US Stocks Plunge as ETH Falls into "Sell the News" Pattern with the Launch of Ethereum Spot ETF

Yesterday, the U.S. stock market experienced a sharp decline, influenced by Tesla and Alphabet's financial reports. The S&P 500 index fell by over 2%, and the Nasdaq index also suffered a significant drop of 3.64%. On the second day of the launch of the Ethereum spot ETF, a "sell the news" scenario unfolded, with ETH dropping by over 4% in 24 hours, much higher than BTC's -0.87%.

Tech Stock Earnings Reports Released Successively

Due to continuous price cuts squeezing profits, Tesla's second-quarter profit margin dropped to the lowest level in over five years, causing Tesla's stock price to plummet by over 12%. Alphabet Google's parent company suffered a more than 5% decline. Despite strong performance in search and cloud businesses, "YouTube ad revenue fell short of expectations," coupled with continued heavy investments in AI, raising questions among investors about when the investments in this AI wave will yield results.

Disappointed by Tesla's earnings, the delay in Robotaxi's debut, Musk asked: Should we invest in xAI?

Nvidia and Meta, the parent company of Facebook, saw their stock prices drop by 6.8% and 5.6% respectively, while Microsoft and Apple fell by 3.6% and 2.88%.

As tech stock earnings reports are being released successively, investors are beginning to reexamine the fundamentals of companies and whether the market is overbought and overly optimistic.

Probability of Rate Cut in September Reaches 100%

According to a report by CNBC, the U.S. July PMI manufacturing output index fell to 49.5, slipping into contraction territory due to declines in new orders, production, and inventories, unexpectedly below the economists' prediction of 51.5. A report on Wednesday also showed that June new home sales volume was lower than economists' expectations.

Investors are looking forward to the U.S. second-quarter GDP report to be released on Thursday and the June Personal Consumption Expenditures (PCE) data to be released on Friday for clues on the Federal Reserve's rate cut path.

The Federal Reserve will convene the FOMC meeting at the end of the month. According to the CME FedWatch Index, the market generally expects the Federal Reserve to keep rates unchanged in July, but the probability of a rate cut in September has reached 100%.

ETH Experiences "Sell the News" Market Trend

The Ethereum spot ETF officially launched on 7/23, with a total trading volume of $1.112 billion on the first day and a net inflow of $106.8 million. Bloomberg ETF analyst James Seyffart stated:

Compared to the first day of the Bitcoin ETF, the trading volume of the Ethereum ETF was approximately 24% and the flow was 16.5%. I think it was a very robust day!

Ethereum vs. Bitcoin spot ETF, Bloomberg analyst: Very robust first day of issuance!

On the second day of listing yesterday, the trading volume of Belid ETHA was slightly higher than the first day. According to information cited by Tree News from Bloomberg, the net flows that have been disclosed are as follows:

• VanEck ETHV: +$19.7 million
• Grayscale Mini ETH: +$46 million
• Grayscale ETHE: -$32.62 million
• 21Shares CETH: $0
• BitWise ETHW: +$29.5 million

However, Ethereum seems to be following the scenario of the initial Bitcoin spot ETF listing, playing out a "sell the news" market trend, with ETH's 24-hour decline exceeding 4%, much higher than BTC's -0.87%.

Ethereum spot ETF officially launched on 7/23! ETH experiences "sell the news" market trend?