May 23, 2024

🥛 D-Day for Ethereum ETFs: what to expect 👀

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GM. This is Milk Road, your crypto compass in the wild world of digital assets.

Here’s what’s on the map today:

  • $ETH D-Day: Awaiting 19b-4 decision 👀

  • Is the VC and CEX cartel real? 🧐

  • Grayscale launches 2 new trusts 🍪



The crypto market is buzzing about today’s upcoming decision by the SEC on Form 19b-4.

And in case you’re not up to date on the processes for an ETF approval, we’ve got this tweet from Delphi Digital to lay it all out for you:

Word on the street is that an approval today for Form 19b-4 is all but guaranteed…

So let’s look at what we can expect from the Ethereum ETF once it’s launched (fingers crossed). 🤞

If we think back to the Grayscale Trust Funds, Ethereum saw roughly 30% of the inflows that Bitcoin did.

Because of this, our Milk Road PRO team thinks we’ll see similar results for the Ethereum ETF vs. the Bitcoin ETF.

BUT it could be even less…

Eric Balchunas, Senior ETF Analyst for Bloomberg, predicts Ethereum ETFs will snag only 10-15% of the inflows that Bitcoin ETFs saw.

But, at the end of the day, we’ll all just have to wait and see.

One exciting thing to watch out for though, is how the $ETH ETF is set up perfectly as an onboarding tool for institutions to move onchain.

The ETF will introduce them to the gains that we’ve grown to know and love from $ETH, but the ETFs will likely be missing one crucial component… That sweet, sweet onchain yield.

AND institutions love yield.

So, don’t be surprised if we eventually see these investors moving onchain.

And once you go onchain, you don’t go back…

What do you think, will the Form 19b-4 be approved today?

A/ Yes

B/ No 

Hit reply and let us know with your comments! 


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Let’s focus on a hot topic that’s got Crypto Twitter yapping: the VC + CEX Cartel and the “Low Float, High FDV” debate

The VC + CEX cartel is a term being used to describe the alleged collaboration between venture capital firms and centralized exchanges (CEXs) in the crypto market. 

So, what’s the beef?

Critics claim this is a slick way for early investors, aka VCs, to dump on retail investors who end up holding the bag. Ouch! 😬

We're talking about new crypto projects launching with sky-high Fully Diluted Valuations (FDV) but teeny-tiny circulating supplies

This simply means a minimal circulating supply at token launch (~10% or less), but the numbers show a slightly different story.

So are VCs/CEXs dumping on retail? Not so much for top-tier tokens due to 1+ year vesting periods, but those shady VCs—they might still dump smaller tokens.

So, if we’re not convinced that “the cartel” is the cause, then what else could it be?

Here are a few other theories on why this is happening:

  1. Retail rage quitting for meme coins: A fun story, but no evidence. Meme coin volumes didn’t spike when other tokens crashed.

  2. Too little supply for price discovery: Token supply averages 13%, similar to IPOs in traditional finance.

  3. Regulatory clarity: The SEC’s lack of regulatory clarity has moved projects away from doing initial coin offerings (ICOs) to the public.

While the cause is hard to pinpoint, there is indeed a problem here!

Whether it’s due to VCs, regulators, retail behavior, or supply issues, this practice shakes trust in the crypto space, especially for retail. 

Just take a look at the chart below, 80% of tokens listed on Binance in the last 6 months have decreased in value since listing.

3 of the 4 in the green had NO tier 1 VC backing…

So, what can we do about it?

Instead of just talking about it like everyone else, Binance put forward a solution:

This past Monday, Binance released an announcement calling for project applicants of the smol-mid size.

It even mentions their recent full report titled “Low Float & High FDV: How Did We Get Here?”.

🥛 Milk Road Take: The main catalyst for this unideal scenario is the SEC’s lack of regulatory clarity that has moved projects away from doing initial coin offerings (ICOs) to the public.

To make matters worse, projects have a necessity to vest the tokens sold to VCs to prevent dumping but it contributes to the inflated FDV issue we see. 

The Milk Man thinks we are in a shakeout phase of regulatory approaches to find a balance that supports both investor protection and healthy market dynamics.

Don’t get caught up in hype trains… Educate yourself, look at FDV, and keep an eye on those unlock schedules. Stay golden, Ponyboy!



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MetaMask to Add Bitcoin Support. The blockchain wallet is planning to support Bitcoin within the next month, expanding its functionality beyond the Ethereum ecosystem. Hold onto your wallets, folks—this could get interesting!

Trump Campaign Starts Taking Cryptocurrency Donations. The Trump campaign will now accept crypto donations, aiming to build a 'crypto army' in a bid to attract younger, tech-savvy supporters. Looks like it's time to hodl for votes!

Grayscale Launches Two New Trusts for NEAR and STX.The newly introduced trusts exclusively for NEAR and STX, opens up new investment avenues for accredited investors.

Largest stablecoin issuers minted $1.25B on Ether ETF wave. The massive $30 billion year-to-date stablecoin surge signals skyrocketing demand for crypto exposure, likely from traders front-running the imminent SEC approval of spot Ethereum ETFs. — DL News

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.