CEO CoinEx, Haipo Yang, expressed his opinion on the SEC's decision regarding the Ethereum Spot ETF, which also played a role in triggering the global resurgence of meme tokens in May 2024. Meme tokens themed around Donald Trump have also garnered attention.
Throughout May 2024, the crypto market experienced a wave of interesting activities, from the regulatory surprises from the U.S. Securities and Exchange Commission (SEC) to the resurgence of meme tokens. Haipo Yang, as the CEO of CoinEx, believes that the SEC's move will have a positive impact on the global crypto market in the future.
The regulatory surprise came in the form of the SEC's decision regarding rule changes that could soon allow the launch of the Exchange-Traded Fund (ETF) Ethereum Spot on the American stock exchange. According to Yang, this crucial decision not only shifts market dynamics but also reignites interest in various meme tokens across different blockchains.
On May 23, 2024, the SEC approved the rule change 19b-4, a significant step towards the introduction of the first Ethereum Spot ETF in the U.S. This decision came as a surprise to many, considering the previous market sentiment tended towards rejection.
"The SEC's decision to approve this rule change is a milestone for the crypto industry, paving the way for more innovation and institutional investor participation, and sparking a resurgence of meme tokens," said Haipo Yang, CEO of CoinEx, in his official statement on Thursday, June 13, 2024.
Yang further mentioned that there might be political factors behind the rapid change in SEC's stance, suggesting that the Biden administration is aiming to boost support against crypto supporter Donald Trump. Meanwhile, the final approval from the SEC for the ETF to be traded is expected by the end of June or early July 2024.
Investor Preference towards ETH Holding
The direct impact on the crypto market was significantly notable when the SEC gave the green light on May 23. For instance, the ETH/BTC trade pair surged sharply from the annual low of 0.045.
Data from CryptoQuant revealed a substantial movement of Ether (ETH) from crypto exchanges to private crypto wallets, with around 797,000 ETH, valued at approximately US$3.02 billion, being withdrawn from exchanges between May 23, 2024, and June 2, 2024.
"This trend indicates that investors are holding onto their ETH, anticipating further price increases, which often serves as a bullish signal. In my view, this shift indicates that investors are increasingly confident in the long-term growth potential of ETH," added Haipo Yang.
The SEC's decision has shifted the market focus from Bitcoin to Ethereum. The relative market capitalization of Ethereum against Bitcoin now mirrors the levels seen in March 2024, reflecting increased interest in Ethereum.
The narrowing trading volume gap between the two cryptos also indicates that Ethereum is gradually gaining attraction among institutional and retail investors.
"This change in dynamics showcases the crypto market's adaptability to innovation and new opportunities," stated Haipo Yang.
Triggering the Meme Token Resurgence
The positive sentiment surrounding the ETF Ethereum Spot has also spilled over to the meme token market, known as meme coins. The resurgence began with Ethereum-based meme tokens, such as PEPE, reaching new all-time highs and quickly spreading to other blockchain networks like Solana (e.g., FLOKI) and Bitcoin (e.g., ORDI).
Notably, there is a rise in politically themed meme tokens, a trend dubbed "PolitiFi," attracting attention with tokens centered around U.S. presidential candidates Donald Trump and Joe Biden.
"The growing interest in meme tokens highlights the dynamic nature of the crypto market, where new trends can quickly gain traction," said Haipo Yang.
May 2024 witnessed an increase in celebrity-backed meme tokens, with notable examples including JENNER by Caitlyn Jenner and MOTHER by Iggy Azalea.
These tokens quickly gained popularity, reaching a trading volume of over US$200 million in just a few days. The swift success of these crypto types underscores the strong influence of celebrity support in the crypto market.
On the other hand, the Runes protocol, launched on April 20, 2024, initially saw modest performance but experienced a significant market capitalization surge in May 2024, surpassing the US$1 billion mark.
This dramatic rise followed bold claims by its founder, Casey Rodarmor, who promised to 'seppuku' if the market capitalization did not reach US$1 billion within a month. The enthusiastic market response indicates a strong shift towards meme token Runes.
In the stablecoin sector valued in fiat money, despite an overall market downturn, inflows into stablecoins saw a minor increase of US$18 million throughout May, without significant outflows. According to Yang, these figures partly reflect that the underlying bullish sentiment in the crypto market has not completely reversed.
In addition, he stated that the market recovery since late May, driven by the Bitcoin price surge, suggests that inflows into stablecoins may improve in June 2024, potentially leading to gradual steps towards recovery as investor confidence continues to grow.
May 2024 has been a transformative month for the global crypto market, marked by the surprising SEC move towards the ETF Ethereum Spot and the resurgence of meme tokens. These developments highlight the dynamic nature of the market, where regulatory decisions and cultural phenomena like meme tokens can significantly influence investor behavior and market trends.
"As the market anticipates further regulatory approvals and the continuous rise of meme tokens, the prospects for the coming months remain optimistic and forward-looking," concluded Haipo Yang.
