• Asset manager DWS Group lists Ethereum ETC on German stock exchange Deutsche Borse.
  • The declining share of liquid staking protocol Lido could help Ethereum to escape "security" classification, according to JP Morgan analysts.
  • Ethereum restaking carries risks similar to those that caused the 2008 financial crisis, says Steven Walbroehl through Blockworks.

Ethereum’s (ETH) price continued consolidating for a third consecutive day on Friday after the hefty losses seen at the beginning of the week. Traders continue exercising caution despite news of German asset manager DWS Group launching an Ethereum exchange-traded commodity (ETC) and JP Morgan analysts providing positive updates on Ethereum's potential security status.

Read more: Ethereum continues consolidating as Q1 results show massive growth for the largest altcoin

Daily digest market movers: ETH ETCs, security designation, restaking risks

Ethereum's ETF decision is still one of the major topics surrounding the largest altcoin. While recent moves by key market players provide a positive for its price growth, restaking risks are gradually becoming a major concern. Here's Friday's ETH market movers:

  • Asset manager DWS Group, which handles a portfolio of around $900 billion, launched Bitcoin and Ethereum ETCs on the German stock exchange Deutsche Borse on Thursday. The ETCs, launched in partnership with digital investment manager Galaxy Digital Holdings, aim to track the price performance of Bitcoin and Ethereum. According to a press release by DWS, the ETCs are backed by their respective individual assets custodied by Zodia Custody and Coinbase, "which store the cryptocurrencies in segregated offline ('cold storage') custody accounts.” 
     
  • The launching of DWS's Ethereum-based commodity product comes at a time when questions surround its "commodity" status in the US. After Fortune's report that the Securities and Exchange Commission (SEC) is cracking down on the Ethereum Foundation in a bid to classify Ethereum as a security, many have expressed doubts that the SEC will approve applications for a spot Ethereum ETF. In an X discussion on Wednesday between Bloomberg analyst James Seyffart and Cory Klippsten, CEO of Bitcoin financial service firm Swan.com, the former reiterated that the SEC would find it difficult to classify Ethereum as a security after approving a commodity-based Ethereum futures ETF.
     
  • Moreover, in a report released Wednesday, JP Morgan analysts led by Nikolaos Panigirtzoglou shed light on the issue by stating that the recent reduction in the staked ETH share of staking protocol Lido raises "the chance that Ethereum will avoid being as a security in the future." According to the analysts, the "Hinman documents" released in June 2023 clarified the SEC's view of network decentralization's role in deciding if a digital token is a security. They further stated that SEC officials have previously acknowledged that "tokens on a sufficiently decentralized network are no longer securities because there's no 'controlling group' in the Howey sense."

Also read: Ethereum shows slow movements following criticism of issuance curve article by developer

  • Following the report, Ripple announced in a press release on Thursday that it would launch a USD stablecoin on its XRP Ledger and Ethereum. Considering the growing market cap of stablecoins, "there's clear demand for trust, stability, and utility," said Ripple.
     
  • Despite these positives, Steven Walbroehl, CTO of cybersecurity firm Halborn, has raised concerns about the current restaking boom on Ethereum in an article released on Blockworks. "Restaking protocols claim they've achieved new levels of efficiency by piggybacking on staking-based security models (...) but those efficiencies also entail risks — risks we don't entirely understand," said Walbroehl. He cited how these risks align with the problems that caused the Great Financial Crisis of 2008 and the 2022 exploit of Ankr restaking protocol on the BNB network. This comes off the back of similar restaking risk concerns raised by Coinbase analysts David Duong and David Han.

Technical Analysis: Can the fourth Bitcoin halving trigger an Ethereum rally

Ethereum's price has mostly stayed the same in the past three days as. traders are still indecisive about whether to go bullish or bearish. However, things could change soon, as Bitcoin's fourth halving event is only a few days away and Ethereum’s price movement tends to be highly correlated with those of Bitcoin.

ETH/USDT 1-hour chart

ETH/USDT 1-hour chart

ETH's quarterly returns showed it recorded 69.62%, 59.5%, and 104.15% gains in Q2, Q3, and Q4 2020, respectively, after the third Bitcoin halving, according to data from Coinglass.

ETH quarterly returns

ETH quarterly returns

Read more: SEC calls for comments on Spot Ethereum ETF applications, according to recent filings

While traders are bracing for a potential rally, Coinbase and Glassnode analysts have noted that the impact of the upcoming Bitcoin halving event may already be priced in considering the recent bull run led by the approval and launch of the spot Bitcoin ETFs in the US.

Cryptocurrency prices FAQs

Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.

A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.

Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.

Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Ethereum ETF issuers file updated drafts, ETH staking still a possibility

Ethereum ETF issuers file updated drafts, ETH staking still a possibility

Ethereum (ETH) is down 1% on Wednesday as issuers began filing their final spot ETH ETF S-1 drafts with the Securities & Exchange Commission (SEC) in anticipation of a launch on July 23. Meanwhile, SEC commissioner Hester Peirce also said the regulator may reconsider its position on ETH staking within the ETFs.

More Ethereum News

Could Vitalik Buterin's argument affect support for pro-crypto political candidates?

Could Vitalik Buterin's argument affect support for pro-crypto political candidates?

Vitalik Buterin released a post arguing that politicians who claim to be crypto-friendly now may not support it in the future. Buterin highlighted many key factors that crypto represents beyond trading tokens. Intentions of pro-crypto politicians are becoming the subject of debate following Buterin's post.

More Cryptocurrencies News

Dogecoin provides opportunity for investors to ride potential 40% rally

Dogecoin provides opportunity for investors to ride potential 40% rally

DOGE has maintained price patterns similar to BTC, ETH, and SOL. The popularity of other newer meme coins may be drawing attention away from DOGE. DOGE on-chain metrics and technical indicators suggest a rally may be on the horizon.

More Dogecoin News

AI tokens rally following Grayscale's Decentralized AI Fund launch

AI tokens rally following Grayscale's Decentralized AI Fund launch

Grayscale launched its Decentralized AI Fund on Wednesday, allowing investors to gain exposure to the price of AI-focused cryptocurrencies. Following the announcement, the general market cap of AI tokens rose by nearly 4%.

More Cryptocurrencies News

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows.

Read full analysis

BTC

ETH

XRP