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Good Morning!

Ethereum added almost 90% of Solana’s market cap in a single day, as the SEC has reportedly made a U-turn on their ETH ETF decision.

Let’s jump in. 👇️ 

Markets

Ethereum ETF Imminent?

What Happened?

On Monday, Ether's price skyrocketed by more than 19%, adding a whopping $70 billion to its market cap, pushing it to a total of $439 billion. This dramatic surge represents almost 90% of Solana's entire market value in just a single day. The driving force? Renewed optimism that a spot Ether exchange-traded fund (ETF) might finally get the green light in the U.S.

The SEC's Sudden Change of Heart

The Securities and Exchange Commission (SEC) made a surprising move that fueled this market frenzy. Towards the end of the U.S. business day on Monday, the SEC made unexpected progress on the approval of an Ether ETF. This progress included asking exchanges to update 19b-4 filings for Ether ETFs.

• Polymarket reacts: A Polymarket contract on Ether ETF approval by May 31 jumped from 10 cents to 55 cents, indicating a 55% chance of approval.

• 19b-4 filings update: The SEC's request for updated filings marked a significant shift from their previous disinterest.

Is This a Political Game?

The SEC's abrupt pivot has raised eyebrows and led to speculation about political motivations. Insiders suggest that the SEC's divisions are not even on the same page, hinting at a politically charged decision rather than a coordinated regulatory move.

• Internal disarray: The SEC's division of trading and markets supports the 19b-4s, while the division of corporation finance manages S-1s, and they seem to be out of sync.

• Political speculation: Sources indicate that the SEC's change of heart might be influenced by the upcoming elections, with former President Donald Trump making pro-crypto statements.

• Trump's crypto stance: Trump has been vocal about his support for crypto, contrasting President Joe Biden's apparent lack of understanding of the space.

What does this mean for price?

The markets had basically priced in a rejection, which is why we saw such a violent expansion in price on Monday as the SEC made a U-turn on their decision.

What’s next? Well, we don’t expect it to be plain sailing. While this is definitely long-term bullish, we expect to see some chop that liquidates or hits the stop loss of late entrants.

Best of Crypto Twitter

Misc

Hong Kong orders Worldcoin to cease local operations (3 minute read) 
Hong Kong's privacy watchdog has ordered the Worldcoin Foundation to halt all operations in the region, citing violations of local privacy regulations. The Office of the Privacy Commissioner for Personal Data (PCPD) revealed that Worldcoin collected facial and iris data from over 8,300 individuals, deeming the practice "unnecessary and excessive."

The PCPD's investigation included ten covert visits to Worldcoin locations and found the company's data retention policy—keeping personal information for up to 10 years to train AI models—was excessively long.

Consequently, an enforcement notice was issued, mandating Worldcoin to cease activities immediately.

Bitcoin Funds Get $306 Million Boost (2 minute read)
Sure, the spotlight has been on spot Ethereum ETF hopefuls since Monday—but the already-trading Bitcoin ETFs have also benefited from the excitement.

Yesterday, Bitcoin ETFs saw a staggering $306 million in funds deposited, according to Coinglass. This marks the largest single-day inflow for these funds since earlier this month. However, the distribution wasn't even. BlackRock's iShares Bitcoin Trust (IBIT) scooped up the lion's share, with $290 million in new deposits.

So, why would Bitcoin ETFs surge on anticipation for Ethereum counterparts? Analysts, like those at Standard Chartered bank, suggest that an Ethereum ETF approval by the SEC could propel both Bitcoin and Ethereum to new all-time highs. This optimism seems to be driving investment across the board.

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