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StoneX Digital Asset Weekly Commentary - Beam Chain (ETH)

By: Stonex Digital LLC, Stonex Digital LLC

Ethereum in Focus: Beam Chain Vision and ETF Influx

 

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Executive Summary

  • Market trading color: Bitcoin hits record highs, driven by regulatory optimism and institutional demand, with $4B ETF inflows
  • Theme of the week – Ethereum sees record ETF inflows; Beam Chain proposed for improved scalability, security, and decentralization
  • Sector commentary: Bitcoin rallies above $90K, Ethereum gains, meme coins surge, and institutional interest in crypto grows

Market Trading Color (Nolan Aibel)

The tone of these updates has become more and more positive as the weeks and months have rolled on. This time a week ago Bitcoin was at its new all-time high of $74,500. A week later and BTC is up another 22%, having touched a local high of $93,482 yesterday. It’s no secret that the potential shift in regulation in the White House has re-sparked interest for the asset class from a traditional manager and fund perspective. We’ve fielded numerous inquiries over the past two weeks with firms who were on the sidelines and now engaging on how they should best gain exposure. The ETF has been a clear winner for those looking to dip their toes and gain price exposure. The Bitcoin ETF products have taken in over $4B worth of inflows in the past week! $IBIT alone has hit $40B in assets in 211 days. The previous record to hit this number was $IEMG in 1,253 days. It is now bigger than all 2,800 ETFs launched in the past ten years and top 1% of all ETFs (@EricBalchunas). ETH ETFs have seen their most meaningful inflows since inception and have now posted three straight days with $100M+ of inflows. Those products have taken in a total of $743M in the past week. Despite these notable inflows, BTC continues to dominate, with the ETH/BTC ratio falling to 0.035 and down now 35% YTD. We do not believe the impact of these inflows has been fully realized by price. As BTC soars to new all-time highs, ETH is still 34% below previous highs. BTC is always the first runner in a bull market. We believe the demand for the asset will only continue to grow in 2025 as institutions continue to educate and enter the space. Per the graph below, ETH and Alts will have their time.

image-20241114125915-2
Source: Blockchaincenter.net

Aside from ETF flows, another metric we track to track US and institutional flow is the Coinbase Premium. This tracks the difference in Bitcoin’s price between Coinbase and Binance. A positive premium typically suggests that the price on Coinbase is higher than Binance due to strong institutional demand amongst US investors. As you could see in the below, what was a large negative premium in October has flipped to one of the highest Coinbase Premiums we’ve seen this past week. This also helps to showcase that this move higher has been largely spot driven. While largely spot driven, funding rates have ticked higher and remain healthy, sitting around 14% across platforms.

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Source: Tradingdigits

Total BTC Futures open interest has skyrocketed as well and is at all-time highs of $56B. Another product dominated by institutions is Bitcoin and ETH futures on the CME which makes up 32% of all outstanding open interest at $18B. 

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Source: Coinglass

ETF Inflows and Ethereum 3.0

ETH ETFs Record Largest Day of Inflows Ethereum ETFs just experienced their biggest day of inflows yet, with $295.5 million in net inflows on the 11th, led by major players Fidelity and BlackRock. This massive increase, nearly triple the previous record, reduced the overall net outflow to just $41 million. As of the 13th, Ethereum ETFs have cumulative net inflows summing to the total of $241.5M.

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Source: DegenzFinance

Beam Chain Proposal: Justin Drake’s Vision for Ethereum’s Consensus Layer

At Devcon in Bangkok, Ethereum researcher Justin Drake introduced the “Beam chain,” a proposed upgrade to Ethereum’s consensus layer. Aimed at modernizing the current Beacon chain, this proposal intends to improve Ethereum’s staking, transaction tracking, and cryptographic security. Key features of the Beam chain include:

