Ethereum is at a critical point critical As I shoot this video The Spot ethereum ETFs could be days away from listing and This has everyone wondering what it Means for the price of eth and for Ethereum more broadly today we are going To be answering all of that and Analyzing exactly where eth could be Headed next so if you hold eth then this Is a video you cannot afford to Miss now as always nothing in this video Is financial or investment advice it's Just educational content that's intended To inform you about ethereum I'll also Note that basically everyone here at Coin Bureau holds eth in their crypto Portfolio but we promise to be as Objective as possible I mean that should Go without saying it goes without saying Now with that said it's been over half a Year since we did a proper ethereum Update and it's safe to say that quite a Lot has happened since then to put Things into perspective the last time we Did a deep dive into ethereum was December 2023 now some of you will recall that Eth wasn't the most popular of Cryptocurrencies back then in fact Google search results for salana Actually ended up flipping those of Ethereum by the end of the month and at The same time sentiment about eth on Social media platforms like X was kind
Of falling through the the floor what's Interesting though is that this fud Seems to have overshadowed some really Bullish developments for example Ethereum finalized a new token standard Called ERC 3643 which essentially makes it possible To issue tokenized real world assets on Its blockchain in retrospect this was Probably a sign of things to come and What's crazy is that Moody's was already Predicting that ethereum would become Big for these real world assets or rwas Oh and by the way you can learn more About rwas and other top crypto Narratives using that link down in the Description oh and uh while you're at it Smash that like button subscribe to the Channel and ping the notification Bell As well so you don't miss the next one Now in January this year the fud around Ethereum increased when it was revealed That nethermind one of its largest Blockchain clients had experienced a Technical issue and this of course Caused everyone to switch to G which is Of course another popular blockchain Client and this resulted in Centralization concerns on that note if You watched our recent video about who Controls ethereum you'll know that both Nethermind and gu appear to be closely Affiliated with the ethereum foundation And this could be part of the reason why
The nonprofit has been experiencing Regulatory scrutiny but we'll come back To that in a bit now to to add insult to Injury the test net for ethereum's Dankun upgrade also experienced a Delayed launch in January and this Underscored something that we actually Mentioned in our last ethereum update And that's that the technical issues Could become more frequent and more Serious as ethereum evolves but again That's something we'll come back to a Bit later in the video now in February This year the ethereum fermo started Rolling back in ethereum wallet metamask Announced that it had integrated with The Robin Hood trading platform which You'll know is a very popular retail Broker in the US Reddit also revealed That it had been buying Bitcoin and Ethereum for its reserves and then we Also had news that a Swiss firm was Helping bring liquid eat staking two Swiss banks but the most bullish news of All however was the news that the Hong Kong arm of a Swiss Mega Bank UBS was Testing tokenized assets on ethereum in Retro ECT this was probably another sign Of things to come it's actually crazy That you don't notice all of these Things happening before our very eyes Until after the fact like like not Noticing some underrated cryptos uh out There right now that are right in front
Of you more about that in the Description now in March of this year The fomo around ethereum increased when Its dencon upgrade went live and when Black Rock launched tokenized rwa funds On its blockchain the former increased Ethereum's scalability and affordability Via its layer twos and the latter Highlighted ethereum's status is Ground Zero for Rwas this time around though the fomo Seems to have overshadowed some more Bearish developments for example Speaking of Black Rock they revealed That there wasn't much demand for eth From their clients and we also had Salana which flipped ethereum by onchain Activity and then fidelity came out and They raised concerns about ethereum that Was surpassing 1 million validators but The most bearish news of all however was The Revelation that the ethereum Foundation was under investigation by an Unnamed government entity and subsequent Reports revealed that this entity was None other than the one and only SEC c Those reports also revealed that it was Probing the ethereum foundation to Assess if eth was an unregistered Security and in April this invest Tigation evolved into action with the SEC issuing a Wells notice to consensus Which is of course one of the largest Companies in the ethereum ecosystem and
Unis swap which is the largest Decentralized exchange or Dex for Context a Wells notice signals the sec's Intention to sue but notably it does not Constitute a formal lawsuit now rather Than respond with the standard Wells Submission letter as Unis swaped Consensus opted for a bit more more of An aggressive tax and they decided They're going to sue the SEC they Effectively alleged that the SEC was Involved in regulatory overreach I mean No Sherlock it's worth noting though that This is separate to the letter that Consensus sent in early June which Basically asked the SEC to confirm that It would not investigate ethereum 2.0 for reference ethereum 2.0 refers to Ethereum after the merge basically the Proof of stake version of ethereum What's fascinating though is that the SEC confirmed to consensus that it was Not investigating ethereum 2.0 and that It would not be suing the company for Anything related to ethereum 2.0 however there seems to be no mention Of ethereum 1.0 and this is basically The proof of work version of ethereum And if you watched our video about Whether eth is a security you'll know That we speculate on the possibility That the sec's investigation into Ethereum's ecosystem focused on this
