Posted on

XRP ETF Is Trending On X, Here’s Why

As anticipation builds around the potential approval of the first spot Bitcoin ETFs in the US by the Securities and Exchange Commission, the keyword “XRP ETF” is currently trending on X (formerly Twitter). Numerous XRP community members have posted supposed proof that an ETF in the US is on its way and could soon become a reality. However, a closer examination reveals a more nuanced reality.

XRP ETF Is Trending

Good Morning Crypto recently stated, “JUST IN: Fidelity Unveils XRP ETP !?! With Grayscale & Fidelity offering XRP products, 2024 could be the breakout year for XRP as it inches closer to all-time highs.” Similarly, XRP CAPTAIN announced, “BREAKING: Spot XRP ETF is for real,” while CryptoGeek claimed, “BREAKING: XRP ETF CITED TO BE RELEASED IN A ‘MATTER OF WEEKS’ FOLLOWING BITCOIN ETF APPROVAL BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.”

The root of these claims lies in an XRP ETP from 21Shares (formerly Amun), which is available on Fidelity Investments’ platform. This development has generated significant excitement within the XRP community. However, the narrative around a US-launched ETF is misleading.

The buzz partly stems from Grayscale’s recent decision to reincorporate XRP into its Grayscale Digital Large Cap (GDLC) fund, following Judge Analisa Torres’ July 2023 ruling that classified XRP as a non-security. This ruling reversed Grayscale’s previous removal of XRP in January 2020 amid legal controversies over its security status. This move by Grayscale has fueled speculation about an upcoming ETF from the firm.

But contrary to circulating claims, Fidelity has not launched an XRP ETP. Fidelity’s platform only showcases the XRP ETP launched by Swiss financial institution Amun AG in April 2019. This product, initially called AXRP and later rebranded to 21Shares, is available on the SIX Swiss Exchange. Moreover, it is not a US-registered ETP.

Meanwhile, it is backed by physical XRP and managed by Coinbase Custody. Remarkably, the product is 100% backed by physical XRP and records $49,325 million in assets under management (AUM).

Why A XRP ETF Won’t Happen Anytime Soon

Regarding the possibility of an XRP ETF in the US, Bloomberg ETF expert James Seyffart offered a sobering perspective a few months back in response to rumors about a fake BlackRock XRP ETF which initiated a 15% pump that was quickly erased. In an interview, he stated: “I don’t think that XRP is ever going to get through the SEC’s doors, essentially not anytime soon, even after that loss [Ripple vs. SEC].

He added, “First of all, CME would have to list XRP futures before a futures ETF would launch, and I can’t imagine them allowing them a spot XRP ETF anytime soon. But again, like I said, three weeks ago I said I didn’t think Ethereum futures ETFs would be coming anytime soon unless there’s a huge change in the SEC, so theoretically it could be. But the SEC has said in that Terra case and multiple other cases that they believe Judge Torres got it wrong.”

In summary, while the XRP community’s excitement is palpable, the reality of an ETF in the US remains distant, with regulatory hurdles and the SEC’s stance posing significant challenges.

At press time, XRP traded at $0.55178.

XRP price

Posted on

Bitcoin At $45,000 Is Mispriced, Will Race For ETF Fees Push Prices To Record Highs?

Most analysts are optimistic that the impending launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. could propel the coin to new heights, way above the $69,000 mark registered in November 2021.

Andrew Kang, co-founder of Mechanism Capital, believes that Bitcoin at $45,000 is still grossly undervalued. This is given the anticipated influx of institutional investment from ETFs, and the effort issuers will put into marketing their products as they aim to accrue billions in fees in the months ahead.

Learning From Gold And Quest For Fees

Kang points to gold ETFs, which hold over $120 billion in assets under management (AUM) and generate an estimated $720 million in annual fees for their issuers. ETF issuers will charge a management fee to cover the costs associated with operating the ETF, including custody of coins and trading. Additionally, a fee will be charged through the bid-ask spread whenever Bitcoin is traded.

When trading and management fees are stacked, Bitcoin issuers could generate billions of dollars yearly, especially if trading volume is high. By Kang’s estimation, Bitcoin ETF issuers might generate between $10-20 billion in annual fees.

However, this is subject to dominance. After the Securities and Exchange Commission (SEC) approves multiple spot ETFs, issuers, including BlackRock and Fidelity, are expected to wage an aggressive battle for market share. 

The goal for issuers is not only to ensure that funds spent on advertising yield, but for every dollar spent, more is generated into the future. This is critical because investors are less likely to switch once they choose an ETF, making early dominance crucial for long-term revenue generation.

