Cardano’s ADA token surged 11%, outperforming bitcoin (BTC) and ether (ETH), after Grayscale Investments applied for the first-ever spot ADA exchange-traded fund (ETF) in the U.S.

ADA jumped to 80 cents, with the move starting late Wednesday, according to CoinDesk data. However, the ninth-largest cryptocurrency by market value, is still down 36% from its December high of around $1.37.

Grayscale, a prominent crypto asset manager, filed to list the first ever spot ADA fund on the New York Stock Exchange. A spot ETF would enable investors to gain exposure to the cryptocurrency without having to own it directly.

Bitcoin and ether spot ETFs began trading in the U.S. last year, attracting billions in investor funds since their inception and bolstering the narrative of institutional adoption.

Note that the U.S. SEC’s approval of spot BTC and ETH ETFs was primarily based on the assumption that the CME’s surveillance system for bitcoin and ether futures would mitigate concerns about price manipulation. In other words, CME futures have been a prerequisite for obtaining spot ETF approval. The global derivatives giant is yet to list ADA futures.

The market doesn’t seem worried about that, as evidenced by ADA’s price spike.

Focus on Layer 1 coins

The cryptocurrency and its Layer 1 peers like BTC, ETH, SOL and others could remain well supported in days ahead as social media chatter suggests a shift in investor bias from memecoins to layer 1 coins, according to analytics firm Santiment.

“The crypto community has largely shifted their attention to Bitcoin and other Layer 1 assets like Ethereum, Solana, Toncoin, and Cardano. Collectively, the top Layer 1 assets are getting 44.2% of discussions among specific coins. Meanwhile, top meme coins like Dogecoin, Shiba Inu, and Pepe are being discussed less and less across social media,” Santiment said on X.

“A shift in trader attention from meme coins to Bitcoin and Layer 1 assets is generally a sign of a more stable and sustainable market environment,” Santiment added.

BTC in stasis

Bitcoin continues to trade lacklustre between $95,000 to $100,000, with upside likely capped by trade war fears and rising inflation expectations in the U.S. Ether, the second-largest token by market value, has been locked between $2,500-$2,900 since recovering from last Monday’s crash to $2,000 on several exchanges.

Macro traders have recently pivoted to gold, sending the yellow metal’s price to all time highs above $2,900 per ounce.

Some analysts said bitcoin will have the last laugh.

“The recent decrease in volatility, coupled with the rising price of gold, should highlight Bitcoinʼs growing appeal as an alternative store of value. Despite short-term fluctuations, Bitcoinʼs fundamental narrative remains intact, with increasing institutional interest and its positioning as a potential hedge against inflation and currency devaluation continuing to support its long-term potential,” analysts at Bitfinex said.

“A shift [away from gold] may be underway. Over $196 billion worth of Bitcoin is now held by ETFs, public and private companies, and even nation states. With central banks expanding money supply and fiat devaluation risks rising, Bitcoinʼs fixed-supply narrative is becoming increasingly attractive,” analysts added.

A fresh round of tariffs by U.S. president Donald Trump and lack of short term catalysts is inciting caution from market watchers, who believe Ethereum’s ether (ETH) may be particularly affected.

Trump on Sunday said he will introduce 25% tariffs on all steel and aluminium imports into the US, on top of existing duties, with reciprocal tariffs later in the week applicable to all countries.

The rhetoric and spike in inflation expectations could breed downside volatility with a key indicator that foresaged a move above $100,000 for bitcoin, when it traded under $70,000, turning bearish on Sunday.

Crypto majors remained little-changed in European afternoon hours Monday, with U.S. futures Dow and S&P 500 up 0.46% ahead of the New York open. Bitcoin, ether, XRP, Solana’s SOL and dogecoin (DOGE) were up under 1% in the past 24 hours, while BNB Chain’s BNB lost 4.5% after a Sunday rally.

Tariffs introduce economic uncertainty by potentially escalating trade wars, which can lead to market volatility — such events tend to impact bitcoin and the broader crypto market as investors tend to move away from risk assets to safer investments.

Some traders say ether could be further impacted as sentiment for crypto fades down, adding to an already tumultuous year for the asset which saw a widely-watched bitcoin-ether ratio drop to 2021, indicative of a fallout for ETH and preference for BTC.

