor noted that Microstrategy uses a levered operating strategy for buying bitcoin. This was a reference to last week’s announcement that MicroStrategy is pivoting to be a “bitcoin development company” and wants to compete directly against the US spot bitcoin ETFs for TradFi investors.
Survey Says Aussies More Open to Bitcoin
A new survey from the Independent Reserve Cryptocurrency Index says that a significant portion of Australians now have more favorable views about bitcoin.
The survey asked 2,100 Australians how they perceived bitcoin both before and after the US spot bitcoin ETF approvals.
Overall, it found that positive sentiments for bitcoin increased by 25% post approvals. Notably sentiment for individuals 55 and above increased by 100%.
The survey went on to say that 19% of respondents would invest in an Australian spot bitcoin ETF if one were to be made available, with the highest percentages coming from the 25 to 44 year old range.
Elizabeth Warren’s Senate Seat Challenged by Crypto Supporter John Deaton
HODLERS, it’s time to rally the Anti-Anti-Crypto Army behind John Deaton. That’s because Mr. Deaton is challenging Warren for her Senate seat, and the man is pro-crypto.
Deaton made the official announcement Tuesday morning that he’s running against Warren. The election is set for this November.
Formerly a U.S. Marine judge advocate and asbestos lawyer, Deaton gained prominence with the crypto community in 2022 when he represented a group of XRP holders in the SEC’s lawsuit against Ripple. And apparently, the man moved from Rhode Island to Massachusetts for the purpose of challenging Warren.
Elizabeth Warren, who describes herself as the leader of an anti-crypto army, has already begun sending out emails to supporters asking for campaign contributions. In her emails, she’s describing Deaton’s candidacy as an attack from “powerful special interests, Wall Street, and the GOP.”
Mode is a new layer two on Ethereum and received a big grant from Arbitrum.
- Step 1: Sign Up
- Step 2: Bridge some ETH
- Step 3: Use dapps on Mode (you will find them on the Mode website)
*note using new networks can be risky, please understand the risks.
In today’s edition of the Rekt Capital Newsletter, the following cryptocurrencies will be analysed & discussed:
- VeChain (VET)
- Ethereum (ETH)
- Tron (TRX)
- UniSwap (UNI)
- Theta Token (THETA)
- Coti (COTI)
- Chiliz (CHZ)
VeChain — VET/USDT
Over the past few weeks, we’ve been discussing VeChain’s price action in a lot of detail.
In fact, VET has become a frequent feature here in the Rekt Capital Newsletter and with good reason as we’ll soon find out.
Because in late January, VET revisited the Range Low of its current range (black-blue):
The green area was in general the support region that VET was trying to reaffirm stability at; the goal was to retest the Range Low as support.
VET managed to do just that by mid-February:
But it has been over the past week or so that VET has produced the most gains as a result of its successful retest of the Range Low as new support:
Because VET has rallied +105% to the upside since the retest, breaking out from the range and even revisiting the orange resistance area above.
Despite cancelling out some of the gains since the rejection at the orange resistance, still VET is up +70% since the Range Low retest.
And since VET has broken out from the macro range, it is possible price is pulling back for a post-breakout retest of the Range High into new support.
Price could indeed follow the green path, but technically VET could produce a volatile retest into the light blue area:
After all, this general light blue area figured as support in earlier 2021 (green circle), resistance in late 2023 (red circle), and possibly new support in 2024 (green circle):
So while the Range High is awaiting a retest, any downside volatility in and around the light blue area are fair game.
Ethereum — ETH/USD
A few weeks ago, we spoke about how ETH would likely repeat its January move to the upside across its macro range (red-red):
Here is today’s update:
ETH followed its path to completed and then some for a +28% move to the upside.
In fact, ETH is on the cusp of making history as this is technically only the second time that price is printing a full bodied Monthly candle beyond the $2791 Range High resistance in a new Bull Market.
As a result, if ETH Monthly Closes above the red $2791 level, it could technically set price up for a retest of said level, very similarly to what happened in mid-2021, (though ultimately depending on how high that Monthly Close will be).
However, Monthly Close below the Range High and ETH could sentence itself to further consolidation within its current macro range.
CLICK HERE to go Premium and read the rest of this week’s Market Analysis – Premium subs can read Rekt capital’s full report.
The Bitcoin Power Law Model
The Bitcoin Power Law model isn’t new but has gained renewed attention in recent months.
