Weekly Beluga Insights

Exciting times for crypto as the spot Ethereum ETF has been approved by the SEC! I’ll be honest, even as one of the biggest Ethereum bulls out there I did not see this coming, and it’s clear that nobody else did either from the chart. In fact, after Bloomberg ETF analysts Tweeted earlier this week that they were raising their approval predictions, ETH printed its largest single daily candle in terms of USD ever. To give a better idea of just how large this candle was, the increase in market cap in that one movement is larger than the entire market cap of Solana. Everyone was caught off guard by this change in signaling from the powers that be which has led to a total frenzy of price action.

We now know it is officially approved, however we still have a wait period before ETFs are able to be traded. In the case of the Bitcoin ETFs this took about 2 weeks, however experts have said it could even be months. Of course now that the ETH ETF has been approved the conversation has already shifted to what might be the next in line from our existing tokens. A popular name among traders is Solana, however it’s my belief that Solana is far too small to be able to support a market the size of what a spot ETF would demand in addition to things such as the chain’s unreliability, decentralization concerns, and the fact it remains explicitly as a security in the eyes of the SEC. Hard to argue with the community supporting Solana though, as they are one of the most vocal by far which may end up having an impact.

In fact, I actually think this is likely the last ETF we’ll have for some time (at least a year). Let the traditional markets digest their new access to these coins while Solana and others continue to build and cement their places among the upper echelon of crypto. The reality is nothing is really close to ETH much less BTC in terms of market cap, so it’s hard to justify a fast track on ETFs for those smaller assets. If I had to take a guess, I would say it’s more likely we get an ETF for something random like Dogecoin which is clearly not a security and has been around for many years (achieved lindy).

Major Movers of the Week

• Pendle (PENDLE) +51.84%

• Bonk (BONK) +41.94%

• Pepe (PEPE) +39.02%

• Ethereum (ETH) +28.63%

• Arweave (AR) -10.04%

What We’re Watching

I’ll admit I did not have any idea we’d be getting the ETF approval this week when I said the rotation to ETH had begun in the newsletter 2 weeks ago, but it’s better to be lucky than good right? At time of writing Ethereum has now shot over $3,800 after a hugely volatile day with the approval news. With ETH finally catching up I think it’s time for alt season to begin just as we’ve seen in previous cycles, so let’s take a look at one of my top choices in the Ethereum ecosystem: Arbitrum.

Arbitrum as a chain launched back in 2021 and over time came to be one of the prime choices for DeFi applications and users alike. Platforms like GMX rose to the top and drew liquidity from other chains, making Arbitrum one of the largest chains on the market by TVL. 2 years later in 2023, in the depths of the bear market, they finally released their token with an airdrop worth over $1B to past users.

Despite this shockingly high dollar value, with a launch in such poor market conditions Arbitrum’s token price has stayed relatively flat, largely trading in the same range since its release. Since its success is tied so closely to the price of ETH, it saw a 20% pop when Ethereum itself did earlier this week due to the ETF news. When you see strength like that in a token after a big move in the majors, it’s usually a sign that you know where market attention is. Additionally, Arbitrum has performed pretty poorly over the last few months giving us what looks like a very nice entry.

Using the Beluga Public Trading Wallet I began Dollar Cost Averaging into an Arbitrum position at a price of $1.03 2 weeks ago, and will continue to accumulate over the following weeks. Launch of ETH ETF trading will be a massive catalyst for Arbitrum as well, so that’s the event we should be looking towards for a big move hopefully in the next few weeks.

Quick Quips: Catch Up on What You Missed

• SEC Greenlights the Ethereum ETFs in Epic Plot Twist

• House Votes to Ban the Federal Reserve From Creating CBDC

• RWA-focused Layer 2 Plume Raises $10M

• Dog Behind Doge Coin Kabosu Passes Away

• House Passes FIT21 Bill Taking Power Over Crypto Away from SEC

Tweet of the Week

To celebrate the approval, ETF issuer VanEck dropped another banger:

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Disclaimer

The content on this site is for informational purposes only and should not be construed as investment advice. While Beluga strives to ensure the accuracy and timeliness of information, there may be discrepancies when comparing our data to that of financial institutions, service providers, or specific product websites. Always consult with a professional before making any financial decisions.

Will is the Head of Content for Beluga and has spent every day for many years trading coins. For that reason there are too many to name, however his largest holdings by a significant margin are Ethereum and Bitcoin. NFA DYOR