Altcoins
Why Crypto Altcoins Popped Up This Week
A Ethereum (CRYPTO:ETH) exchange-traded fund (ETF) was approved this week, which could open the door to a flood of AND F and funding the crypto industry. At least that’s what the market was speculating this week.
According to data provided by S&P Global Market Intelligence, Uniswap (CRYPTO: UNI) has risen as much as 28% over the past week, while Ether marked by the Lido (CRYPTO: STETH) increased by 25.3% and Arbitration (CRYPTO:ARB) rose 17.9%. The three tokens are currently trading up 21.7%, 18.9%, and 11.2%, respectively, as of 3:30 p.m. ET on Friday.
Ethereum gets its ETFs
This week, the United States Securities and Exchange Commission, or SEC, approved a spot Ethereum ETF, following the approval of Bitcoin (CRYPTO: BTC) ETF earlier this year. This came as a surprise to the industry as questions arose as to whether or not Ethereum would be considered a commodity or security. If it were a commodity, like Bitcoin, an ETF would make sense, but a security would not have been approved.
The approval of an Ethereum ETF indicates that Ethereum is a commodity and it is likely that other crypto tokens will follow the same path. We could see this opening the door to similar tokens with similar characteristics, such as the ability to deploy smart contracts on the blockchain.
Moving the industry forward
When Bitcoin ETFs were approved, the market drove up a number of tokens. This week’s decision had the biggest impact on tokens linked to Ethereum. Ethereum itself is up 20.9% over the past week and broke out when speculation began circulating about the ETF’s impending approval.
So it’s no surprise that Lido Staked Ether followed suit and Uniswap, which is a decentralized exchange on Ethereum, also followed suit. More value and usage on Ethereum should be beneficial to the ecosystem.
Arbitrum is a layer 2 blockchain, meaning it is built on Ethereum and aims to make Ethereum “more inclusive and sustainable” through scaling technology. Like other tokens built on Ethereum, an ETF could mean either increased use of Ethereum and/or an ETF including tokens like Arbitrum in the future.
Rising tide lifts altcoin boats
Like the Bitcoin-fueled run earlier this year, the approval of the Ethereum ETF is sparking speculation about what happens next from the SEC and the market. We know that Bitcoin ETFs have attracted tens of billions of dollars of investment and it is possible that Ethereum, which is the second largest token by market capitalization, could do something similar. I don’t think it would be as popular as Bitcoin, but any increase in funds going to the Ethereum ecosystem would be positive.
The story continues
What’s less clear is what happens next, and that’s where much of this week’s speculation is coming from. Are altcoin ETFs coming? Will meme coins benefit from an ETF?
I think it’s clear that the SEC is softening its objections to crypto after losing a number of court battles, which could open the industry to more funds and ultimately use long-term cases . This is extremely bullish for crypto, but there will be a lot of volatility on the path to a sustainable industry.
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Travis Hoium has positions in Ethereum. The Motley Fool has positions and recommends Bitcoin, Ethereum and Uniswap Protocol Token. The Motley Fool has a disclosure policy.
Why Crypto Altcoins Popped Up This Week was originally published by The Motley Fool