ETH Futures ETFs See Low Volumes, SOL Breaking Away From the Pack
Market Update
- It's a new day, but the script is pretty much a repeat of the last several weeks, characterized by rising interest rates, particularly at the long end of the curve. The U.S. 10-Year Treasury yield is inching toward 4.8%, while the 30-Year yield is nearing 5%, spurred by higher-than-expected JOLTS figures released this morning. Alongside this, the DXY is gaining, gold prices are declining, and equities are in the red across all sectors. In the crypto space, the downturn is less severe but still noticeable. BTC has dropped to around $27.4k, and ETH is trading at approximately $1650. However, some assets like SOL and MATIC are bucking the trend, up by 4% and 5%, respectively. This comes on the heels of yesterday's launch of the first ETH futures ETFs, which saw less retail demand than anticipated, a topic discussed in greater detail below.
- A total of 9 ETH futures-based exchange-traded funds (ETFs) debuted yesterday. Five of these are exclusively focused on ether futures, while the remaining four hold a mix of bitcoin and ether futures. The most traded among these was Valkyrie's Bitcoin Strategy ETF, with a trading volume of $882,000. In total, the combined trading volume for all nine ETFs was less than $2 million—starkly different from the ProShares Bitcoin Strategy ETF (BITO), which boasted over $1 billion in trading volume on its debut day. The SEC strategically launched these new ETFs on the same day to avoid favoring any single fund. While these flows may disappoint some, it's crucial to consider the market context in which these ETH ETFs were introduced. Unlike BITO, which debuted amid a crypto bull market and was the first crypto ETF accessible through U.S. brokerage accounts, these ETH ETFs were launched following a prolonged bear market and a series of gains in the U.S. dollar, as evidenced by the DXY's 11 consecutive weekly increases. Furthermore, the relatively modest trading volumes for these Ether ETFs are typical for new ETFs in traditional financial markets. The discrepancy between actual performance and market expectations likely stems from the heightened anticipation that often accompanies new crypto financial products.
- The prospective successor to the bankrupt crypto lender Celsius, currently known as NewCo, has filed a court plan to restart the business with no debt and up to $450 million in crypto seed funding. Managed by the investment consortium Fahrenheit, which has pledged an equity investment of up to $50 million, NewCo aims to reimburse frozen customer funds by year-end and distribute approximately $2 billion in BTC and ETH to creditors as swiftly as possible. The plan has garnered overwhelming support from creditors but faces some opposition due to valuation concerns. It also includes a Nasdaq listing for NewCo. If approved, this would mark the industry's first successful post-bankruptcy revival of a crypto platform. This development is important to monitor for two key reasons: (1) it will introduce another publicly traded and audited crypto equity, and (2) upon execution of this restart plan, there will be $2 billion of unlocked BTC and ETH liquidity, creating a potential supply overhang for the market to absorb.Timing around the distributions to creditors is currently unknown but likely prior to the end of this year.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Solana has largely held up much better than its peers in recent days and has rallied nearly 40% just in the last two weeks as the gradual basing process following its decline continues. The area from $26-$27.50 has proven important going back since last year and expect it might also result in temporary resistance this time around. (SOL rally back in mid-July showed just a temporary breakout which then failed and subsequently reversed back lower to rejoin its existing consolidation. Overall, SOL looks attractive at current levels, and i anticipate an eventual breakout of $27.50 which should jump-start its intermediate-term rally, with movement over mid-July's peak at $32.40 likely carrying SOL to the mid-$40's initially. Pullbacks likely will provide buying opportunities if/when these occur in the weeks ahead and the area at $20.50-$22 being important technically. Bottom line, SOL looks attractive and its breakout likely happens sometime in October.
Daily Important Metrics
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All metrics as of October 3, 2023 12:58 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $536B | $27,458 | ↓ -2.06% | ↑ 66% | |
 ETH | $199B | $1,656 | ↓ -1.93% | ↑ 38% | ↓ -28% |
 SOL | $10.0B | $24.20 | ↑ 0.47% | ↑ 144% | ↑ 79% |
 ADA | $9.2B | $0.2618 | ↓ -0.96% | ↑ 6.08% | ↓ -60% |
 DOGE | $8.7B | $0.0616 | ↓ -1.58% | ↓ -12% | ↓ -78% |
 MATIC | $5.3B | $0.5718 | ↑ 2.35% | ↓ -25% | ↓ -91% |
 DOT | $5.0B | $4.09 | ↓ -2.13% | ↓ -5.84% | ↓ -72% |
 LINK | $4.2B | $7.49 | ↓ -2.58% | ↑ 35% | ↓ -31% |
 NEAR | $1.1B | $1.10 | ↓ -2.47% | ↓ -13% | ↓ -79% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -21% | $19.47 | ↑ 0.10% | ↑ 135% | ↑ 69% |
| BITW | ↓ -47% | $11.85 | ↓ -2.31% | ↑ 121% | ↑ 55% |
| ETHE | ↓ -28% | $10.94 | ↓ -1.43% | ↑ 130% | ↑ 64% |
| BTCC | ↑ 0.89% | $5.03 | ↓ -2.52% | ↑ 66% | ↑ 0.26% |
News
QUICK BITS
The Block OP Labs’ ‘fault proof’ system goes live as an alpha on testnet Considered a key element missing from networks utilizing its software, OP Labs said its "fault proof" system is now live as an alpha. |
The Block Celsius successor to be seeded with $450 million in crypto if restart plan approved Celsius' successor, currently dubbed “NewCo,” will be seeded with up to $450 million in cryptocurrency, according to a filing. |
Decrypt.co On-Chain Sleuthing Firm Chainalysis Slashes Headcount by 135 The Chainalysis cuts follow an earlier 5% workforce reduction in February, reflecting a broader trend of layoffs in the industry. |
MARKET DATA
The Block Ethereum Layer 2 StarkWare delays first token unlocks to April 2024 Ethereum Layer 2 developer StarkWare has delayed the first unlocks of its native StarkNet (STRK) token to April 2024. |
CoinDesk Rollbit Recorded $38M in September Betting Revenues, RLB Token Climbs Over 1.2% of the token’s supply was destroyed in line with plans, a co-founder said. |
Decrypt.co Hong Kong Adds ‘Potential Tailwind’ for East Asia Crypto Trading Volumes: Chainalysis Hong Kong may be providing a haven for crypto investors from war-torn nations and Chinese citizens dodging restrictions. |
HACKS, EXPLOITS, AND SCAMS
CoinDesk Friend.Tech Users Targeted by SIM Swap Attack, Several Ether Drained Users tie Friend.Tech accounts to real-world X profiles and phone numbers - which increases security risks. |
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