Proof of work period the sec's response To consensus seems to confirm this is The case it seems that the SEC is Investigating entities in ethereum's Ecosystem for Stuff related to Ethereum's early days and this is Significant as it could mean that the Ethereum foundation and consensus could Still be facing scrutiny and lo and Behold the SEC sued consensus late last Week alleging that the company had Violated Securities laws with its Metamask web 3 wallet specifically its Swap functionality notably the SEC also Alleged that metamask staking Services Constituted an unregistered security Offering something that we had of course Warned about in in previous videos the Silver Lining though is that this is Unlikely to have any Direct effects on Eth as eth is presumably not a security Per the sec's most recent response to Consensus more importantly The Landmark Ruling in the sec's case against Ripple Means that all secondary sales of eth I.E those that trade on exchanges are Not Securities anyways besides the fud Around the ethereum foundation Investigation April was jam-packed with Concerns around eth reaking and these Were raised by a coinbase report ahead Of igen layer's much awaited launch for Those who don't know igen layer is the Largest reaking protocol on ethereum as
For reaking itself it basically involves Using staked eth or liquid staked eth to Secure other blockchains and services And if this sounds risky well I mean That's because it is you see reaking is A brand new primitive and the Introduction of liquid reaking could Create un foreseen risks to eth and the Broader ethereum ecosystem speaking of Enan ler in May it was revealed that two Members of the ethereum foundation had Been affiliated with it and this of Course raised concerns around conflict Of interest as well as the possibility That igen layer had been integrated into Ethereum for profit despite those risks We just mentioned earlier to add insult To injury e Supply turned inflationary Again for the first first time since the Merge and this inflation has continued To this day and it basically suggests That not as many people are using Ethereum today as they once were Thankfully though ethereum got a big Break when the SEC suddenly approved all Pending spot ethereum ETF applications The story behind how this happened is Actually pretty wild in short Donald Trump hosted a Galla for holders of his Nft at maralago 2 weeks prior to the Sec's announcement and after the Galla He basically promised to be the most Quote Pro crypto president and this Turned crypto into a political issue the
Result seems to have been that the Biden Administration may have pressured the SEC into approving the spot ETFs this Despite its anti-crypto stuns the thing Is that there haven't been any other Really Pro crypto developments since Then and the SEC is is still on a war Path anyhow as some of you will know the Spot ETF approvals in May were just the First step of a two-step process for These ETF shares to list on exchanges The second step of the approval process Was expected to be completed already but It was delayed over the weekend and this Begs the question of why there was this Delay and the real answer could be Market conditions I mean at the time of Shooting this video the crypto Market it Isn't looking too hot specifically the Spot Bitcoin ETFs continue to experience Low inflows which is of course a bad Sign for the eth ETFs bad market Conditions could result in net outflows For the eth ETFs as soon as they list And this would of course result in very Bad optics for the asset managers who Issued them so there's the chance that Some or even all may continue to opt to Delay the listing until conditions Improve it's possible that this is Something that the asset managers have Even discussed with the SEC so if There's another unexpected delay in the Second step of the listing for whatever
Reason you probably know market Conditions are the real reason even if Market conditions improve before listing Outflows are are still likely and that's Simply because it's it's what happened With the spot Bitcoin ETFs there were Enormous net outflows mostly from those Who had arbitraged grayscales gbtc trust It could be a similar situation given That grayscale has also applied to Convert its eth trust into an ETF the Real question is what comes after the First few days of volatility and the Answer really depends on two real Conditions well one is of course the Market conditions but the other is how The ETF investors see eth and in turn This depends on who those investors are You see the Bitcoin ETFs suggests that a Large percentage of the eth ETF Investors could be retail and if this is The case then they could struggle to Gain traction and that's just because Well retail has been asleep at the wheel You see data from our friend Benjamin Carn suggests that retail crypto Interest is as low as in late 2018 an Institutional interest could Also be lower for the these eth products Visa Bitcoins and that's for a number of Reasons which I Shan get into here but Feel free to check out my recent video On eth ETF approvals and that will be uh Linked to in the top right for you guys
