Proof of Stake
Ethereum + Altcoins: A Change in the Winds?
BitOoda Ethereum Market Research, 7/14/23
Vivek Raman
Although most of 2023 has been focused on Bitcoin and BTC dominance, the last week (more specifically, yesterday) marked a deviation from the Bitcoin-only trend, which could signal a potential change in the winds for the crypto industry in the US. At a high level, without getting into legal nuance, a landmark decision was reached in US District Court in the multiyear case between Ripple and the SEC. While the ruling was complex and the legal interpretation is beyond the scope of this markets-focused piece, the highlevel takeaway is that the XRP token (Ripple’s native token) being sold on public exchanges may not have violated federal securities laws.
Although this ruling marks a potential beginning, rather than an end, to the clarification of how the crypto industry can operate in the US, we saw a major relief rally in altcoins – namely major altcoins that had been named securities in SEC actions over the past few months. The most notable of these altcoins – which we will cover in this report – are Solana (up 19% and then as much as 23% the following trading session), and Polygon’s token MATIC (up 18%. These tokens likely outperformed the rest of the market due to mean reversion from selling pressure from SEC actions classifying both as securities. Indeed, platforms like Robinhood de-listed both tokens and sold on behalf of customers upon the SEC actions. Although yesterday’s ruling was favorable for nonBTC crypto tokens, it was not necessarily a watershed win, and there could be ongoing debate, appeals, and volatility around altcoins and their status as securities or non-securities. On a more benign note, the major crypto assets – BTC and ETH – were up 3.5% and 7% respectively following the XRP ruling. Both have seen lower volatility than altcoins and are considered “blue chip” – hence the dampened moves higher.
Another bellwether metric for altcoins is the ETH / BTC ratio, which moved marginally higher after yesterday’s news, from the 0.061 level to ~0.064. We will examine the significance of this ratio in the report as well. Ultimately, the question is how much of a paradigm shift occurred with yesterday’s decision? Many in the crypto space are calling for the onset of a new bull market, while the more nuanced analysis points to an ongoing court and regulatory process that could take years. The answer may lie in the middle – yesterday’s action highlighted inconsistency in how crypto is treated in the US, which will need to be addressed by Congress. Therefore, a call to action for comprehensive crypto legislation may gain steam. However, this process may take longer than most are hoping.
In the meantime, the Ethereum ecosystem remains robust. Although we take a detour this week from exploring the technical advancements and new applications that use ETH, the network continues to attract new projects, new scaling mechanisms, and additional Lindy effects as the base infrastructure for the global digital economy.
Unlock exclusive insights with our cutting-edge digital finance platform. Gain access to next-gen data analytics and digital asset products crafted with applied science. Subscribe now to stay ahead of the curve.
Although most of 2023 has been focused on Bitcoin and BTC dominance, the last week (more specifically, yesterday) marked a deviation from the Bitcoin-only trend, which could signal a potential change in the winds for the crypto industry in the US. At a high level, without getting into legal nuance, a landmark decision was reached in US District Court in the multiyear case between Ripple and the SEC. While the ruling was complex and the legal interpretation is beyond the scope of this markets-focused piece, the highlevel takeaway is that the XRP token (Ripple’s native token) being sold on public exchanges may not have violated federal securities laws.
Although this ruling marks a potential beginning, rather than an end, to the clarification of how the crypto industry can operate in the US, we saw a major relief rally in altcoins – namely major altcoins that had been named securities in SEC actions over the past few months. The most notable of these altcoins – which we will cover in this report – are Solana (up 19% and then as much as 23% the following trading session), and Polygon’s token MATIC (up 18%. These tokens likely outperformed the rest of the market due to mean reversion from selling pressure from SEC actions classifying both as securities. Indeed, platforms like Robinhood de-listed both tokens and sold on behalf of customers upon the SEC actions. Although yesterday’s ruling was favorable for nonBTC crypto tokens, it was not necessarily a watershed win, and there could be ongoing debate, appeals, and volatility around altcoins and their status as securities or non-securities. On a more benign note, the major crypto assets – BTC and ETH – were up 3.5% and 7% respectively following the XRP ruling. Both have seen lower volatility than altcoins and are considered “blue chip” – hence the dampened moves higher.
