Ether (ETH) took centre stage, outshining Bitcoin (BTC) on Thursday, following the world’s biggest asset management giant BlackRock’s move to initiate the listing process for an ETH exchange-traded fund (ETF).
The surge in ETH surpassing $2,000 early U.S. morning hours from below $1,900 was prompted by the registration of a corporate entity named “iShares Ethereum Trust” in Delaware, a pattern reminiscent of BlackRock’s iShares Bitcoin Trust in June.
History repeated on Thursday; a Nasdaq filing confirmed BlackRock’s intention to launch an ether-focused ETF shortly after the Delaware registration, causing BTC to hit an 18-month high of almost $38,000, only to experience a rapid reversal, settling around $36,300.
ETH exhibited a 10% increase over the past 24 hours, while BTC advanced just 3%.
XRP, DOGE UNI, and XLM – Altcoins Plunge
Most alternative coins – altcoins – faced a decline, with XRP, DOGE, UNI, and XLM experiencing a 6-7% drop and TON pulling back by 10% after the previous week’s rally of over 20%. In contrast, governance tokens of leading ETH liquid staking platforms, such as Lido’s (LDO) and RocketPool’s (RPL), rose by 18% and 23%, respectively.
The performance of the CoinDesk Market Index (CMI) sectors highlighted a divergence between the two major cryptocurrencies and the broader market, with only the ETH-heavy Smart Contract Platform sector and BTC-led Currencies sector posting gains. The altcoin weakness coincided with a risk-off sentiment in traditional markets, influenced by Federal Reserve Chair Jerome Powell’s remarks on the possibility of interest rate hikes, leading to a nearly 1% decline in U.S. equities.
Why is BlackRock’s ETH ETF application important?
Observers emphasised the significance of BlackRock’s ETH ETF application, suggesting that it could attract sophisticated investors who were previously hesitant to enter the crypto market if approved. Diogo Monica, President of Anchorage Digital, noted that a spot ETH ETF would provide a regulated and accessible avenue for institutions and consumers to engage with the ETH ecosystem, with the added allure of staking rewards due to Ethereum’s proof-of-stake nature.
“A spot ETH ETF would have a similar impact as a BTC counterpart, providing a regulated and accessible wrapper for institutions and consumers to participate in the ETH ecosystem,” he explained in an emailed note.
“But Ethereum adds an extra layer of intrigue as a proof-of-stake asset, which means underlying ETH could also be staked for additional rewards,” he added.