Author | BlockBeats

Produced by | Plain-language Blockchain (ID: hellobtc)

On June 27th, Matthew Sigel, the head of digital asset research at VanEck, stated that he had applied to the SEC for a Solana ETF.

The new fund is called VanEck Solana Trust, the first Solana ETF to be applied for in the United States. He stated: "The native token SOL has similar functions to other digital commodities such as Bitcoin and Ethereum, used for paying transaction fees and computing services on the blockchain, and like ETH on the Ethereum network, SOL can be traded on digital asset platforms or used for peer-to-peer transactions.

Bloomberg ETF analyst James Seyffart posted on social media that the Solana ETF came "earlier than expected," but its approval is still unknown. Whether approved or not, this is enough to excite the dormant crypto community, as this round of the market can be described as an ETF bull market.

Translation: The first SOL ETF has been applied for in the United States. Interestingly, will there be other issuing institutions immediately following suit? It is preliminarily believed that this ETF may not have a chance to be launched until 2025, provided that there are new management teams in the White House and the SEC at that time. However, even so, it is not guaranteed to be launched.

01. "Bitcoin's Lone Bull"

After the spot ETF was approved, BTC, as a representative of digital assets, became the first "logically feasible" target in the industry.

The Bitcoin spot ETF provided Wall Street with a legitimate channel to allocate crypto assets, bringing a large amount of off-exchange funds to the crypto market. It can be seen from the key points of Bitcoin's rise that the surge from $25,000 to a new high of $69,000 was almost entirely driven by ETFs, whether it was due to litigation victories or fake news, the stimulus from the news has always moved the market.

On August 30, 2023, Grayscale won the lawsuit against the SEC, overturning the SEC's decision to block Grayscale's ETF. With the fake news about the Bitcoin spot ETF approval in October, Bitcoin stabilized at $34,000. On January 11, the SEC simultaneously approved 11 spot Bitcoin ETFs, causing the price of Bitcoin to soar to $48,590 on the same day.

After the Spring Festival, Bitcoin began a rapid upward trend. After surpassing the $69,000 mark, Bitcoin's market value reached $1.35 trillion, surpassing Meta Platforms to become the 9th largest global asset by market value.

Data shows that from January 21 to 26, the total assets under management of Bitcoin ETFs decreased from $29.16 billion to $26.062 billion in 5 days, losing over $3 billion. Since February, the total assets under management of Bitcoin ETFs have steadily increased from $28.3 billion, breaking through $40 billion in less than a month.

With a large influx of funds, the price of Bitcoin has seen a significant surge. Throughout February, Bitcoin's price experienced the largest fluctuations in history, with the price of each Bitcoin rising by $18,615, higher than the value of Bitcoin 15 months ago.

In comparison, altcoins have struggled to keep up with BTC's rise. The significant positive news for the Ethereum ecosystem, the London hard fork, was overshadowed. Solana made a dazzling appearance with Memecoin, but this led to continuous disruptions in the market, such as presales and celebrity coins, and the rise of pumpfun further divided market attention, pushing crypto VCs into opposition with retail investors.

Meanwhile, the Bitcoin ecosystem led by Rune has been developing strongly. Many believe that this cycle is a "lone bull" for Bitcoin due to the lack of a clear business model and asset logic.

02. BlackRock Wants, BlackRock Gets

If one were to find a reason for the start of this bull market, it would undoubtedly be BlackRock. In the context of a deep bear market and high-pressure regulation in the industry, BlackRock's ETF single-handedly reversed the situation in the crypto market.

After the launch of the Bitcoin spot ETF, IBIT also performed the strongest and had the best liquidity. Last week, HODL15Capital listed the top ten companies holding Bitcoin globally, with BlackRock's IBIT ranking first with 305,614 BTC.

There is a saying on Wall Street: "BlackRock Wants, BlackRock Gets." As a financial giant managing $10 trillion in assets, it seems that the SEC has to give way to BlackRock.

What many people have not realized is that the launch of the Bitcoin spot ETF may just be an appetizer for the tokenized world laid out by the financial giant.

At the end of 2022, BlackRock CEO Larry Fink stated, "The next generation of markets, the next generation of securities, will be the tokenization of securities." BlackRock's entry into Bitcoin is much larger in scale than we think. Subsequently, we saw BlackRock's institutional digital liquidity fund BUIDL Fund launched on Ethereum.

On April 30, the first digital asset fund BUIDL launched by BlackRock in collaboration with Securitize successfully topped the market in just six weeks, capturing nearly 30% of the $1.3 billion digital treasury market.

