Trump’s DeFi Platform Increases Ether Holdings Threefold

The decentralized finance (DeFi) platform linked to US President Donald Trump significantly increased its Ether (ETH) holdings over the past week as the cryptocurrency’s price fell below $2,000.

Trump’s World Liberty Financial (WLFI) DeFi platform tripled its Ether holdings in the past seven days as ETH dropped below the $2,000 psychological threshold, falling to $1,991 on March 4.

According to data from Arkham Intelligence, WLFI now holds about $10 million more in Ether than a week ago. In addition to the Ether acquisition, the platform also bought $10 million worth of Wrapped Bitcoin (WBTC) and $1.5 million worth of Movement Network (MOVE) tokens.

Currently, WLFI is facing over $89 million in unrealized losses across the nine tokens it has invested in, according to data from Lookonchain.

This acquisition came during a period of increased market volatility and rising investor concerns, driven by both macroeconomic factors and crypto-specific events, including the $1.4 billion Bybit hack on February 21.

The recent dip has caused a “broader flight to safety in crypto markets,” with investors seeking safer assets that offer more predictable returns, such as tokenized real-world assets (RWA).

WLFI’s “Macro Strategy” Fund Boosts Ethereum and Crypto Investments

WLFI’s recent digital asset investments follow the launch of its “Macro Strategy” fund, which targets Bitcoin, Ether, and other cryptocurrencies.

In a February 11 announcement, the fund’s aim was to strengthen these projects and expand their roles in the financial ecosystem:

“Together, we are building a legacy that bridges the worlds of traditional and decentralized finance, setting new standards for the industry.”

The fund intends to diversify the platform’s holdings across a spectrum of tokenized assets to provide a “resilient financial system” and invest in emerging opportunities within the DeFi landscape.

The announcement came after widespread speculation by Ethereum co-founder Joseph Lubin that the Trump family would establish a “giant business” on Ethereum.

“Based on what I know, the Trump family will build one or more giant businesses on Ethereum,” Lubin wrote. “The Trump administration will do what is good for the USA, and that will involve ETH.”

Lubin suggested that the Trump administration might eventually integrate Ethereum technology into government activities, similar to its current use of internet protocols.

Ether currently makes up the largest share of WLFI’s holdings, followed by $14.9 million worth of WBTC and $13.2 million worth of USDT stablecoin.

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The post WLFI Increases Ether Holdings Threefold in a Week Amid Market Decline appeared first on Coin Engineer.

The U.S. Federal Reserve’s interest rate decreases, which indicate a change toward more supportive monetary policy, have mostly fuelled the price surge. Consequently, on September 24 the S&P 500 reached an all-time high. Further driving Ether’s price was the decline in the S&P Global Manufacturing PMI on September 23, which begged questions about the state of the economy.

Investors seeking safer government-backed assets have driven yields on the U.S. 2-year Treasury note down to a 24-month low, therefore favoring limited assets like Ether. Ether is still down 33% over the previous four months, following the poor debut of a spot exchange-traded fund (ETF) that resulted in $684 million in outflows, notwithstanding the present surge.

Among the $2.77 billion in open interest for Ether options are $0.95 billion in put (sell) options and $1.82 billion in call (buy) options. Bulls seem to have the upper hand with $1.47 billion of call options aimed at pricing of $2,700 or higher. But if Ether doesn’t reach that price by Sept. 27, these options will expire worthless, so providing bears a possible benefit.

Demand for Ether’s smart contract processing features has soared as its price grows; a 15% increase in transactions on the Ethereum network has resulted in an average transaction fee increase. Ether’s supply has expanded meantime; 58,856.4 ETH added in the past 30 days reflects a 0.6% yearly inflation rate. Along with competition from sites like Solana and BNB Chain, this surge in supply begs questions about Ether’s capacity to surpass $3,000.

Ether bulls will have to raise the price over $2,700 if the $2,600 support level is broken in order to significantly advantage from the options expiry approaching; bears may lock in a $100 million win.

