It's the greatest source of suffering in Crypto today the chain is a ghost town Cannibalized by its own offspring Transaction fees are disturbingly low And sentiment it's in the dumps Meanwhile the coin has got us looking at Our portfolios and asking is this thing Even on it's time to ask some hard Questions about ethereum is eth Suffering from seasonal allergies or is It terminal have eth Maxi skipped from Pre-rich to post-r without sto in the Middle and are we all about to become Poor in Q4 if you want answers this is a Video you do not want to miss happy Birthday happy birthday eth downtrend Believe it or not but eth has been Falling against Bitcoin ever since the Merge in September 2022 and that means Our beautiful baby downtrend is 2 years Old congrats Bitcoin Maxis you must be So proud all right I'm sorry this is no Time for jokes at the time of making This video ether is on life support and The ethereum community needs our prayers More than ever the launch of the spot Eth ETFs in July turned into a sell the News event with serious legs in the First two weeks of trading alone eth Collapsed by 44% against the dollar in Eth BTC terms this crash carved a wick To 0.367 marking a 1,23 day low meanwhile ethereum chain
Metrics have sunk to lows almost Unprecedented this decade many of us Prayed for the day that fees on ethereum Main net would be cut down to reasonable Levels but my God we didn't mean like This transaction fees are currently sub Oneu and ethereum's daily revenue below $500,000 you have to troll through years Of historical data to find any other Period with lows just like this even in The depths of the crypto winter of 2022 Gas was at least one gay and revenue Above a million dollar per day Anecdotally we can tell you that Sentiment around ethereum is Gastly I Mean people have resorted to begging Vitalic to say something nice about eth So you have to wonder if this isn't the Bottom what is when will the pain end or Is ethereum cooked or good to help us Answer these questions we're going to Borrow from a recent analysis from Bitfinex it shines a light on the Performance of eth and it's new spot ETFs and reminds us that we're not going Through this alone you can think of Today as your first day at eth holders Anonymous I'll go first hello everyone My name is Nick and I've got an eth Problem now if you want to know how much Of my portfolio is in eth I'd love to Invite you to join the coin Bureau Club You'll be able to see all the cryptos That the team and I are holding and keep
Updated whenever we make changes to our Portfol folios of course this is just One sliver of the content you'll find in The coin Bureau Club our members also Enjoy exclusive weekly video reviews of Promising small cap cryptos and private Discord channels where we share daily Market updates and insights if you're Interested check out the link in the Description below bit finexus analysis Highlights the impact spot ETFs in the US have had on eth uh news flash they Have proven to be very bearish indeed Now before we look at the ETFs in Aggregate we have to address grayscale Whose ETFs have had a very uh unique Impact on the crypto Market this year And to understand how and why let's turn To grayscales gbtc for a moment gbtc Launched as a trust in 2013 and for more Than a decade it was basically the only Show in town for institutional investors Seeking indirect exposure to bitcoin as A trust gbtc shares were not traded on Exchanges but via relatively illiquid OTC markets gbtc also lacked a Redemption mechanism meaning you Couldn't cash out to Fiat or Bitcoin Through the trust itself instead you Just had to find another investor to buy Your shares and if demand for gbtc was Not particularly High shares tended to Trade at a discount relative to the net Asset value that they represented for
Example after the collapse of FTX in 2022 gbt TC traded at a discount of Almost 50% to its net asset value you Can see discounts like these presented Big opportunities for hedge funds who Were confident that gbtc would Eventually be converted into an ETF for Reference grayscale had been trying to Accomplish this since 2016 ETFs offer Much greater liquidity and ease of Trading are better at tracking the price Of the underlying assets and can be Redeemed for cash now if you could buy Gbtc at a massive discount wait for it To become an ETF and then sell into the Hype on launch day on a highly liquid Exchange at a price that reflects its Underlying assets well there's a pretty Good trade for you on January 11th this Year gbtc hodler prayers were answered And the trust was finally converted into An ETF a gbtc began trading on exchanges On the same day as 10 brand new spot Bitcoin ETFs from the likes of Black Rock Fidelity and others the spot Bitcoin ETF Market was immediately very Crowded but gbtc stood out like a sore Thumb for two reasons firstly it was the Only new ETF to have pre-existing Holders and hedge funds who were ready To smash the sell Button as soon as Trading began prominent among these Sellers were the bankrupt exchange FTX And lender Genesis who sold their gbtc
