Key facts:
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Since Kamala Harris announced her candidacy, the price of ether (ETH) has dropped by 26%.
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The SEC has been showing a less-than-flexible stance towards the Cryptocurrency industry.
Matt Hougan, chief investment officer at digital asset manager Bitwise, has addressed the potential impact of the US presidential election on the price of ether (ETH), the native cryptocurrency of the Ethereum network.
For him, that influence already started to demonstrate and stressed that ETH price fell by 26.19% since US Vice President Kamala Harris confirmed that she will be the Democratic Party’s presidential candidate instead of the country’s current president, Joe Biden.
Hougan further compared the asset’s fall to Bitcoin (BTC), which From that date until August 27, it was approximately 8%.. In that regard, he commented: “In my opinion, ETH has more exposure to the election result than bitcoin.”
In the following graph you can see that ETH dropped from the $3,500 area to $2,400down 50% from $4,890, the all-time high (ATH) reached on November 1, 2021.
ETH price so far in 2024. Source: TradingView.
Hougan’s post generated a lot of comments but among them were highlighted Coinbase protocol specialist Viktor Bunin said this is “because people build stuff on Ethereum and you can go after them for it.” The Bitwise executive, meanwhile, replied: “Yes, I agree.”
Bunin’s response suggests that the network Ethereum must face competition in the smart contract environment And that is where the regulatory body led by Gary Gensler can be an impediment to the growth of this ecosystem.
In other words, the restrictions that the SEC is imposing on the cryptocurrency industry may make it more difficult for companies to develop and offer new products, based on smart contracts.
It is also important to clarify that the current candidate for the Republican Party, Donald Trump, has been showing a position in favor of cryptocurrencies, so His victory could be a catalyst for the price of assets such as ETH.
As for BTC, Hougan is suggesting that it is not as exposed to the outcome of this election for one reason: institutions already accept it as a store of value. Another issue is the success of exchange-traded funds (ETFs) in the crypto market.ETF) in the United States of bitcoin since they were launched on the market in January 2024 and They have already accumulated more than 17 billion in net money inflows.
Inflows and outflows into bitcoin ETFs. Source: SosoValue.
Weak performance of ETH funds
Beyond Hougan’s opinion, the truth is that the ETFs of the native Ethereum currency have been showing a weak performance and since they have been on the market they have only accumulated 9 days with positive flow and one with zero inflows and outflows of money. So far, they have reported net money outflows of more than 477 million dollars.
Inflows and outflows into ether ETFs. Source: SosoValue.
As CriptoNoticias has reported, in the days leading up to its launch, Hougan was enthusiasm with the possibility of these financial instruments accumulating significant figures. He said:
“Will that be enough to take ether to new all-time highs? I definitely think that’s possible. If Bitcoin ETFs generated $12 billion in their first four months, I think ether ETFs will generate less than half that amount. And that will be quite significant.”
Matt Hougan, chief investment officer at digital asset manager Bitwise.
The truth is that we will have to wait until November 5, the day on which the presidential elections will be held in the United States, to find out if the Bitwise manager’s reading is correct and the price of ETH enters a bullish or bearish cycle.
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