And this all ties into eth's price Action which is predictable given all of These ethereum updates you see eth Experienced an enormous rally leading up To the denune upgrade it hit a local top When it went live and then collapsed When all that that SEC fud came out then It experienced An Almighty God candle uh When the SEC suddenly approved its spot ETFs for anyone wondering that God Candle was ultimately caused by Everyone's favorite friend leverage you See everyone and their mom was basically Short eth given the SEC fud and when There was this surprise news about the ETFs this caused eth's price to pump Which caused short traders to get Squeezed and liquidated result in this Beautiful candle you see here the impact Of the ETF news is even more apparent on The E BTC chart which you'll know of Course measures the price of eth Relative to bitcoin eth BTC saw a huge Bump and many now believe that the drop To 044 eth per BTC was the bottom for This cycle and it could still be the Case the caveat though is that the Strength against Bitcoin doesn't Guarantee a pump in Fiat terms and Objectively speaking the crypto Market Is looking pretty bearish right now and While there could be some sudden Recovery rallies a massive move higher Just seems more unlikely and this is
Again because there's minimal retail Interest in crypto right now meanwhile The eth Wales seem to keep selling into This strength and this is evidenced by The almost daily flows of eth to Exchanges and like coinbase you see when Large amounts of eth are sent to Exchanges it typically signals an Intention to sell and well I mean there Have been a lot of exchange transfers Over the past few weeks additional Evidence for retail apathy can be seen On chain with the number of daily Transactions practically chopping Sideways over the past year and this can Partially be explained by the uptech Inactivity on layer 2os but but even These have been experienced in stagnant Transaction volumes taken together these Indicators suggest that another leg Lower could be on the cards for eth in The short term It's weekly chart Suggests it could fall as low as 2.5k in The coming weeks this is actually Consistent with a prediction made by Crypto VC firm mechanism Capital which Basically said that the ETF flows will Disappoint and eth will fall but this Assumes that there won't be another Short squeeze induced upside surprise After to the etf's list in this scenario Eth could easily Jump by double digits To its most recent local high of around 4.1k after that though eth could
Experience a sharp pullback and continue Consolidating until more marginal buyers Enter the market and these marginal Buyers could come sooner than expected If there's a financial crisis of some Kind as governments and central banks Will respond in the only way they know How to uh print some more money by the Way if you want to maximize your gains Regardless of the direction eth goes you Need to check out the coin Bureau deals Page it's got trading fee discounts of Up to 70% and sign up bonuses on the Best exchanges of up to $100,000 you see these deals are only Available to coin Bureau viewers and Won't be around forever so be sure to Take advantage of them while you still Can using the link in the description Now back to eth and that reminds me that E price action appears to be inversely Correlated to the yield on 10-year us Treasuries you see these are used as the Reference rate for long-term interest Rates in the economy and the 10-year Yield has been falling and this could be Contributing to e outperformance against Bitcoin in recent weeks if this trend Continues then eth and other altcoins Could continue strengthening against Bitcoin as lower long-term r leads to More risk on Behavior however this assumes that the Yields are falling because investors
Believe the FED will cut rates and not Because there's a flight to safety which Could be the case more about the Upcoming recession in the description Now how high or low eth goes depends Fundamentally on its upcoming Milestones You see although ethereum has an Elaborate road map consisting of Multiple fa phes I mean the merge Splurge surge etc etc the biggest Milestones have been those hard forks And the most recent one of these was of Course denune in March the next ethereum Hard Fork is called pectra and it's Expected to go live in either Q4 of this Year or potentially q1 of next year you See Petra will be bigger than Denon as It contains 20 eips or ethereum Improvement proposals whereas Denon only Contained And not only that but seven of Petra's Eips are considered significant whereas Just one was the case in Denon and that Was of course EIP 4844 the full list of eips included in Petra and what they can do for ethereum Can be found in the description and Shout out to the guys at bankless for Putting together such a comprehensive Article in our opinion uh the most Important eips included in pectra are EIP 700 2 EIP 7251 EIP 7524 and EIP 7702 try saying that fast 10 times in All seriousness though EIP 7002 and EIP
7251 relate to ethereum's validators the Former enhances functionality around Staking and raking and the latter Increases the maximum validator stake From 32 e to 248 eth to be clear though The minimum stake will stay say the same At 32 e it's just the maximum stake that Is been increased the rationale here is That it makes it easier for larger Entities to stake more eth without Having to spin up additional validators As you can imagine raising the maximum Stake has been seen as quite Controversial as it could result in more Validator Centralization of course the trade-off Is that more eth will be staked which Increases more security over the entire Ecosystem the next EIP is 7 524 and it Relates to ethereum's layer 2s it seems This EIP will further increase Scalability of layer 2os and if you Watched our video about the Denon Upgrade you'll know that it increased The scalability of layer 2os by as much As a 100 times now it's not immediately Clear how much EIP 7524 will improve Scalability in terms of metrics but if You happen to know please do drop a Comment down below now of all the eips Included in Petra EIP 7702 will probably Be the most beneficial for ethereum's Adoption you see without getting too Technical it makes it possible for
