Weekly Beluga Insights

After lots of drama around the upcoming US election we’ve seen Donald Trump emerge as a major proponent for crypto, which has driven over $4M in crypto-based donations made to his campaign since they began accepting digital currency a few weeks ago. While he might not really know how blockchain works or what Bitcoin really is, it’s a really encouraging shift to see top politicians working to improve regulatory clarity around the crypto industry. Further showing his support he will also be speaking this Saturday at the Bitcoin 2024 conference in Nashville, along with a number of other prominent politicians mostly from the Republican side of the aisle.

We are now 3 days into the launch of the Ethereum ETF, and while we’ve seen massive trading volume with over $1B across the first two days each, the price action has been anything but positive. Ethereum has now retreated back to $3,200, where it was before the ETF was approved, which while not necessarily surprising is not fun to see. This likely has to do with Grayscale unloading billions of dollars worth of Ethereum from their ETHE trust with over $450M sold on the first day and about $350M in outflows on Thursday.

The good news is, ETHE has already depleted about 20% of its Assets Under Management (AUM) in the 3 days the ETFs have been trading, and as their selling slows down we will feel the impact of the massive volumes we’ve been seeing much more. If we look at what what happened when the Bitcoin ETFs started trading, we saw BTC dump for the first two weeks before a massive rally happened, taking it up about 90% in only two months. If the same were to happen for Ethereum from this current price range, it would be over $6,000.

Major Movers of the Week

Public Trading Wallet Update

As I’ve talked about in previous editions of the newsletter, with the Ethereum ETF finally launching I’ve been looking to allocate to Ethereum itself as well as coins that benefit from Ethereum doing well. One of these coins is the ETH Layer 2 network Arbitrum (ARB), which since its launch a little over a year ago has trended mostly down. Given Arbitrum remains the 5th largest chain by TVL and takes nearly half of all assets bridged to Ethereum L2’s, I think it’s extremely oversold.

Arbitrum price action has also been tied to the relatively poor price action of Ethereum, which if I’m right about how the ETF flows will go, should be reversing to the positive side over the next couple weeks. We’re still sitting on about $25,000 of USDC in the trading wallet, some of which I plan to use to DCA into Arbitrum in the coming days. I’ll be watching ETF inflows to make sure they continue to track with my market thesis, and of course will be updating our readers every single week with insights and analyses.

Quick Quips: Catch Up on What You Missed

• Trump to Speak at Bitcoin 2024 on Saturday

• Helium Mobile Subscriber Count Tops 100,000

• Ryan Selkis Resigns as CEO of Messari After Controversial Statements

• ETH ETFs see over $100M in Inflows on Day 1

• NPC Labs Raises $18M to Scale Gaming on Base

Tweet of the Week

Michael Saylor is in Wartime mode.

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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 McKinnon 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