• Canada-based Purpose Investments announces conversion of its Ethereum Capital Corporation into staked Ethereum ETF.
  • Conversion sees Canada embracing Ethereum staking ahead of US after SEC signals discomfort with concept.
  • Ethereum price's recent downtrend could prove a good buy-the-dip opportunity.

Ethereum (ETH) resumed its downward trend on Monday after a slight weekend recovery following the launch of the Canada-based Purpose Investment Staked ETH ETF.

Daily digest market movers: Purpose Investment launches staked ETH ETF

In a press release on Monday, Purpose Investment announced the conversion of its Ether Capital Corporation to Purpose Ether Staking Corp ETF. The move comes after its shareholders voted to approve the corporation's conversion into an ETF actively managed by Purpose.

Also read: Ethereum ETFs could go live before July 2 after SEC send issuers comments on S-1s

"By using advanced staking capabilities developed at Ether Capital and working with our custodial partners at Gemini to develop an institutional-grade ETF ether staking framework, we're providing investors with a powerful tool that combines the benefits of staking with the robust oversight, transparency, and liquidity that an ETF structure provides," says Vlad Tasevski, Purpose’s Head of Asset Management, Institutions and Investors.

According to the press release, the ETF will begin trading on the Chicago Board Options Exchange (CBOE) under the ticker ETHC.B.

With the ETHC.B launch, Canada will get its second staked ETH ETF after 3iq launched ETHQ last year. Meanwhile, the US Securities & Exchange Commission (SEC) has signaled that it's uncomfortable with staking after prospective spot ETH ETF issuers updated their applications to remove words related to the concept.

Read more: Ethereum could sustain range-bound move following SEC Chair’s uncertainty over ETH status

The SEC approved spot ETH ETF issuers' 19b-4s on May 23 and sent comments on their S-1s last week, with expectations that the ETFs may begin trading on or before July 2.

ETH technical analysis: Could current prices prove a good buy-the-dip opportunity?

Ethereum is trading around $3,530 on Monday after failing to see any substantial price gain despite the positive impact from the SEC sending issuers comments on their spot ETH ETF S-1 registration statements.

ETH broke out from a descent that saw its price reach around $3,361 before moving back to claim the $3,600 zone. However, prices have slightly retraced on Monday. As a result, ETH liquidations reached $30.94 million in the past 24 hours, with long liquidations accounting for $19.11 million and shorts accounting for $11.82 million.

Also read: SEC Chair says Ethereum ETF S-1 approvals likely to come over the summer

With the potential launch of spot ETH ETFs in a few weeks, several analysts expect the price of ETH to set a new all-time high above $4,878. According to crypto analyst @CryptoJelleNL, ETH turning the $3,500 level into support could prove crucial in ETH's bid to reach the $5,000 mark. Hence, the recent downtrend could prove to be a crucial buy-the-dip opportunity. If ETH flips the $3,900 key resistance, it will give credence to the bullish view.

ETH/USDT 4-hour chart

ETH/USDT 4-hour chart

On the other hand, the $3,300 support is a key price level to watch in the coming days. A breach below this level would invalidate the bullish thesis and may send ETH into the key range of $2,852 and $3,300.

Ethereum FAQs

Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.

Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.

Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.

Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.

 


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