What does the approval of the Grayscale Ethereum Trust mean? Bitcoin Trust is the answer
At around 9:30 last night, the price of the currency suddenly rose. The price of Bitcoin rose directly from around 11,200 US dollars to above 11,500 US dollars. ETH was even heading towards 400 US dollars. The market attributed the increase in the price of the currency to Grayscale investment company.
Grayscale is one of the biggest bright spots in the currency circle this year. If there is no Grayscale to spare no effort to buy Bitcoin this year, the price of Bitcoin will not remain above $10,000 most of the time in the second half of the year.
Last night, Grayscale officially tweeted that its application for Ethereum Trust registration to the US Securities and Exchange Commission (SEC) had been officially approved. So far, Grayscale Ethereum Trust has become its second licensed digital currency investment vehicle.
Where is the good news? Let's take Bitcoin as an example.
In February of this year, Grayscale’s Bitcoin Trust application to the SEC was approved for registration. In April, the Bitcoin Trust came into effect. Grayscale’s Bitcoin Trust also became the first digital asset tool that meets the standards of the US Securities and Exchange Commission.
And what happened to the market after the Bitcoin Trust went into effect? Grayscale began to aggressively purchase bitcoins on the market. As of late September, Grayscale's total holdings were 439,558, with a total size of $5.6 billion. The price of Bitcoin also rose from the bottom of $3,800 in March to above $11,000, and broke through $12,000 at its peak.
Although the rise in currency prices is not the result of the Grayscale family, the symbolic meaning of its purchase of Bitcoin is strong. The main factors for the rise and fall of bitcoin prices can be summarized as supply and demand. The influence of any other news, such as whether people will buy bitcoin in the future, is based on demand. When the purchase is greater than the sale, the currency price will rise, and vice versa. It fell.
And Grayscale just follows the most primitive supply and demand instinct, plays the role of a demander, and is also a role in promoting the rise of currency prices. If Grayscale does not buy these bitcoins, will other people buy these bitcoins? That's not necessarily the case.
And Grayscale can absorb Bitcoin so strongly, the Bitcoin Trust that came into effect in April is a decisive tool. We have said that Grayscale does not buy Bitcoin itself, but the investors behind it through Grayscale degree to buy. However, some large compliance institutions in the United States have considerable restrictions in this regard, one of which is that they will not invest in investment products that are not registered with the SEC.
The entry into force of the Grayscale Bitcoin Trust means the influx of a large number of institutional investors, and now the adoption of the Ethereum Trust can also achieve this goal - to attract more institutional investors to invest in Ethereum.
On August 6 this year, Grayscale submitted an application for the registration of the Ethereum Trust to the SEC, and the registration has now been passed, and the effective date is not expected to be too far away.
This is a long-term benefit for Ethereum. From the process of the formation of Bitcoin Trust, we can know that the formation of trust products will attract the attention of individual and institutional investors, increasing the demand for Ethereum currency. The more people buy, the higher the hope that the currency price will rise.
Grayscale now owns Bitcoin Trust and Ethereum Trust, so is it possible that other currencies will become Grayscale’s next trust target? To be honest, apart from these two currencies, I really haven’t seen other currencies that are so worth investing in.
Although the market attributed the rise in the price of the currency yesterday to the release of the news, everyone should not ignore the impact of the US stock market.
Yesterday, the news was announced at 9:30, and the price of the currency rose at 9:30, and the U.S. stock market officially opened at 9:30, and it still opened higher yesterday. Based on the recent rhythm of the currency market following the changes in the U.S. stock market, the current directness The impact on the U.S. stock market is not inferior to the news. Otherwise, after the U.S. stock market closed this morning, why would the price of Bitcoin fall after surging? After all, the excitement of the news is still there.
Going back to the market, the market peaked above $11,700 this morning, and then quickly fell back to around $11,400. This wave of market has little to do with the stimulus from yesterday’s news, and it is more like the funds in the market are making trouble.
First of all, look at the rhythm of the daily market. The current overall trend is more and more similar to the upper channel track we drew a few days ago. It is indeed running in an upward channel with a relatively large up and down range.
It is worth noting that today's market has not finished after all, and I am not sure what the situation will be first, but except for today, the daily line has already had six consecutive positives, and even a small correction today is normal. After all, after yesterday's surge, it is far away from the 5-day moving average, and it will be more solid if it steps back a little.
But as an extra reminder, if the current market is stepping back, don’t intervene on the way back, and intervene when you see the market rising again after the rebound. With such a wide upward channel, the stepping back may be like a swamp, and there will be uncertainties. How deep is it, if it is a spot user, it is okay, if it is a contract user, it is normal to have a liquidation.
We divided the market last night into three sections 1, 2, and 3. The first section is the normal rise stimulated by US stocks and news; .
In other words, only the first paragraph is normal, and the second and third paragraphs are the market quotations directed by the on-site funds. On the oscillating platform at the end of the market, the price is around 11560. It is reasonable to retrace $100 to reach the current price. The second and third paragraphs are completely unnecessary.
Since the momentum of DeFi has not been as great as before, this wave of ETH is not as strong as Bitcoin. Looking at the previous high position of the daily line, Bitcoin has already broken through, and even walked out of an upward channel with a relatively small slope. ETH just broke through last night. Reaching the position of the previous high, it looks more like a wide range shock than an upward trend.
For Ethereum, there is currently no reason to look weak. Of course, it mainly refers to the long-term direction, and short-term fluctuations are more elusive. Moreover, the current movement on the Ethereum public chain is relatively small and there are reasons for waiting for Ethereum 2.0 to come out. Compared with other currencies, only Ethereum can keep up behind Bitcoin. In some respects, the potential of Ethereum is even greater. Greater than Bitcoin, it is a currency worth owning for a long time.
