What will Ethereum ETFs mean for your favorite altcoin projects? Some will clearly benefit, but others — like Solana — may lose.
) price action has surprised just about everyone after the unexpected news that the application process was moving forward for spot Ether exchange-traded funds . Most investors had well and truly resigned themselves to the fact that the Securities and Exchange Commission would almost certainly reject the applications.of an approval from 25% to 75%, ETH experienced the kind of daily price surge we hadn’t seen for quite some time.
Bloomberg ETF analysts in May increased the odds of a spot Ether ETF approval from 25% to 75%. Source: X The projects that offer the most functional utility will benefit the most if this happens. For example, it would be good news for decentralized exchanges, like SushiSwap or Balancer, as well as borrowing/lending protocols, like Aave and Compound.) — may struggle to outperform in a post-ETH ETF environment. Sure, the likes of Solana will probably still hit all-time highs in this cycle, since a spot ETH ETF creates some much-needed clarity for decentralized blockchains.
Following the approval of an ETF, we could see many more projects building on Ethereum. Some may even transition from L1s to Ethereum rollups, seeing this as a more lucrative development direction – like Celo, which recently decided to migrate to Ethereum using OP Stack.With all this development, we could see a raft of new token launches. A growing number of altcoins would naturally mean growth in DeFi TVL, but it comes with a caveat.
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