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The ongoing crypto bull market is advancing towards its next logical shift, where Ethereum is set to take the lead from Bitcoin. Three powerful tailwinds are converging to create a favorable updraft for Ethereum.
The typical pattern of a crypto bull market sees Bitcoin gain significantly in the early stages, followed by Ethereum once the bull market matures. By the end of the bullish mania, altcoins begin to surge.
Three critical factors are currently driving Ethereum’s gains against Bitcoin:
Spot Crypto ETFs Rapidly Accumulate Ether Coins
Spot Ethereum ETFs have amassed 5.432 million Ether coins, according to a Coinglass tabulation.
The SEC is expected to soon permit these ETFs to offer clients the staking yield of Ether, improving investment risk-return profiles.
The SEC has already allowed in-kind creation and redemption processes for crypto ETPs. Now, custodians can transfer ownership of their assets directly without needing cash intermediaries.
Ethereum Treasury Companies Are Buying Ether Coins
Some publicly listed companies are pivoting to a crypto treasury model, using equity and debt financing to acquire Ether coins and stake them for yield.
Companies like GameSquare Holdings, BTCS, BitDigital, The Ether Machine, and ETHZilla plan to boost returns by investing their Ether in DeFi, where yields typically exceed simple staking. Their stocks are expected to trade at a premium to the NAV of their Ether holdings.
Since June, top ten Ethereum treasury companies have acquired 1% of the total supply and may own up to 10% in the future.
Ethereum treasury companies have an advantage over spot ETFs by exploiting regulatory arbitrage, allowing them to enhance yields through DeFi participation, which ETFs cannot do.
Washington Has Become Favorable Towards The Crypto Sector
A third factor boosting Ethereum’s price is Washington’s benevolence. In June, President Trump signed the GENIUS stablecoin act into law.
The House has passed anti-CBDC and Clarity Acts, dividing regulatory jurisdiction between the SEC and CFTC and creating a consumer protection framework. Both are heading to the Senate.
President Trump also signed an executive order allowing 401(k) funds to invest in cryptocurrencies, private equity, real estate, and alternative assets.
Vitalik Buterin Is Again A Billionaire
Ethereum’s return to the $4,000 price level after an 8-month hiatus has restored Vitalik Buterin’s status as a billionaire.
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📚 Reading Comprehension Quiz
In a typical pattern of a crypto bull market, which asset is expected to gain significantly in the early stages?
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