Regular wallets to act like smart Contract wallets under certain Conditions and this will of course lead To better user experience for daps but This assumes that these daps will Deploy On ethereum instead of its layer twos or A layer three or even a competing layer One and this of course brings me on to Everyone's least favorite section and uh That is of course the challenges faced By eth particularly in the next few Months you see the first challenge is Obviously regulation now we may be Mistaken but it doesn't look like the SEC is done probing ethereum's ecosystem Yet and it seems as if there is a small But real possibility that it could still Go after the likes of consensus for Stuff that's not related to swaps and Staking it's also easy to forget that Ethereum's access depends on its deps And protocols namely Defi and stable Coins and it looks like it's still Targeting defi as it's now targeting Consensus over such products it's still Pursuing Unis Swap and it could open new Investigations into other defi protocols A c liquid staken for example the SEC is Still clearly on a war path from our Perspective the only thing that will Really protect ethereum once and for all Is the passing of some reasonable and Common Sense regulation by Congress it's Something that's currently in the works
But whether these pending bills will Become laws uh before the election um That remains to be seen But the industry Is hopeful and this ties into the Second Challenge and that's development you see As we predicted ethereum is experiencing A growing number of critical bugs as it Evolves see it's easy to forget that Ethereum's Beacon chain is still a brand New block blockchain and it hasn't been As battle tested as many other crypto Blockchains out there and if you watched Our aention video about who controls Ethereum you'll recall that these asset Managers seem to be growing nervous with Ethereum's move fast and break things Approach with the likes of Black Rock Launching tokenized rwas on ethereum uh You can bet they don't want uh anything Broken come to think of it it almost Looks like asset managers are trying to Shape ethereum into some sort of de Facto blockchain for tokenized rwas even If this isn't explicitly the case the Institutions seem to be implicitly Placing ethereum itself into this rwa Niche and uh the community doesn't seem To have noticed yet and this relates to Ethereum's third Challenge and that's Narrative you see ever since it became Clear that the ETFs were a done deal Everyone has been asking how do you Explain eth to regular investors you see Bitcoin's narrative is pretty
Straightforward it's digital gold it's Easy enough for anyone to understand Even Larry think for example Jokes Aside Many crypto analysts have pointed out That ethereum lacks a straightforward Shall we say elevator pitch to potential New ETF investors based on a recent poll By Bloomberg ETF analyst Eric balunis Programmable money seems to be popular But only slightly so digital oil is Another one that crypto ogs will Remember and World computer is how Ethereum originally advertised itself But if we're honest though none of these Really stick and they also seem to be Inconsistent with the tokenized rwa box That asset managers seem to be putting Ethereum into given this fact the most Appropriate elevator pitch should Probably be decentralized Stock Exchange The problem with that though is that Ethereum is is so much more than just That it also reduces ethereum down to a Single use case which presumably Foreshadows the app chain ecosystem Predicted by Cosmos and this pertains to Ethereum's most acute challenge of them All and that's competition competition From its own ecosystem as well as other Layer ones as many had predicted the Consequence of denune is that it made Layer 2's exponentially more appealing Than ethereum itself and this has Reduced adoption of the base chain in
Theory this is fine because eventually There will be so many layer twos on Ethereum that settlement from these Layer tws will compensate for main chain Transactions in practice however layer Twos are competing with other layer ones Which which aren't subject to the same Fragmentation issues as ethereum's layer 2 ecosystem as we've seen layer ones Like salana are emerging as serious Competitors to ethereum and Next Generation cryptos like Aptos and sui Keep to be raising that bar over and Over the Paradox is that all ethereum Needs to do to compete is to well stop Trying to compete particularly at the Layer one level at the end of the day What sets ethereum apart from other Layer one smart contract blockchains is That it is the most secure and most EST Lished it needs to own this position and Stop trying to introduce bells and Whistles that that it doesn't really Need broader institutional adoption Comes with ethereum remaining secure and Stable with some luck the ethereum Community will listen but it's going to Be hard to act in a way that appeases Both the institutions that desperately Want to adopt ethereum on the one hand And the community that built it on the Other all things considered this is a Good problem to have and it's one that Ethereum will eventually solve and
That's why eth is the second largest Holding in most of our portfolios here At coin Bureau with Bitcoin being the Biggest as it should be and if you think About it though most of ethereum's Challenges are just growing pains pains That many other crypto projects wish They had including the so-called Ethereum Killers and that's all for for today's Video if you found it informative be Sure to smash that like button to let us Know and if you want to stay informed Subscribe to the channel and ping the Notification Bell as well and if you Want to inform others about what Ethereum has been up to be sure to share This video with them thank you all very Much for watching and I'll see you in The next one Nick out [Music]
