Looking to the Futures
Crypto Hoarding Turns to Ether
The second largest cryptocurrency has surged over 200% from its April low and sits right below it’s 2021 all-time high. The value of all Ether has risen to $560 billion, bringing the total crypto ecosystem to a $4.2 trillion market cap according to CoinMarketCap.
Modeling after MicoStrategy Inc. (MSTR), some firms have stylized themselves as Digital Asset Treasuries or DATs. These companies have a singular goal which is to increase their holdings of a digital currency. Collectively, the firms applying this strategy to Ether have accumulated almost $17 billion worth of the cryptocurrency according to StrategicEthReserve.xyz. 180 Life Sciences Corp. (ATNF) published a press release on Tuesday they now hold 82,186 Ether. This is the day after they announced the closing of $156 million in convertible notes that were used to purchase Ether. BitMine Immersion Technologies (BMNR) is the frontrunner of the group with a stockpile containing almost $5 billion worth of the cryptocurrency.
The first U.S. spot Ether ETFs were approved in July. In their first full month of trading, they accrued over $1.7 billion in flows. According to Bloomberg, this Tuesday was the first time the Ether ETFs totaled more trading volume than the approved bitcoin ETFs.
The signing of the GENIUS Act outlining regulation for stablecoins provided another tailwind for Ether. Stablecoins constitute almost half of all blockchain fees and more than half of all stablecoins reside on the Ethereum network. An increase in stablecoin liquidity and velocity could lead to more decentralized finance (DeFi) transactions that are dominated by the Ethereum network.
Technicals
Micro Ether futures (/MET) are surging to multi-year highs with 4 out of the last 5 days finishing near the high of the day. While technically overbought with an RSI sitting at 80%, it only resulted in a pause 3 out of the last 4 times it reached these levels.
The 2-week correlation with bitcoin went negative for the first time in over a year in July as Ether climbed its previous leg up while bitcoin remained stagnant.
According to Coinglass, open interest in Ether futures across all exchanges reached a record high this week. If the enthusiasm surrounding the cryptocurrency dissipates, it could set up a sharp reversal as the futures sit 15% above the 9-day moving average.
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