Why Crypto’s Altcoins Popped This Week

An Ethereum (CRYPTO: ETH) exchange-traded fund (ETF) was approved this week, which could open a floodgate of ETFs and funds for the crypto industry. At least that’s what the market has been speculating this week.

According to data provided by S&P Global Market Intelligence, Uniswap (CRYPTO:UNI) is up as much as 28% in the past week, while Lido Staked Ether (CRYPTO:STETH) is up 25.3% and Arbitrum (CRYPTO:ARB) is up 25.3%. 17.9%. The three tokens are currently trading up 21.7%, 18.9%, and 11.2%, respectively, as of 3:30 PM ET on Friday.

Buying Ethereum ETFs

This week, the U.S. Securities and Exchange Commission (SEC) approved a spot Ethereum ETF, following the approval of Bitcoin (CRYPTO:BTC) ETFs earlier this year. This came as a bit of a surprise to the industry because there were questions about whether Ethereum would be considered a commodity or a security. If it were a commodity like Bitcoin, an ETF would make sense, but the security would not be approved.

Approval of an Ethereum ETF indicates that Ethereum is a commodity and other crypto tokens will likely follow suit. We may see this opening the door to similar tokens with similar features, such as the ability to deploy smart contracts on the blockchain.

Moving the industry forward

When Bitcoin ETFs were approved, the market pushed some tokens even higher. This week’s move had the biggest impact on Ethereum-related tokens. Ethereum itself rose 20.9% last week and exploded as speculation began to swirl about future ETF approval.

It’s no surprise, then, that Lido Staked Ether followed suit, as did Uniswap, a decentralized exchange on Ethereum. More value and usage in Ethereum should be good for the ecosystem.

Arbitrum is a Layer 2 blockchain; This means it is built on top of Ethereum and aims to make Ethereum “more inclusive and sustainable” through its scaling technology. Like other tokens built on Ethereum, an ETF could mean increased usage of Ethereum and/or an ETF containing tokens like Arbitrum in the future.

The rising tide lifts altcoin boats

Like the Bitcoin-backed run earlier this year, Ethereum’s ETF approval is causing speculation in the SEC and the market about what will happen next. We know that Bitcoin ETFs have attracted tens of billions of dollars in investments, and it’s possible that Ethereum, the second largest token by market cap, could do something similar. I don’t think it will be as popular as Bitcoin, but any increase in funds coming into the Ethereum ecosystem would be positive.

The story continues

What’s less clear is what happens next, and that’s where much of this week’s speculation comes from. Are altcoin ETFs coming? Will Meme Coins get an ETF?

I think the SEC is loosening its objections to crypto after losing a series of court battles, and that could open up the industry to more funds and ultimately use cases long term. This is an extremely positive development for crypto, but there will be a lot of volatility on the path to a sustainable industry.

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Travis Hoium has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Uniswap Protocol Token. The Motley Fool has a disclosure policy.

Why Crypto’s Altcoins Soared This Week Originally published by The Motley Fool