  1. Key Objectives:

    • Scalability and Efficiency: Beam chain aims to increase Ethereum’s scalability without relying on Layer 2 rollups, potentially simplifying the network and improving transaction speeds.
    • Security Enhancements: The proposal includes quantum-resistant cryptographic upgrades and introduces ZK-SNARKs ("snarkification") for off-chain consensus, bolstering security and privacy.
    • Decentralization: By reducing the validator bond requirement from 32 ETH to 1 ETH, the Beam chain seeks to encourage broader participation and improve Ethereum's decentralization.
  2. Flexible ZK VM Integration: Validators can select their preferred zero-knowledge virtual machine (ZK VM) from various options, as the Beam chain's "snarkification" happens off-chain. This flexibility allows for easier bug fixes, performance optimizations, and avoids locking the network into a single ZK standard.
  3. Testing and Risk Management: The Beam chain will undergo an intensive, multi-year testing phase with rigorous simulations on dev and test networks to identify and resolve potential issues. This cautious approach, leveraging the expertise of seasoned Ethereum developers, aims to mitigate risks associated with a substantial upgrade.
  4. Timeline and Community Consensus: The Beam chain is not yet part of Ethereum’s official roadmap and will proceed only with broad community support. Coding could begin around 2026, with testing potentially extending until 2029. Incremental upgrades are expected annually, while significant changes could be implemented within a few years.
  5. Distinction from Ethereum 3.0: Drake clarified that the Beam chain is focused solely on the consensus layer and does not impact the execution layer, data layer, or other aspects of Ethereum’s Layer 1 stack. He advised against labeling it as "Ethereum 3.0" to avoid misconceptions about the scope of the upgrade.
image-20241114125915-6
Source: Justin Drake Beam Chain Presentation

There were mixed reactions to Beam Chain. The Ethereum community's response has been varied. Some, like Aragon co-founder Luis Cuende, criticized Ethereum’s focus on technical updates over user experience, while 1kx Research Partner Wei Dai called for more attention to network effects for Ethereum rollups rather than further protocol optimizations.

Despite these concerns, Ethereum researchers highlight ongoing work to improve the entire ecosystem, emphasizing that the Beam chain represents one part of a much larger development effort as seen in the list of potential Ethereum improvement proposals (EIPs).

Beyond Ethereum, our team is examining the recent outperformance of memecoins, driven largely by retail activity as reflected in Coinbase’s app rankings. With Coinbase’s announcement yesterday to list WIF and PEPE, we are closely monitoring the increased trading volume across different exchanges relative to their peers. The current surge in retail participation is influenced not only by rising demand for memecoins but also by Bitcoin reaching new all-time highs. DOGE and BONK have experienced gains exceeding 100%, with BONK alone generating $400 million in trading volume within a single 24-hour period on Coinbase. Notably, Coinbase’s app ranking has ascended to #1 within finance and #8 overall, up from 12th and 114th, respectively, just a week ago.