The market value of tokenized US Treasury bonds has grown significantly this year, with tokenized RWAs (including treasury bonds, bonds, and cash equivalents) growing by 35% in the past two months. Leading the way is BlackRock's BUIDL, which has grown by 65% since the beginning of this quarter, driving the total market value of tokenized government bonds to over $1.5 billion. During the same period, the total locked value of Ondo Finance, one of the leading RWA DeFi protocols, increased from $221 million in April to $507 million.

In less than a month after the launch of BUIDL, there was a dramatic turnaround in the staking aspect of the Ethereum spot ETF, with an application being approved directly, despite regulatory issues.

On May 24, the approval rate of the Ethereum spot ETF, which was previously not favored and had an approval rate of only 7%, skyrocketed to 75% overnight, and the price of ETH repeatedly broke through the $3,800 mark.

After Ethereum switched to a new governance model called Proof of Stake (POS) in September 2022, the US Securities and Exchange Commission (SEC) initiated an investigation into the Ethereum Foundation based in Switzerland. "Proof of Stake" has in fact provided the SEC with a new excuse to try to define Ethereum as a security.

As a compromise, companies applying for ETFs, such as BlackRock, removed the staking part from their ETF proposals, stating that they would not pledge the trust's assets. On May 30, BlackRock stated in a filing submitted to the SEC that it would purchase $10 million worth of ETH to provide funding for its Ethereum ETF.

With BlackRock's three-pronged approach, the difficulties brought to the industry by the SEC over the past year have begun to be resolved. With the big brother leading the charge, a series of smaller players have followed suit, and BlackRock has brought in numerous institutions to lay out the "crypto logic/crypto terms," marking a new phase in the mainstreaming process.

03

Can Shitcoins, ETF Funds Also Cover?

Whether there will be a bull market for shitcoins is a question that has been discussed in the industry over the past six months.

On the one hand, VC funds are large, and the influx of new retail investors is not as expected, making it difficult for funds to support new coins and old tokens still surviving in the market. This has led to an increase in project valuations in the primary market, with high FDV and low circulation of tokens after they go live. Secondly, due to the saturation of applications in the previous bull market, leading to "overload" of block space, VC funds were mainly deployed in the infrastructure sector during the bear market, causing a lag in the development of the application layer that is most perceptible to users. When the market suddenly experienced a rally, it presented a problem of "narrative poverty."

But ultimately, what everyone is most concerned about is the money coming in from Bitcoin ETFs not flowing into shitcoins.

In the previous cycle, crypto institutions used BTC as collateral and leveraged it, and then these leveraged funds flowed into the shitcoin market, driving overall crypto market growth and leading to the so-called shitcoin bull market. However, the logic has clearly changed in this cycle. The spot ETF is custodied by custodian institutions and cannot be leveraged, which directly kills off an important source of funding for the shitcoin market.

However, the new developments in ETH and SOL spot ETFs this month bring a renewed and clearer logic to attract and create liquidity for the crypto industry. ETF funds will not only be exclusive to Bitcoin, but shitcoins can also be covered.

The next question is, will consumers in the capital market pay for crypto assets other than Bitcoin?

In the short term, this may be difficult. The world's general understanding of cryptocurrencies is still primarily focused on Bitcoin. Concepts such as smart contracts, Ethereum, and Solana still need time to be digested. But this is where institutions like BlackRock see their business opportunities (packaging crypto indexes).

On the other hand, the entry of traditional institutions may gradually squeeze out many native crypto institutions in the market, especially market makers and OTC (over-the-counter) roles. The regular army can bring in funds, but they can also take away your job.

In conclusion, regardless of whether the SOL ETF is approved or how the ETH ETF performs in the future, the logic and trend of the ETF bull market seem to be unstoppable.

Original Source: The Block Beats

END

Previous Article: A Comprehensive List of Projects and Tracks Frequently "Liked" by Ethereum Founder Vitalik Buterin

Recommended Reading

Is the bull market over? Don't panic, these developments in the second half of 2024 are still worth looking forward to

Global Bitcoin ETF holdings surpass 1 million coins, which top institutions hold them?

Bitcoin wallets and exchanges are in trouble again? Millions of dollars stolen, even big players are having trouble

The "Crypto President" team that is "playing with Bitcoin" is growing, is a new global consensus coming?

Trump and Biden are competing to "woo Bitcoin," is the US crypto regulation about to make a huge shift?

"Disclaimer: This article represents the author's independent views and does not represent the position of Plain-language Blockchain. This content is for educational and exchange purposes for crypto enthusiasts and does not constitute investment advice or recommendations. Please approach it rationally and establish the correct mindset and risk awareness. The copyright and final interpretation of the article belong to Plain-language Blockchain."

If you like it, please click "Read"!

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。