Yesterday, after news of Grayscale’s legal victory against the SEC spread, large purchases of Ethereum on Uniswap occurred.
According to reports from LookOnChain, as the price of ETH made a 4% leap, one whale bought 8,000 ETH in one fell swoop paying them a total of 13.6 million USDC.
Thus, the purchase would have been made at a price of $1,708, which is well above the $1,640 before the news broke.
Summary
The impact of Grayscale’s victory with the SEC and the purchases of Ethereum on Uniswap
The impact of the news of Grayscale’s legal victory against the SEC on cryptocurrency prices was instantaneous.
For example, yesterday the price of Bitcoin went from $26,000 to $27,700 in about two hours, while that of Ethereum in the same time went from $1,640 to $1,730.
In the next few hours BTC went as high as nearly $28,200, then dropped back down toward $27,400, while ETH went no higher than $1,740, then dropped back toward $1,720.
Right now Bitcoin is up 5.4% from yesterday, while ETH is up 4.3%.
But the real impact of Grayscale’s legal victory against the SEC may yet to materialize.
Indeed, the US District Judge in New York did not merely fault the SEC, saying that the denial of approval to issue Grayscale’s spot Bitcoin ETF was unjustified, but also basically intimated that the agency should approve it.
At this point, it is to be expected that all other similar applications will also be approved, if they have all the necessary requirements, including BlackRock’s.
Moreover, the biggest impact may not simply be that of the spread of the news of approval, but that resulting from the eventual success of these ETFs.
Indeed, since these are ETFs collateralized directly in BTC, if they were to have many buyers in the future, attracting a lot of capital, they would necessarily have to buy a lot of BTC directly on the spot crypto markets, driving up demand for purchases. This may indeed not necessarily happen, but it is also not impossible.
To date, it is unthinkable to be able to estimate what the actual market demand for these derivative products will be.
The price of Ethereum
In particular, purchases of ETH are somewhat surprising at the time when a potential future favorable to BTC is projected.
Indeed, Ethereum’s price trend has often followed Bitcoin’s, if only because the entire crypto market follows Bitcoin’s four-year halving cycle.
In addition to this, it should be mentioned that there are those who believe that Ethereum may perform better than Bitcoin in the future, from a market value perspective, so they may be more attracted to ETH rather than BTC.
Nevertheless, yesterday it was primarily Bitcoin itself that benefited from Grayscale’s news.
During 2023 the price of Ethereum at first had risen from $1,200 to over $1,600. Note that the very $1,600 touched in mid-January was then until yesterday a constant and important benchmark, despite peaks above $2,100 in April.
For example, Bitcoin’s 2023 annual high did so in July, while that of ETH stopped in April.
Until mid-March the reference price of ETH, around which the trend fluctuated, was precisely $1,600, which then became $1,800 until mid-August. As of 17 August the reference price had again fallen below $1,700, while as of yesterday it may have become just the latter.
As is clear from these numbers, after the boom of the first two weeks of January, the price of Ethereum during 2023 has remained relatively stable.
It is worth noting that ETH is now +43% since the beginning of the year, and -65% from the all-time high of late 2021, while Bitcoin is +65% since the beginning of the year and -60% from the highs.
Perhaps this is also why there are those who believe in greater growth potential for ETH than BTC in the near future.