Shares in order to pay creditors the Second reason is fees in anticipation of Hot competition from its 10 new Competitors grayscale cut its gbtc fee To 1.5% but the problem was those Competitors were locked in a race to the Bottom well below 1% some were even Offering fees under 0.2% for whatever reason grayscale was Unwilling or unable to compete with Predictable results gbtc rarely stole The show in January despite strong Inflows enjoyed by the 10 other ETFs and Exit from gbtc caused the group in Aggregate to see net outflows for more Days than not in the first two weeks After the ETF launch day grayscale sent 100,000 Bitcoin to exchanges and Bitcoin Dumped by 21% there even was a period in That first month of trading when gbtc Assets under management were falling by More than $1 billion per day the pace of Gbc's outflows decreased over time but It continued to be a significant source Of selling pressure by mid April gbtc Holdings had been reduced by half down From around 600,000 Bitcoin on ETF Launch day it wasn't until May that gbtc Saw its first day of net inflows and Only after having recorded 17.5 billion dollar in net outflows Since launch now you only have to Glimpse at the Bitcoin chart on higher
Time frames to see that gbtc will barely Be a footnote in the story of Bitcoin This year but that's really just test Estimate to the demand for Bitcoin Specifically now what would happen if You had a crypto with a massive source Of cell pressure like Gbtc but without the demand to absorb it Well this brings us back to eth one of The new spot eth ETFs that started Trading in July was grayscale's not so New ethereum trust or eth E which it Launched back in 2017 and before you ask Yes it did have the highest fees by far So just like in January one of the ETFs Launching had a ton of sellers who were Looking for an exit on day one as with Gbtc these were institutional investors Who had been holding relatively illiquid Shares that could only be sold OTC and Often at a discount to the value of the Underlying eth the approval of the eth ETFs suddenly made these shares highly Liquid and tradable on exchanges Meanwhile as the July 23rd launch day Approached eth rallied into a resistance Level of around $3,550 on The Daily time frame and this Proved to be a second lower high formed Since the yearly high back in March in Other words you had a relief rally Within a bearish medium-term trend it's Not the kind of price action that's Begging you to open a long position add
To this the memory of Bitcoin dumping 21% back in January and you had every Reason to be bearish going into the Launch of the E ETFs so it was no great Shock to see eth dumping in the first Few days of trading a week after the Launch eth was down around 9% now Turning to the ethusd Chart you'll Notice that eth actually dumped a heck Of a lot more after that it fell by 40% Between the ETF launch on July 23rd and August 5th however this cannot be Attributed to eth e selling alone Because this larger move was the result Of a macro event that affected the Entire crypto market and this was the Bank of Japan's rate hike and subsequent Unwinding of the Yen carry trade and if You want to learn what that was all About uh check out this video over here Now around the same time that this was Happening market makers including jump Trading winter mute and flow Traders Also collectively sold around 213,000 e this combination of bearish Factors coincided with typically low Summer trading volumes and thin Liquidity which exacerbated the dump in E price of course grayscales eth e was Also experiencing significant outflows At this time and that certainly didn't Help eth but just bear in mind that eth Dropping by 40% in under two weeks was Not entirely gry scale's fault with that
Said uh let's take a look at how the eth ETFs have actually performed so far so Far eth e has mimicked the performance Of Gbtc only worse as bit fex recently Pointed out the rate of eth E outflows Is significantly faster than outflows From gbtc post launch on the 20th day of Trading Post launch gbt's assets under Management had fallen by around 24% Whereas eth's assets under management Had fallen by 30% meanwhile the other Eth ETFs were met with lukewarm Reception earlier this year spot Bitcoin ETF inflows provided rocket fuel for Bitcoin to Rally to new all-time highs Much sooner than had been expected and This was always going to be a tough act To follow but hopes were still high that Eth ETFs would enjoy comparable influx Of tradire investors in the medium to Long term this institutional interest in Eth May well materialize but after their First month of trading the eth ETFs were A net negative with outflows around $500 Million by contrast bitcoin's spot ETFs Had recorded $5 billion in net inflows One month after their launch the good News is that the net outflows are a Result of eth e weighing down the rest Of the pack and not the market telling Us that it hates e ETFs per se the non- Grayscale ETFs added $2.1 billion worth Of Assets in their first month but they
