Ethereum ETF, Trump's trump card and Bitcoin

In this article I'll be discussing:

1. The shock approval of the Ethereum ETF
2. Trump's political crypto ace card
3. The recent quarterly disclosures of companies holding the bitcoin ETF

The price of Ethereum has surged over 18% in the last month to over $3,900 USD following the recent approval of the spot Ethereum ETF on May 23rd 2024.

It's a move that shocked many in the crypto industry, including Ethereum fans. Bloomberg Intelligence analysts James Seyffart and Eric Balchunas went on record saying that the likelihood of an Ethereum ETF approval was <25% just days before the approval.

However, in a drastic turn of events, the SEC requested amendments to the filings from the Ethereum ETF applicants despite months of no communications. This has led many to believe that there has been a significant political intervention underlying the recent pivot from the US securities and exchange commission to approve the spot ETFs.

Perhaps more than coincidentally, Trump has started using bitcoin and crypto as a key campaign point to persuade the ~46m Americans that own crypto to vote for him.

Here's just a few of the quotes from a Trump speech you can watch here:

"I will stop Joe Biden's crusade to crush crypto".

"I will keep Elizabeth Warren and her goons away from your bitcoin".

"I will ensure that the future of crypto and the future of bitcoin will be made in the USA".

"I will support the right to self-custody".

"I will never allow the creation of a Central Bank Digital Currency".

Like it or not, Trump is playing a smart political card. Banning bitcoin and cryptocurrency is not likely to win you any votes, but publicly endorsing it will almost certainly persuade potentially millions of passionate crypto advocates to vote for Trump.

What will be interesting to see is whether the democratic party will pivot on its anti-crypto policies which have been spearheaded by Senator Elizabeth Warren. De-banking crypto related institutions and establishing unfair accounting treatment and lack of regulatory clarity which many believe actually made the crypto exchange collapses like FTX, Celsius and BlockFi all the more likely as they based their HQs overseas and away from US regulators.

As we enter the midway point of 2024, I'm excited to see how the bitcoin and soon to be launched Ethereum ETFs will perform. One thing is certain now though, the flood gates for institutional capital are well and truly open, and in many ways, we have just reached the starting line for true price discovery.

Morgan Stanley recently announced they hold over $270m of the Grayscale bitcoin ETF, with other banking giants like  JPMorgan, Wells Fargo, and UBS, also disclosing holdings in the spot bitcoin exchange-traded funds during the first quarter.

You can see the full list of companies holding the spot bitcoin ETFs here.

The list includes over 1000 companies which have $11.6B of bitcoin in assets under management.