Another bellwether metric for altcoins is the ETH / BTC ratio, which moved marginally higher after yesterday’s news, from the 0.061 level to ~0.064. We will examine the significance of this ratio in the report as well. Ultimately, the question is how much of a paradigm shift occurred with yesterday’s decision? Many in the crypto space are calling for the onset of a new bull market, while the more nuanced analysis points to an ongoing court and regulatory process that could take years. The answer may lie in the middle – yesterday’s action highlighted inconsistency in how crypto is treated in the US, which will need to be addressed by Congress. Therefore, a call to action for comprehensive crypto legislation may gain steam. However, this process may take longer than most are hoping.
In the meantime, the Ethereum ecosystem remains robust. Although we take a detour this week from exploring the technical advancements and new applications that use ETH, the network continues to attract new projects, new scaling mechanisms, and additional Lindy effects as the base infrastructure for the global digital economy.
Purpose
This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda.io.
Analyst Certification
Vivek Raman, denoted by an “AC” on the cover of this report hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships.
Conflicts of Interest
This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation.
General Disclosures
Any information (“Information”) provided by BitOoda Holdings, Inc., BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or on or throughhttp://www.bitooda.io/, including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such.BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties (express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information.
The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance.
Ooda Commodities, LLC is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets.
BitOoda Technologies, LLC is a member of FINRA.
“BitOoda”, “BitOoda Difficulty”, “BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc.
Copyright 2023 BitOoda Holdings, Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda.
Although most of 2023 has been focused on Bitcoin and BTC dominance, the last week (more specifically, yesterday) marked a deviation from the Bitcoin-only trend, which could signal a potential change in the winds for the crypto industry in the US. At a high level, without getting into legal nuance, a landmark decision was reached in US District Court in the multiyear case between Ripple and the SEC. While the ruling was complex and the legal interpretation is beyond the scope of this markets-focused piece, the highlevel takeaway is that the XRP token (Ripple’s native token) being sold on public exchanges may not have violated federal securities laws.
Although this ruling marks a potential beginning, rather than an end, to the clarification of how the crypto industry can operate in the US, we saw a major relief rally in altcoins – namely major altcoins that had been named securities in SEC actions over the past few months. The most notable of these altcoins – which we will cover in this report – are Solana (up 19% and then as much as 23% the following trading session), and Polygon’s token MATIC (up 18%. These tokens likely outperformed the rest of the market due to mean reversion from selling pressure from SEC actions classifying both as securities. Indeed, platforms like Robinhood de-listed both tokens and sold on behalf of customers upon the SEC actions. Although yesterday’s ruling was favorable for nonBTC crypto tokens, it was not necessarily a watershed win, and there could be ongoing debate, appeals, and volatility around altcoins and their status as securities or non-securities. On a more benign note, the major crypto assets – BTC and ETH – were up 3.5% and 7% respectively following the XRP ruling. Both have seen lower volatility than altcoins and are considered “blue chip” – hence the dampened moves higher.
Another bellwether metric for altcoins is the ETH / BTC ratio, which moved marginally higher after yesterday’s news, from the 0.061 level to ~0.064. We will examine the significance of this ratio in the report as well. Ultimately, the question is how much of a paradigm shift occurred with yesterday’s decision? Many in the crypto space are calling for the onset of a new bull market, while the more nuanced analysis points to an ongoing court and regulatory process that could take years. The answer may lie in the middle – yesterday’s action highlighted inconsistency in how crypto is treated in the US, which will need to be addressed by Congress. Therefore, a call to action for comprehensive crypto legislation may gain steam. However, this process may take longer than most are hoping.
In the meantime, the Ethereum ecosystem remains robust. Although we take a detour this week from exploring the technical advancements and new applications that use ETH, the network continues to attract new projects, new scaling mechanisms, and additional Lindy effects as the base infrastructure for the global digital economy.
Purpose
This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda.io.
Analyst Certification
Vivek Raman, denoted by an “AC” on the cover of this report hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships.
Conflicts of Interest
This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation.
General Disclosures
Any information (“Information”) provided by BitOoda Holdings, Inc., BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or on or throughhttp://www.bitooda.io/, including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such.BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties (express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information.
The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance.
Ooda Commodities, LLC is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets.
BitOoda Technologies, LLC is a member of FINRA.
“BitOoda”, “BitOoda Difficulty”, “BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc.
Copyright 2023 BitOoda Holdings, Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda.
In this report, we offer a variety of institutional frameworks to analyze ETH, alongside BTC, as a part of a diversified crypto portfolio. Bitcoin has transcended into the mainstream, accelerated by the acceptance of spot BTC ETFs. ETH, while more complex, has unique use cases that could position it as a premier crypto asset alongside BTC.