It has been holding up well and is easy to use. Contrary to common log-linear plots, the Bitcoin Power Law utilizes logarithmic scales on both the x-axis and y-axis.
This way of plotting strips away day-to-day volatility and reveals an interesting relation between price increase and time increase.
TO READ THE REST OF THIS ARTICLE, CLICK HERE – “The Bitcoin Power Law Model”
Crypto Market News
- Genesis has been granted permission to sell over $1.3 billion worth of GBTC shares. Source
- Spot Ethereum ETFs have a 50% chance of being approved in May according to Bitwise, Grayscale and Galaxy. Source
- Japan’s financial regulator has proposed new measures to screen crypto transactions to protect users against illegal activities. Source
- Gold ETFs have seen $2.4 billion in outflows so far in 2024 as Bitcoin ETFs hit record volumes. Source
- Crypto money laundering dropped by 30% in 2023 down to $22.2 billion from $31.5 billion in 2022. Source
- Coinbase has been upgraded to neutral from underweight by JP Morgan. Source
- Coinbase has beaten its Q4 earnings estimate as transaction revenue increased to $529M. Source
- Ark Invest has sold $90M in COIN shares on the news that Coinbase beat its Q4 earnings. Source
- Coinbase Commerce has removed support for native Bitcoin payments and other UTXO coins. Source
- Kraken reportedly is mandating that UK users verify self-custodial wallets in compliance with regulations. Source
- Revolut is testing a beta version of its crypto exchange targeted at advanced traders. Source
- Ethiopia’s government has signed a $250M Bitcoin mining and AI training deal. Source
- VanEck’s spot Bitcoin ETF volume has jumped 1,000% the day before it’s due to drop its fee. Source
- Bitcoin ETFs have seen a record $2.4 billion in inflows in the past week with BlackRock’s IBIT leading the way. Source
- Sports Illustrated is moving its NFT ticketing platform from Polygon to Avalanche almost 10 months after launching. Source
Coins and Projects
- Bitcoin has hit $1 trillion in market cap after Bitcoin’s price surpassed $51K. Source
- Bitcoin call options from April to December are favoring a price of $60-80K. Source
- Bitcoin holdings on Coinbase have reached the lowest level since 2015 after Whales withdrew $1 billion. Source
- Bitcoin forks like Bitcoin Cash are down up to 70% against Bitcoin since its all-time high in November 2021. Source
- Bitcoin’s hash rate could drop by 20% after the halving according to Galaxy Digital. Source
- Tron founder Justin Sun has unveiled plans for a Bitcoin Layer-2 solution. Source
- The total amount of staked ETH is now worth over $85 billion, with almost 25% of the circulating supply locked up. Source
- Uniswap’s founder has warned the community about a scam using wallet addresses as Ethereum Name Service domains. Source
- Uniswap has announced it plans to launch its V4 in Q3 following the confirmation of Ethereum’s Dencun upgrade. Source
- AltLayer has raised $14.4M in a strategic round co-led by Polychain Capital and Hack VC. Source
- Starknet’s STRK token has started trading after its airdrop launched to almost 1.3 million wallets. Source
- Solana’s SOL futures have reached a record $1 billion in bullish bets. Source
- Solana’s BONK token is set to be listed by Revolut and will distribute $1.2M tokens as part of its Learn campaign. Source
- Moonbeam has partnered with Web3 game developer, Animo, to bring Stars Arena to PlayStation. Source
- Pyth Network has launched price feeds for 13 Bitcoin ETFs so that developers can access real-time data. Source
- Aptos Labs has launched a passwordless passkey authentication method for signing transactions. Source
- Chainlink has partnered with Telefonica to help prevent SIM swap attacks. Source
- A fake Curve Finance app has been listed on the Apple app store. Source
- Worldcoin has hit 1 million daily users causing its WLD token to skyrocket more than 140% in the past week. Source
Macro News
- Crypto lawyer John Deaton is running for US Senator against Elizabeth Warren in Massachusetts. Source
- The UK is in a recession after the economy shrank in Q3 and Q4 of 2023. Source
- The UK could pass its stablecoin and staking laws within 6 months. Source
- Japan is in a recession and Germany overtakes as the world’s 3rd largest economy. Source
- The BRICs countries will make more millionaires than G7 nations in the next 10 years. Source
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