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The information in this article does not provide any investment advice.

The post Ether Eyes $2,700 Amid Upcoming $2.78 Billion Options Expiry appeared first on Coin Engineer.

Analyzing the SEC’s Decision 

Rising political pressure from the Democrats to persuade swing voters in the run-up to the U.S. election in November is one of the main hypotheses behind the Securities and Exchange Commission’s abrupt shift in attitude toward spot ETFs in May.

However, Bernstein analysts Gautam Chhugani and Mahika Sapra found the story to become less convincing after President Joe Biden vetoed the Staff Accounting Bulletin (SAB) No. 121 repeal bill in a June 3 report.

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The analysts stated the “SEC knew it was in a corner on the ETH ETF“ since it featured the same regulatory set-up as the spot Bitcoin ETFs, including the same spot and futures correlation and multiple live Ether futures contracts on the Chicago Mercantile Exchange, which suggested Ether’s commodity status.

“Most likely, the SEC avoided a legal conflict by adopting a more pragmatic approach.” Still, the Bernstein analysts said, “Great outcome for the industry.”

Industry Reactions and Future Projections about Ether

Bernstein said it has spoken with some candidates for spot Ether ETF who were “equally surprised” at the last-minute SEC clearance.

None anticipated an Ethereum ETF approved by the SEC. “We interpreted the SEC personnel’s radio silence leading up to the clearance date as likely rejection. However, we instructed ETF issuers to refile the 19b-4s within 24 hours, 4 days before the approval deadline.”

Though there “should be pent-up demand from the same participants as the Bitcoin ETF,” Bernstein, like other analysts, anticipates the spot Ether ETF flows to be far less than Bitcoin’s.

In the run-up to the release, the company anticipates Ether to show strong price movement.

Officially authorized by the SEC are 19b-4 applications for spot Ether ETFs from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise on May 23.

Currently awaiting the S-1 registration statements to be signed off by the SEC, the eight authorized Ether ETF issuers might have anywhere between weeks and months.

The post Bernstein Analysts Dismiss Political Pressure as Reason for SEC’s Ether ETF Approval appeared first on Coin Engineer.

Potential Implications for Other Tokens

Digital asset lawyer Justin Browder suggested that if Ether ETFs receive S-1 approval, the debate on whether ETH is a security would be conclusively settled. “If Ether ETFs get S-1 approval—the final piece needed for them to begin trading—then the debate is over: ETH is not a security” Browder asserted. Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, took this further, proposing that this recognition of Ether as a commodity could extend to other digital assets. “ETH is a commodity, even with its current attributes. That means we can extrapolate to A LOT of other projects what elements matter in security,” Cochran explained, suggesting that many projects might now be viewed as commodities.

Staking and Regulatory Actions

Despite this positive outlook for Ether and potentially other tokens, analysts warn that the SEC may still target actors involved in staking Ether. Seyffart expressed, “I think they will] try to thread this needle and say ETH itself, they’re not going to call a security but staked ETH might be a security […] and I don’t believe they’re going to give that up any time soon.” Digital asset lawyer Joe Carlasare echoed this sentiment, noting that the SEC could continue to pursue individual actors and staking services even with the ETF approval.

The SEC’s recent actions support this caution. In April, Ethereum infrastructure firm Consensys received a Wells notice from the SEC, focusing on Metamask’s trading and staking services. Finance lawyer Scott Johnsson also pointed out that the SEC’s approval order for Ether ETFs did not explicitly confirm Ether’s non-security status, indicating that the regulatory body might still address this issue in the future.

The SEC approved 19b-4 applications from several major firms, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise, to issue spot Ether ETFs on May 23. However, these issuers need the SEC to sign off on their S-1 registration statements before launching their ETFs. Notably, Hashdex was the only issuer that did not receive approval on the same day, underscoring the ongoing complexities in the regulatory landscape.

The post SEC Approves Spot Ether ETFs, Raising New Debates on Securities and Staking appeared first on Coin Engineer.