A drop in ETH may further spell bad news for related beta bets such as memecoin dogecoin (DOGE) and Ethereum-based DeFi tokens, which tend to mirror the movements of the parent asset.

“The rise of BTC vs everything else is the most evident in comparison with ETH, which is seeing record short-interest and FUD with the 2nd largest token being down -23% YTD vs a +2.5% gain in BTC,” Augustine Fan, head of insights at SignalPlus, told CoinDesk in a Telegram message.

“At the risk of sounding like a broken record, but a lack of L1 catalysts and narrative leadership will likely continue to weigh on Ethereum in the foreseeable future,” Fan added.

“Ethereum has been hit particularly hard as ETH reversed its entire pump from late November last year, unwinding any gains to holders,” shared Nick Ruck, director at LVRG Research, in a Telegram message. Due to expectations of increased inflation, investors are betting on only one interest rate cut by the Federal Reserve this year, casting a grim outlook for risk assets including crypto.”

Meanwhile, traders at Singapore-based QCP Capital expect crypto markets to flip-flop in the coming weeks as Trump’s words continue to impact markets.

“A feedback loop is emerging—President Trump, highly sensitive to market reactions, is facing a market increasingly calling his bluff. This could embolden him further, adding another layer of volatility,” the firm said in a Monday broadcast message.

“BTC volatility now skews in favor of puts until April, reflecting a lack of upside catalysts,” it ended.

After momentarily sliding below important support levels, Ethereum (ETH) is once again on the climb. After a significant change in market mood, the second-largest digital asset by market capitalization passed $2,900.

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Interestingly, Eric Trump, the son of US President Donald Trump, weighed in on the situation, remarking that it is a strategic opportunity to acquire ETH.

Tariff Pause Sparks Market Rebound

Concerns over possible tariffs on Canada and Mexico rattled the crypto market earlier this week. Both Bitcoin and Ethereum fell significantly; Ethereum dropped momentarily to around $2,360. Still, the temporary suspension of the tariffs by Trump offered a breather, which raised investor confidence in risk assets including cryptocurrency.

In the wake of the announcement, Ethereum experienced a robust recovery, with a nearly 20% increase. Traders interpreted this as an invitation to re-enter the market, and ETH promptly reclaimed the $2,900 mark.

In my opinion, it’s a great time to add $ETH.

— Eric Trump (@EricTrump) February 3, 2025

Eric Trump’s Crypto Endorsement Raises Eyebrows

Eric Trump posted his optimistic view on Ethereum on social media. He first said, “In my opinion, it’s a great time to add $ETH. You can thank me later.” Although the subsequent section of his remarks was deleted, crypto investors saw resonance in his endorsement of Ethereum’s future development.

The Trump family has been progressively involved in the digital asset sector, particularly through their World Liberty Financial platform. This most recent statement serves to emphasize their involvement and potential long-term dedication to blockchain technology.

World Liberty Financial’s Significant Ethereum Transaction

World Liberty Financial recently made a substantial move in the crypto space, which has served to further fuel speculation. The firm transferred over $300 million in assets to Coinbase’s custody platform, according to blockchain analytics firm Spot On Chain. Furthermore, they acquired an additional 1,826 ETH for approximately $5 million and converted nearly 20,000 Lido Staked Ether (stETH) into ETH.

World Liberty Financial (@worldlibertyfi) moved $307.41M in 8 assets to #CoinbasePrime 6 hours ago—as part of treasury management and business operations.

Shortly after, the project unstaked 19,423 $stETH to $ETH and further spent 5M $USDC to buy 1,826 $ETH at $2,738.… https://t.co/Rp9NAFUs5N pic.twitter.com/5bfIvJma7U

— Spot On Chain (@spotonchain) February 4, 2025

These transactions indicate that the company is making preparations for the introduction of its “Earn and Borrow” lending protocol. Although the protocol is still in the process of being developed, the substantial transfers suggest that the platform could soon play a significant role in decentralized finance (DeFi).

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Ethereum’s Prospects Still Remain Positive

As institutional interest is rising and the price of the top altcoin has recaptured higher levels, Ether remains a central focus in the crypto market. Macroeconomic changes, strategic investments, and political influence taken together provide an interesting dynamic for ETH’s future course.

Featured image from Gemini Imagen, chart from TradingView