PDAXScope: ETH Dencun upgrade; ETH ETF could be bigger

(March 15) Check out other fresh news in the crypto world in today’s issue of the PDAXScope. 📰

Crypto News:

Ether ETFs could be bigger than Bitcoin ETFs, says VanEck

VanEck, the global investment firm, thinks an ether ETF could attract huge demand. “The world of investors who are looking for cash producing assets is massive and ETH obviously generates fees that goes to the token holders," said VanEck Portfolio Manager Pranav Kanade. "Even if you don't have an ETF that can offer staking as a part of it, it's still a cash producing asset, so I think ETH could make more sense as an asset to more people than Bitcoin does.” As the Ethereum uses a Proof of Stake consensus mechanism, holders of ether can earn yield by "staking" or putting their tokens to work on the blockchain. On Coinbase, for instance, ETH stakers can earn about a 3% yield.

Layer 2 blockchains become cheaper after Ethereum's Dencun upgrade

Ethereum’s Dencun upgrade went live on Wednesday, introducing a mechanism to reduce costs associated with transactions on layer 2 solutions that batch and compress transactions before sending them to the mainnet. According to blockchain analyst Marcov’s Dune-based tracker, the average cost of transactions on scaling solution Optimism has dropped to nearly 4 cents, down significantly from the recent average of around $1.4. The average fee on Coinbase’s layer 2 solution Base fell to 3 cents from roughly $1.50, while Arbitrum’s declined to 40 cents. The average fee on zkSync and Zora also fell.

Global News:

Private credit ties to banks deepen in Europe as default risk rises

Europe's private credit funds are increasingly borrowing from banks to boost their performance, fuelling concerns about the wider risks posed by this interconnectedness. A record 80% of new European private credit funds borrowed from banks via 'subscription lines' in 2023, funding that allows them to lend before tapping their investors for cash. Regulators including the Bank of England are already probing potential risks posed by lenders' exposure to credit funds, which are loosely regulated and typically finance firms that struggle to borrow directly from banks or in bond markets. The boom in so-called shadow banks has also raised the alarm among some financiers, who point to the possibility of new asset bubbles that could undermine financial stability. Some private credit funds are also adding leverage to their loans, maximizing returns but at the same time magnifying potential losses.

Germany is only halfway through property crisis

The euro zone's largest economy is in the grip of its worst property slump since at least the 2007-9 global financial crisis, after a sharp rise in borrowing costs and a higher proportion of riskier lending tipped the sector into one of Europe's biggest downturns. European Central Bank supervisors again warned this week that commercial real estate (CRE) was "particularly vulnerable" to recent rate rises.

Local News:

SMC profit surges 67% to P45 billion

ANG-led conglomerate San Miguel Corp. (SMC) recorded a 67% jump in its net income for 2023, reaching P44.7 billion, driven by growth across its business segments. SMC attributed the results to volume growth across its key businesses, including San Miguel Brewery, Inc., Ginebra San Miguel, Inc., Petron, and SMC Infrastructure, along with the integration of Eagle Cement Corp.’s financial results. SMC is confident that it would “efficiently manage its business and continue to deliver sustainable value” amid market uncertainties.

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