Sector Commentary

  • Layer One / Altcoins

    • Bitcoin ($BTC): Bitcoin Blasts to $90K as Crypto Rally Shakes Out Leverage Traders (link)
    • Bitcoin ($BTC): El Salvador's Bitcoin Stash Rises Above $500M, but Bhutan Story Might Be Even Bigger (link)
    • Bitcoin ($BTC): Bitcoin 'Shrimps' Buying the Historic Rally as Whales Offload: Van Straten (link)
    • Bitcoin ($BTC): Bitcoin Spikes Above $89K in Wild Trading Session, Battering Both Bulls and Bears (link)
    • Bitcoin ($BTC): Bitcoin Market Euphoric, Faces Risk of Pullbacks and Leverage Washouts, Trading Firm Warns as BTC Price Nears $90K (link)
    • Ethereum ($ETH): 3 reasons why Ethereum price is headed toward $4K (link)
    • Ethereum ($ETH): Top Ethereum Researcher's Dramatic Proposal Draws Standing-Room-Only Crowd in Bangkok (link)
    • Ripple ($XRP): XRP's 90 Cents Calls Dominate Options Markets as Prices Hover Near 65 Cents: Godbole (link)
    • Dogecoin ($DOGE): Dogecoin Rockets 48% as Traders Target $1 Price Next (link)
    • Altcoins: CoinDesk 20 Performance Update: POL Declines 7.7%, Leading Index Lower (link)
    • Altcoins: Dogecoin Flips XRP as Elon Musk-Linked Trade Keeps on Giving (link)
  • DeFi / Stablecoins
    • Stablecoin Supply Expands by $5B Since U.S. Election as Investors Pile Into Crypto (link)
    • Bitcoin could be one upgrade away from overtaking Ethereum DeFi (link)
    • Ethereum Layer-2 Project Starknet to Roll Out Staking Feature Later This Month (link)
    • DeFi Technologies launches SolFi as "Microstrategy for Solana" (link)
  • Web3 / AI / NFTs
    • CoinDesk Protocol Village: Dogecoin Development Project Led by Ankr CEO Acquired by Spirit Blockchain (link)
  • RWA / Tokenization / Metaverse / Gaming
    • Institutions are betting big on RWAs and expecting large returns (link)
    • Real life yield farming: How tokenization is transforming lives in Africa (link)
    • 'PayFi' startup Huma Finance expands to Solana in bid to expand trade financing solution (link)
  • Digital Infrastructure: Capital Markets / Exchanges / DAOs / Mining
    • Crypto Market Cap Could Balloon to $10T by 2026 Under Trump Administration: Standard Chartered (link)
    • 'Get long and stay long': Trumponomics path to a weaker dollar and $1 million bitcoin, says Arthur Hayes (link)
    • Coinbase launches COIN50 index, tradable as a perpetual future with up to 20x leverage (link)
    • Bitcoin Tops $88K, Catapulting MicroStrategy to 24-Year Record Amid Supercharged Crypto Rally (link)
    • MicroStrategy Buys Another 27,200 BTC for $2B; Bitcoin Profits Sit at $11B (link)
    • AI Firm Genius Group Adopts Bitcoin as Primary Treasury Asset; Shares Spike 50% (link)
    • Ether ETF Inflows Hit Record, Bitcoin Inflows Soar as BTC Eyes $90K (link)
    • BTC’s ‘incoming’ $110K call, BlackRock’s $1.1B inflow day, and more: Cointelegraph Hodler’s Digest Nov. 3 – 9 (link)
    • Canary Capital files for first-of-its-kind Hedera HBAR spot ETF with SEC (link)
    • ETF investors lack interest in crypto, report finds? (link)
    • Bitwise launches first Aptos staking ETP (link)
    • Trump's Likely Pick for Treasury Secretary Is a Bitcoin Believer (link)
  • Digital Assets

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for government backed currencies (known as fiat) or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.

Purchasing cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges may not be regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.

This material contained herein is intended for Institutional and Investment Professional Use Only and may not be distributed to the investing public. The views expressed are those of the author and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and StoneX Group Inc. disclaims any responsibility to update such views. Past performance is no guarantee of future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. StoneX Digital LLC is a subsidiary of StoneX Group Inc. and is dedicated to providing institutional clients with access to multiple products and services for digital assets.

StoneX Financial Inc. does not act as counterparty or custodian to any virtual currency transaction(s) offered through its affiliate StoneX Digital LLC and this content should not be construed as a solicitation for futures or securities accounts.

The authors responsible for the preparation of this commentary hereby certify that all the views Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for government backed currencies (known as fiat) or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.

Purchasing cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges may not be regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrencies are not regulated by the Securities Exchange Commission (SEC), FINRA, or the Commodity Futures Trading Commission (CFTC).

This material contained herein is intended for Institutional and Investment Professional Use Only and may not be distributed to the investing public. The views expressed are those of the author and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and StoneX Group Inc. disclaims any responsibility to update such views. Past performance is no guarantee of future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the- counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. StoneX Digital LLC (“SXD”) is a subsidiary of StoneX Group Inc. and is dedicated to providing institutional clients with access to multiple products and services for digital assets. SXD is not a registered broker-dealer or futures commission merchant subject to federal securities or commodity regulations and does not solicit securities or futures. SXD seeks to provide institutional clients the flexibility and tools to interact with markets on their terms and enable them to trade cryptocurrencies.

Options are not suitable for all investors. There are risks involved in any option strategy. Individuals should not enter into option transactions until they have read and understood the option disclosure document titled "Characteristics and Risks of Standardized Options," which outlines the purposes and risks of option transactions.

Exchange Traded Funds (ETFs) are subject to market risk, including the possible loss of principal. The value of the portfolio will fluctuate with the value of the underlying securities. ETFs trade like a stock, and there will be brokerage commissions associated with buying and selling exchange traded funds unless trading occurs in a fee-based account. ETFs may trade for less than their net asset value. Investors should consider an ETF’s investment objective, risks, charges, and expenses carefully before investing.

© 2026 StoneX Group Inc. All Rights Reserved.

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