Altcoins
Spot Ethereum ETF Approval Signals Altcoins Will Eventually Catch Up to Wall Street, CEO Says
On July 23, Anthony Pompliano, founder and CEO of Professional Capital Management, appeared on CNBC’s “Squawk Box” to discuss the recent approval of spot Ethereum ETFs and its implications for the cryptocurrency industry.
Pompliano noted that the SEC’s approval of Ethereum spot ETFs from financial giants such as 21 Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, and Invesco Galaxy marks a significant milestone in the cryptocurrency space. He noted that these ETFs are set to begin trading today, signaling a major development that extends beyond Bitcoin, which previously dominated the cryptocurrency spot ETF landscape.
Pompliano reflected on the massive success of spot Bitcoin ETFs, noting in particular the strong net flows into the BlackRock Bitcoin ETF (IBIT), which he said saw over $500 million in inflows yesterday alone. He noted that while the narrative of Bitcoin as “digital gold” is simple and compelling, the story of Ethereum is more complex. He said that Ethereum is often seen as a technology platform rather than simply a cryptocurrency, making its narrative less clear-cut and its reception potentially less enthusiastic.
Despite this, Pompliano highlighted a key benefit of spot Ethereum ETFs: diversification. He mentioned that Wall Street investors often seek a diversified portfolio, and the inclusion of Ethereum alongside Bitcoin allows for a balanced investment approach. He suggested that this could lead to a significant, though perhaps not overwhelming, influx of funds into spot Ethereum ETFs.
Pompliano expressed skepticism about the potential impact of Ethereum spot ETFs on the cryptocurrency’s price, especially compared to Bitcoin. He noted that Ethereum spot ETF holders will not have access to staking rewards, which are a significant aspect of Ethereum’s value proposition. As a result, he said that flows into Ethereum ETFs may not match the scale seen with Bitcoin.
However, Pompliano believes that the approval of Ethereum spot ETFs is a broader signal for the market. He said it indicates that a broad range of altcoins could eventually make their way to Wall Street, meaning that the SEC will likely approve spot ETFs for more altcoins in the future. Pompliano noted that this could transform the cryptocurrency market from a niche segment to a more integrated part of the traditional financial system.
Addressing competition from Ethereum, Pompliano noted that while Ethereum is a pioneer in the smart contract space, it now faces significant challenges from other blockchains that offer faster and cheaper transactions. He spoke about his investment decisions, revealing that he sold all of his Ethereum investments last year in favor of Solana, which he believes has more momentum and growth potential.
Pompliano said Solana’s decentralized trading volume has dented Ethereum’s market share, highlighting the competitive nature of the blockchain industry.
Pompliano also discussed Bitcoin’s recent price movements, highlighting its sensitivity to geopolitical events and market uncertainties. He cited instances such as the assassination attempt on former President Trump and President Biden’s decision not to seek reelection, where Bitcoin’s price reacted sharply to the news. He said this behavior underscores Bitcoin’s evolving role as a financial asset that responds to global events, blurring the lines between the cryptocurrency industry and traditional finance.
Featured image via Plumage