KEYTAKEAWAYS
- Ethereum spot ETFs are close to approval, with potential launches within weeks. Gemini predicts up to $5 billion in net inflows over six months.
- The ETH/BTC ratio is near multi-year lows. A return to past median levels could trigger a 20% rise in ETH price.
- Key Ethereum ecosystem projects to watch include Layer 2, LSD protocols, DeFi applications, ETH-collateralized stablecoins, and re-staking platforms, despite recent price declines.
CONTENT
Explore the imminent approval of Ethereum spot ETFs, potential price impacts, and key ecosystem projects to watch. Learn about Layer 2, LSD, DeFi, stablecoins, and re-staking in the Ethereum ecosystem.
EXPERTS PREDICT MARKET SURGE AFTER ETH ETFs’ LAUNCHED
After the U.S. Securities and Exchange Commission (SEC) approved the 19b-4 exchange rule change documents for 8 Ethereum spot ETFs in May, various issuers have successively submitted updated S-1 registration application documents. Once the SEC approves, Ethereum spot ETFs will be open for listing and trading.
Regarding the latest progress, Nate Geraci, President of The ETF Store, stated on 8th July that the deadline for submitting revised S-1 applications was on the 8th. It’s not clear how quickly the SEC will process them, but he is optimistic that Ethereum spot ETFs could be launched within the next week or two.
Bloomberg analyst James Seyffart previously estimated that Ethereum spot ETFs might be listed later this week or during the week of July 15th.
In its latest research report, Gemini estimated that once the U.S. approves Ethereum spot ETFs, net inflows could reach up to $5 billion in the first 6 months. Currently, the ETH/BTC ratio is near multi-year lows, and strong capital inflows could trigger a catch-up rally. If the ETH/BTC ratio returns to the median of the past 3 years, ETH could rise by nearly 20%. If it reaches the maximum value of 0.087, it could potentially rise by 55%.
WHICH ETH ECOSYSTEM PROJECTS ARE WORTH WATCHING?
After the successful approval of Ethereum spot ETFs, if funds continue to flow in, Ethereum ecosystem projects are expected to benefit. Therefore, it’s worth focusing on the largest areas and projects in the Ethereum ecosystem. The following is a review for readers.
Although most projects are currently experiencing significant price declines, readers can still spend some time researching related projects. Also please note that the following project introductions are for reference only and do not constitute investment advice.
1. Layer 2
Layer 2 aims to handle the prosperity of the ETH ecosystem with high TPS and low GAS, and its importance is self-evident. Major projects include MATIC, MNT, ARB, STX, IMX, OP, STRK, ZK, AEVO, MANTA, BLAST, etc. Coingecko data shows that Layer 2 ecosystem tokens have fallen between 25% and 50% in the last 30 days.
Layer2 Tokens’ Performance
(Source: CoinGecko)
2. LSD
LSD protocols are node-related staking services that emerged after ETH transitioned from POW to POS. Major projects include LDO, SSV, RPL, FXS, etc. Coingecko data shows that LSD ecosystem tokens have fallen between 25% and 50% in the last 30 days.
LSD Tokens’ Performance
(Source: CoinGecko)
3. DeFi
DeFi applications cover multiple aspects including DEX, lending, stablecoin trading, stablecoin issuance, etc. Major projects include Pendle, UNI, AAVE, COMP, CRV, MKR, etc. Coingecko data shows that DeFi ecosystem tokens have fallen between 15% and 40% in the last 30 days.
DeFi Token’s Performance
(Source: CoinGecko)
4. ETH-collateralized Stablecoin Protocols
There are multiple ways to issue stablecoins, one of which is through collateralized assets. The largest collateralized asset includes ETH. With LSD and re-staking, project teams use collateralized ETH to obtain liquidity yields, giving stablecoins a natural interest rate. Major projects include ENA, LBR, etc. However, ENA has fallen by as much as 60% in the last 30 days.
ENA Performance
(Source: CoinGecko)
5. Restaking
Restaking refers to staking assets again after the initial staking. Restaking has developed into one of the mainstream DeFi applications on Ethereum. Major projects include REZ, ETHFI, ALT, BB, etc. Coingecko data shows that DeFi ecosystem tokens have performed poorly in the last 30 days, with declines ranging from 40% to 60%.
Restaking Tokens’ Performance
(Source: CoinGecko)
SUMMARY
The approval of Ethereum ETFs may bring huge development opportunities for the Ethereum ecosystem. The above-mentioned projects are just a part of it, and there are many other potential projects worth attention. Please keep an eye on market dynamics and make investment decisions based on your own risk tolerance.
