📈 Is the Ether ETF Coming?

What’s on the Menu 🍴

Investors are anticipating good news for crypto soon…

But it’s not all sunshine on the horizon.

Let’s dig in:

• Is the Ether ETF Coming? 📈

• Nvidia: What Investors Want to See 🧐

• Have Homeowners Gotten Lucky? 🏡

Today’s newsletter is a 4 minute read.

Is the Ether ETF Coming? 📈

Ethereum investors, hold onto your hats because the buzz around an Ethereum spot ETF is getting louder.

On Monday and Tuesday, Ether (ETH) shot up more than 10%, reaching $3,800, after Bloomberg analysts significantly boosted their odds of the SEC approving an Ether spot ETF.

What was once a distant dream now seems like a plausible reality.

Bloomberg’s Senior ETF Analyst Eric Balchunas, along with James Seyffart, tweeted that they’re upping their approval odds to 75%, up from a mere 25%.

This sudden optimism is fueled by rumors that the SEC might be softening its stance on the increasingly political issue of crypto ETFs.

Historically, the market had largely priced in the SEC rejecting these proposals, but now, the narrative is shifting dramatically.

Why does this matter?

An ETF approval would be a game-changer, potentially opening the floodgates for institutional investors and validating Ether as a mainstream asset.

But it’s not a done deal, yet.

The SEC has a track record of delaying and scrutinizing crypto-related proposals.

Just this week, the SEC is expected to make final decisions on several spot ETF applications, including those from big names like VanEck and Ark Invest.

The recent move by the SEC to ask exchanges to update their 19b-4 filings—a step indicating rule change proposals—suggests they are seriously considering the applications, though approval isn't guaranteed.

The excitement isn't just among analysts. Market sentiment has shifted significantly, as seen on prediction markets like Polymarket, where the odds of an Ether ETF approval by the end of May spiked from 10% to 55%.

The implied volatility of Ether also reflects this newfound optimism, with traders snapping up $4,000 calls set to expire at the end of May.

In summary, while the crypto community awaits the SEC’s final word, the increased probability of an Ethereum spot ETF approval is already causing waves.

If the SEC gives the green light, it could mark a pivotal moment for Ethereum and the broader crypto market. Stay tuned; this could be the start of something big.

Nvidia: What Investors Want to See 🧐

It’s hard to believe, but it’s only been a year since Nvidia (ticker: NVDA) delivered the earnings report that shocked the world in May 2023.

Back then, analysts had no idea just how much Nvidia would crush earnings estimates due to accelerating growth, leading to a 30%+ gap up in the stock:

Things are very different now after several quarters of robust growth and upward revised guidance from NVDA.

Not only is NVDA stock up over 200% in the past year, the expectations for the company’s future have risen to meteoric heights.

Many investors have become accustomed to NVDA beating earnings estimates and giving bullish comments about the future of AI.

But those expectations can also be a double edged sword!

NVDA reports Q1 earnings on Wednesday afternoon and the expectations are sky high.

The market currently expects the company to deliver earnings growth of over 400% year-over-year, and almost 30% additional growth in the year ahead.

That’s a high bar!

Whether or not NVDA can satisfy investors could also have an impact on the broader market, especially within the tech & semiconductor segments.

The options market is currently pricing in about an 8% move in NVDA stock this week.

For the stock to make a push above that level, NVDA will have to beat these current expectations:

• Revenue: $24-25 Billion

• Operating Profit: $16 Billon

• Adjusted EPS: $5.42

• Q2 Revenue guidance > $27B

• Q2 Adjusted EPS guidance > $6

Investors will also want to hear updates on how demand is developing for new AI chips and whether NVDA thinks growth will continue into next year without any huge slowdown or inventory build.

So keep an eye on the action in NVDA stock after the market closes on Wednesday and we’ll keep you updated on any big changes here at the Daily Dough!

Have Homeowners Gotten Lucky? 🏡

The data has spoken: homeowners have higher net worths than renters.

The median net worth of a homeowner is 38x that of a renter according to the Federal Reserve data.

It begs the question… why is this? Did homeowners just get lucky here?

First off, I don’t believe you have to be a homeowner to build a lot of net worth, plenty of individuals i’ve worked with have been testaments of this. My husband and I even built our net worth up as renters.

So there should certainly not be a blanket statement out there that you have to be a homeowner to build a solid financial life.

A lot of your outcome here depends on where you live in the United States (or, the world if you’re geo-arbitraging a cheaper life somewhere else like Thailand or Spain).

To put it simply… some places are way easier to own a home than others. Some homeowners DID get lucky in terms of their timing of becoming homeowners.

However, there are key factors leading to homeowners having higher net worth.

1. Forced Savings Mechanism: It’s really easy to leave your home equity alone and just let owning a home do its job for you. Not to say people don’t take cash out of their home, they do. However, the simple nature of not being able to snap your fingers and get liquidity, helps people forget they’re even building equity and net worth in the first place.

   The “out of sight, out of mind-ness” of building net worth through home equity probably does homeowners a lot of favors vs. having liquid net worth that is easily spendable.

2. Homeowners Have More Stability: Renters are more likely to be unsure where they want to land forever (or for a long period of time). Stability could lead to more net worth.

   I know for myself, I had a couple of decades of renting because I didn’t know where I wanted to be. Did this hurt my net worth? Probably because I was in a hot real estate market early (Austin, TX). I was traveling the world and living year-by-year. The flexibility of renting was what I needed at the time and I didn’t want to buy a home. If I had more desire for stability, I would have been more likely to buy a home early in an emerging market like Austin. I’d likely be richer today.

3. Monetary Policy Has Allowed For A Housing Boom: The reality is, after the 2008 financial crisis, interest rates were very low. The lucky ones got to lock in mortgages under 3%. Now, homebuyers are looking at 7-8% mortgages making housing affordability a straight up crisis in the United States. Buying a home today may not lead to the same net worth growth as the past decade or two of homeowners have seen.

   The pandemic and low interest rates led to an insane boom in housing prices (way beyond normal appreciation).

   

   Homeowners benefited from this boom immensely when it came to their net worth growing.

So, there are some clear reasons why homeowners have higher net worths than renters. Not only that, locking in a fixed mortgage will likely help you beat shelter inflation over time. Another perk.

However, it’s not a reason to buy a home if it doesn’t make sense for you financially. It’s also important not to conflate RETURNS with EQUITY! They are two completely different things.

You can actually build equity but end up with low to no returns in the end (thanks to costs of homeownership).

So, as most things in personal finance, it’s not that simple and… it depends.

Food For Thought 🧠

"The only limit to our realization of tomorrow is our doubts of today.”
- Franklin D. Roosevelt

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.