ETHE Discount Shrinking, ETP Flows Remain Strong

Name: FS Insight
Price range: $$$

Jul 18, 2023

Author

Sean Farrell ^AC

BTC -3.03% DXY N/A% ETH -2.82%

Market Update Despite underwhelming retail sales data, positive earnings reports are driving equity markets upward. The increase in advance retail sales for June was a mere 0.2% month-over-month, falling below economists' predicted 0.5% increase. Nevertheless, the QQQ index has seen a 60 bps rise, and the SPX index a 52 bps increase. Cryptoassets are diverging from equities, not mirroring the rally spurred by solid earnings. At present, most cryptoassets are on a downward trend, with $BTC dropping below $30k and $ETH below $1.9k. This decline can be partially attributed to the surge in short-term rates and the bounce in the US Dollar Index ($DXY) to back over 100. Amid this landscape, one of the few winners is $SUI, a high-throughput blockchain network that has recently seen an increase in usage, up 8% on the day.As regulatory risks are being reevaluated, the discount for the Grayscale Ethereum Trust ($ETHE) is narrowing, in line with the trend seen with $GBTC. Although there are no current applications for an Ethereum ETF, there is a growing belief that the recent Ripple ruling, which declared XRP as a non-security, suggests that Ethereum would not be treated as a security by the courts. In theory, this development sets the stage for a future Ethereum ETF if sufficient demand e

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