Just couldn't keep Pace with the Outflows from ethe which reached $2.5 Billion on the other hand when you Consider that Bitcoins spot ETFs managed To absorb all of gbtc cell pressure and Still in the their first month $5 Billion in the green well it does raise Questions about demand for eth and its ETFs from an optimistic perspective Weaker demand for eth ETFs is in part Due to a flaw of the ETFs rather than Eth itself and that's because thanks to The SEC the eth ETFs do not have a Staking mechanism being able to stake Eth for yield is one of eth's main Selling points so this makes the eth ETFs a little disappointing and more Importantly it does little to set them Apart from Bitcoin ETFs okay let's put The ETFs aside for a moment if we look At eth's performance versus the overall Crypto Market there's really no way to Sugarcoat it eth has been suffering for A long time now and you only need to Look at the eth BTC chart to see this It's not a pretty site and like I said e Has been falling against Bitcoin for 2 Years and is wanting disrespecting Support levels bulls have been calling The bottom for many months now but eth Has betrayed them every single time Sentiment has become so bad that members Of the community on crypto Twitter have Resorted to begging vitalic to start
Bull posting he granted their request But not even this neat pick of a bull Wearing a sign that says ethereum is Good could make eth rally The Vibes Worsened in late August when look Onchain alerted its Twitter followers to A transfer of 35,000 e worth around $94 Million by the ethereum foundation to Kraken and this didn't go down well in The community one commenter addressed Ethereum's official account demanding Quote Financial disclosers or GTFO at Ethereum seriously how on Earth is this An opportune time to do these kind of Movements without so much as a peep the Foundation's executive director Aya Mayag guchi responded that quote this is Part of our treasury management Activities EF has a budget of around $100 million per year which is largely Made up of Grants and salaries and some Of these recipients are only able to Accept in Fiat she also indicated that The foundation intended to sell Incrementally rather than dumping all 355,000 eth at once now eth did fall by Another 15% within the first 3 days of The ethereum foundation's transfer but We don't think this dump was directly Caused by the foundation selling $94 Million is A Drop in the Ocean when Compared to the global trading volume For eth which rarely Falls below $5 Billion per day taking this into account
The negative reaction on social media to The foundation's eth transfer probably Had a greater impact on the market than Any actual selling by the foundation Itself the transfer caused a lot of Noise online but the sad truth is that Dev selling is the least of E's problems The real reasons for e's Underperformance in the long term are a Story that's all too familiar ethereum Gave the world smart contracts and in Doing so birth web3 daps Defi and so on It revolutionized crypto and turned eth Into a $300 billion market cap Juggernaut in the process but it's also Almost 10 years old and it feels like it Too we have had a slick quick and cheap Ethereum killer in salana for 4 and a Half years now and salana has been out For so long we even have multiple Slicker quicker and cheaper salana Killers so like ethereum killer Killers wait is that bullish for Ethereum you know what never mind Ethereum's ability to keep up with the More performant competition is seriously Constrained by its Tech the devs can't Just install a patch that will make it As smooth as a blockchain that was born Yesterday it doesn't work like that Instead we have to rely on countless Layer twos that compete both with each Other and the main chain for users and Liquidity the result is a race to the
Bottom that's brought Layer Two Transaction fees close to zero and this Is great but for the marginal buyers who We are all hoping will return to crypto In the droves it's rather a lot to take In this is especially the case when you Could just download Phantom and have a Good time without ever having to learn What a layer two is let alone how to Bridge to one the bull case for l2s is That they speed and low cost will Facilitate Mass adoption there will be So many new users and transactions that The low fees will generate decent Revenue and by onboarding millions of New users to the broader ethereum Ecosystem demand for eth will trickle Down from the l2s this may happen one Day but the eth chart suggests it hasn't Happened yet now I could keep reeling Off explanations for E weak price action All day long but there is little Discussed Silver Lining here and that is The fact that narrative tends to follow Price and not the other way around this Doesn't mean that narratives don't hold Weight it's true that ethereum is almost 10 years old and has many newer Competitors it's true that layer tws are An awkward way to scale your product and It's true that grayscales ETF outflows Have eclipsed all of the inflows of Other ETFs combined but it's also true That one big green candle in the future
Could make all of these facts seem Completely irrelevant whether it's this Year or next crypto will rally a hard Again and eth will too yes it's unlikely To outperform other newer shinier old Coins but I wouldn't sell it Short right that's all for today folks Let us know in the comments down below How eth will perform in Q4 now smash the Like if you're looking forward to Ethereum's Redemption Arc and don't Forget to subscribe and turn your bell Notifications on as well so you don't Miss another upload as always thank you Very much for watching and I'll see you Next time this is Nick signing off [Music]
