Research Summary
The report provides an analysis of the cryptocurrency market, focusing on Ethereum (ETH) and its recent ETF approval. It also discusses the impact of inflation on the market and highlights several cryptocurrencies such as $FTM, $RLB, and $CHZ. The report further examines traditional finance (TradFi) macro trends, crypto macro trends, and on-chain metrics for Bitcoin.
Key Takeaways
Ethereum’s ETF Approval and Market Impact
- Ethereum’s ETF Approval: The report highlights the recent approval of the Ethereum ETF, which has led to a significant repricing of ETH from below $3K to $4K. The approval has also increased the odds of an ETH approval from nearly 0% to being approved.
- Market Impact: The approval of the ETH ETF has resulted in a bullish market sentiment for ETH and ETH beta alts like ETHFI. The report suggests that the ETF flows could add at least $1-2K to ETH’s price.
High Conviction Picks and Inflation Concerns
- High Conviction Picks: The report remains bullish on picks such as $FTM, $RLB, and $CHZ, despite the attention being spread to ETH due to the ETF listing. It predicts that attention will return to these names post the ETH ETF listing.
- Inflation Concerns: The report notes that concerns around inflation are not entirely gone, and this could lead to a positioning unwind in the period leading up to the FOMC meeting in June.
Bitcoin On-Chain Metrics
- Bitcoin Dominance: The report notes a decrease in Bitcoin dominance due to ETH’s recent rally.
- Miner Activity: The report indicates that Bitcoin miners continue to sell, which could impact the market dynamics.
Protocol and Chain Metrics
- Preferred Destinations for Stablecoins: Arbitrum, Base, and Optimism continue to be preferred destinations for stablecoins, according to the report.
- Active Users: The report highlights the active users of various protocols, indicating the level of engagement and activity in these platforms.
Actionable Insights
- Monitor Ethereum’s Performance: Given the recent approval of the ETH ETF, it would be beneficial to closely monitor the performance of ETH and its impact on the broader market.
- Consider High Conviction Picks: Despite the current focus on ETH, the report suggests that $FTM, $RLB, and $CHZ could see a return of attention post the ETH ETF listing. These could be potential areas of interest.
- Assess Bitcoin On-Chain Metrics: The on-chain metrics for Bitcoin, including miner activity and dominance, could provide valuable insights into the market dynamics and potential trends.
- Evaluate Protocol and Chain Metrics: The report highlights the importance of evaluating protocol and chain metrics, including active users and preferred destinations