Friday, May 24, 2024

a big step forward, a worried market, Taiwan tension, watch those food prices

“It was impossible to get a conversation going, everybody was talking too much.” – Yogi Berra  ||  

Hi everyone, and Happy Friday! Today’s newsletter will be relatively short since it’s been an exhausting week and I’m sure you’re all eager to slide into the weekend.

Yesterday was quite a day. I was on the Wolf of All Streets show talking to Scott Melker about, you guessed it, the ETH ETFs, as well as a bit of macro. And then late last night I joined The Close on Bloomberg to discuss, you guessed it, the ETH ETFs. I went on right after Eric Balchunas, a very hard act to follow, but I think I did ok.

Programming note: This newsletter will be taking a break on Monday for Memorial Day, joining my US readers and colleagues in kicking off the summer season! Back on Tuesday!

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IN THIS NEWSLETTER:

• A big step forward

• A worried market

• Taiwan tension

• Watch those food prices

If you’re not a subscriber to the premium daily, I hope you’ll consider becoming one! You’ll get ~daily insight into the growing overlap between the crypto and macro landscapes, as well as some useful links. And there’s a free trial!

WHAT I’M WATCHING:

A big step forward

So, we now have the official go-ahead from the SEC for the first listed ETH spot ETFs in the US.

I’m still stunned, not gonna lie. Just a few days ago, I was sure it wouldn’t happen. I don’t remember when last I was so happy to be wrong.

There is still much we don’t know:

• The voting split. It was 3-2 for the BTC spot ETFs, with Chair Gensler himself casting the deciding vote in favour. Here, we’re unlikely to get that information, since the votes were delegated to the director of the division.

• The fees. I imagine these will be announced in coming days.

• The ticker symbols. BlackRock has reportedly snagged ETHA, but I haven’t seen the others yet.

• The timing! Yesterday’s approval only covers the 19b-4s, which is the proposed rule change filed by the exchanges. Now the SEC has to approve the S-1s, which are the prospectuses filed by the issuers. This could take days, weeks or months. Approval is likely, although we may see more cosmetic changes requested.

What we do know:

• Unstaked ETH is not considered a security by the SEC. Funds whose assets consist largely of securities don’t file S-1s (they file N-2s or N-1As.)

• The political hostility toward the crypto industry in the US is thawing.

The above two points are the big deal here. It’s not the likely inflow of funds into the new products, because, as I wrote earlier this week, they will probably be disappointing. Rather, it’s the official validation that ETH is now a retail- and institution-ready “commodity” investment asset, with liquid and transparent markets.

It’s also the implied go-ahead for builders on Ethereum that, by handling ETH, they are not violating securities laws.

Also, it’s a loud signal to jurisdictions around the world that the US is finally getting its collective head around the fact that crypto assets are an interesting market, here to stay, and large enough to warrant official consideration. Next Tuesday, the London Stock Exchange will list BTC and ETH ETNs in a first for the UK, although for now these are only available to professional investors.

Finally, it’s confirmation that the crypto lobby is fierce and effective, and that politicians now realize voters want choice and respect more than smothering in the name of protection.

Onward.

A worried market