ETH: Sudden Surge Should Make Us Think

Summary ETH has lagged BTC, but recent outperformance and technical signals suggest the ‘ETH train’ might be arriving on the tracks. The Grayscale Ethereum Mini Trust offers a competitive 0.15% expense ratio and Grayscale has strong industry experience, making it my top ETF choice. Institutional adoption is becoming increasingly imperative, and I believe the positive evolution in regulatory clarity is a good sign for the crypto world, and therefore for ETH as well. ETH is in a key technical zone, defined by the 50 and 200 MAs on the weekly chart, my tool for risk management. ETH-USD’s price isn’t rising the way you expected, right? We’re used to seeing ETH as a lagging asset compared to BTC, but also more profitable during bull runs. And since it still hasn’t surpassed its previous highs, let’s say the delay is starting to feel odd. Like when you’re waiting for a train, and it starts to be a few minutes late. At first, you don’t worry; but when the delay hits 15 or 30 minutes, you start wondering if the train will actually arrive or be cancelled. This parallel fits well, because while all the impatient DeFi investors are hopping on other trains, even if slower, standing still and waiting for the ETH express to pass could lead to two outcomes: either you’re left stranded (so it’s better to jump on another train ), or the ETH express arrives and gets ahead of the others. Well, assuming that the express is the Grayscale Ethereum Mini Trust ( ETH ) , how would you react if the loudspeaker just announced that the ETH express is about to arrive? What is ETH ETF? Grayscale Ethereum Mini Trust, a distant relative of the better-known ETHE, is an ETF, but not in Trust format. Instead, it’s a Spot version . Not a “mini” version, as the name might suggest, but rather a fully evolved Spot version of Ethereum (aligned with the most recent regulations). It’s a topic that’s been debated for months: to simplify, we’re talking about passive funds with the function of storing the underlying asset, in this case, held by the well-known Coinbase Custody Trust Company, LLC , just as we saw with its BTC ETF counterpart . Since 2024, an open war has broken out among the new Ethereum Spot ETFs, although we still don’t have a clear winner. If we were to rank them by AUM, ETH ETF would still be among the top performers, alongside its peer table. ETH Peer table (Seeking Alpha) But… On what basis should the choice be made? If this “war” isn’t about performance, given the index-linked nature of all ETFs, and not even much about NAV due to the Spot structure (unlike what happened with ETHE), then how do you choose an ETF? ETH Peer table – Performance (Seeking Alpha) Personally, I focus on track record and industry experience, and on fees: and in this, Grayscale proves very competitive. Active since earlier with the ETHE trust, it’s a well-established player in the market and now offers the mini version ((ETH)) with a 0.15% expense ratio, highly competitive , making it one of the most cost-effective options in my peer table. Back to the train… Following this somewhat extreme parallel, I believe that while BTC has already passed the station, ETH-USD is simply delayed, and that a voice over the loudspeaker has just hinted: “the ETH train is arriving.” Could it be mistaken? That’s what I sense when I look at the 1-month performance between BTC and ETH and see that ETH is clearly outperforming BTC. Data by YCharts And the narrative I personally think the market is following is the same one that, in my view, drove BTC to new highs: a steady increase in institutional adoption, supported by growing regulatory clarity, kicked off by the arrival of the Guiding and Establishing National Innovation for US Stablecoins Act. Criticized as much as praised, the GENIUS Act is quietly moving through Senate bureaucracy, having passed the closure stage (a procedural step), moving on to debate, and potentially heading toward a final vote. A step that, according to Trump’s own words, aims to integrate stablecoins into the U.S. economy and make the United States the crypto capital of the world. Of course, it’s more of an expectation than a certainty, but in my view, it’s what’s currently driving the bullish narrative around Bitcoin. And yet… Here I raise a strong critique of my own thesis: “it’s wrong to build positions based on political catalysts.” And I truly believe that . In fact, saying the GENIUS Act is the bullish catalyst at work is, in my opinion, just as mistaken as ignoring the fact that something is changing in the monetary system. Because beyond the stablecoin program, it’s impossible not to notice the growing integration of the crypto system into “traditional finance.” And that, yes, in my view, is a long-range catalyst. Just think: in a single year, we’ve seen two major Spot ETF approvals, and now we’re seriously talking about regulating a stablecoin-based monetary system . So… does it really make sense that the ETH train wouldn’t arrive, if the BTC one already has? Data by YCharts In my opinion, no. Ethereum is the primary infrastructure on which most stablecoins (USDC, USDT, DAI, etc.) operate. So theoretically, no, it doesn’t make sense for ETH to lag behind. And I think the price action is already showing some interest in that direction. ETH – USD (technical analysis) (Seeking Alpha) From a technical standpoint, we’re seeing what, I believe, is a bullish pattern, but what I appreciate most is that the risk appears theoretically manageable. Let me explain: ETH-USD has used the 100-week moving average as textbook support, showing strong buying demand. It has also broken through the faster-moving averages, the 21 and the 50, with conviction. Specifically, this week it broke above the 50-week MA, which it might use as support in the coming weeks if the trend continues. The risk is manageable because, in setups like this, I believe the moving average can act as a dynamic/trailing stop. And the natural question arises: why a dynamic stop? Risk We’ve said that the “failure” of the bill is not a long-term positive catalyst, and therefore not a negative one either. But certainly, it could create short-term volatility. In this sense, Elizabeth Warren’s comment , that the bill can’t work due to weak controls on corruption, foreign influence, and various conflicts of interest, brings real issues to light (as I discussed here). If these opinions were to start gaining traction, I’d expect significant volatility, and why not, even some downward moves driven by profit-taking. Conclusion To sum it up, overall, I believe the narrative behind ETH ETF justifies a BUY rating. The “ETH train” is on the tracks, and the crypto market is rising, judging by ETH’s outperformance over BTC in the past month. The doubt remains: where is it heading? Because I hate relying on political catalysts, they’re as disruptive as they are unreliable. But given the way I operate, I greatly value technical confirmation: the “alignment” of the 200 and 50 moving averages on the 1W chart, and the fact that there’s a clear technical reference point to rely on in case the trend reverses.

Source: Seeking Alpha