Is Bitcoin Ready For A 10X?

According to observers, issuers will promote Bitcoin at every opportunity. This is why ChainlinkGod while responding to Kang’s post on X, thinks Bitcoin will also likely track 10X in the sessions ahead since all issuers are “inherently long” on Bitcoin.

Looking at price charts, Bitcoin continues to edge higher, recently rising to as high as $45,800, according to price data. At this pace, BTC bulls extended gains of 2023. This will be as the community expects the SEC to approve the first Bitcoin ETFs. Even so, it is unclear when the agency will greenlight this product immediately. 

Bitcoin price trending upward on the daily chart | Source: BTCUSDT on Binance, TradingView

BTC has critical support at around the $44,000 zone, marking 2023 highs. If bulls maintain prices above this line, the odds of the coin rising to $50,000 in a buy trend continuation pattern will likely increase.

Posted on

Bitcoin ETF: SEC May Notify Approved Issuers To Launch Very Soon – Here’s When

According to a recent report from Reuters, the US Securities and Exchange Commission (SEC) may notify the asset managers looking to launch a spot Bitcoin ETF (exchange-traded fund) if their applications have been approved as soon as next week. 

SEC To Notify Applicants Of Its Decision By Next Week: Reuters

On Saturday, December 30, Reuters reported that the SEC may notify the 14 Bitcoin ETF applicants if their applications will be approved by Tuesday or Wednesday next week. This move would come ahead of the January 10 deadline for the agency to decide whether or not to green-light the ETF application by Ark Invest and 21Shares.

Citing people familiar with the process, Reuters highlighted that asset managers that met their end-of-the-year filing revision deadlines may be able to launch by January 10, 2024. Some of the firms that recently updated their Bitcoin ETF filings with the SEC include Black Rock, Van Eck, Bitwise, WisdomTree, Invesco, Valkyrie, and Fidelity.

Notably, Fidelity Investments revealed more information and technical details about its potential ETF product in its S-1 form update. The asset management firm hopes to beat fellow applicants in winning investors over by proposing the lowest sponsor fee at 0.39%.

Invesco announced a 0.59% rate while offering a fee waiver on the first $5 billion in assets within the first six months after launch. Meanwhile, BlackRock, the world’s largest asset manager and a frontrunner in the Bitcoin ETF race, unveiled Jane Street Capital and JP Morgan Securities as its authorized participants in its updated application. 

From the latest development, it seems the SEC is looking to wrap up the Bitcoin ETF chapter as soon as the new year arrives. Nonetheless, Reuters’ latest report adds optimism to the possibility of the agency approving several ETF applications by January 10.

How Bitcoin ETF Approval Could Impact Price

There have been wide speculations on the possible effects of the ETF approval on the Bitcoin asset. Options platform Greeks.live has offered insight into the potential impact of the exchange-traded fund on the value of the premier cryptocurrency.

Using options data, Greeks.live believes that the market has priced the potential approval of the Bitcoin ETF, and it may not yield greater returns for the asset. This means that the market has already factored in this information, and any positive development might not lead to significant price movement.

According to the platform, this reasoning is based on the little volatility observed across the major term implied volatilities (IVs) and the price of Bitcoin. For context, implied volatility reflects the market’s expectation of how much an asset will move in the future. 

However, options IV on January 12, which is believed to be strongly correlated to the Bitcoin ETF, decreased rather than increased. This lack of volatility and decrease in implied volatility of options suggests that there may not be a substantial impact on the Bitcoin price, even with significant news on the horizon. 

As of this writing, Bitcoin is valued at $42,154, reflecting a mere 0.4% in the past day. The price of BTC has increased by more than 150% this year, partly due to the anticipation of a Bitcoin spot ETF.

Bitcoin ETF

Posted on

Crypto Acceptance Grows As Fidelity Joins Race For A Spot Ethereum ETF

Fidelity, a prominent asset management firm with over $4.5 trillion in assets under management, has formally submitted an application for the establishment of a Spot Ethereum Exchange-Traded Fund (ETF).

The decision is a response to the recent action taken by BlackRock, an asset management company, which submitted their application for an Ethereum Exchange-Traded Fund (ETF) last week.

Fidelity Is 7th On The List

Fidelity Investments has recently positioned itself as the seventh asset management in the United States to pursue the aforementioned product.

Based on the SEC’s Form 19b-4 filing, the Fidelity Ethereum ETF is called the “Fidelity Ethereum Fund” and is designed to track the performance of Ethereum. If approved, the ETF will trade in accordance with the BZX Rule, the company disclosed.

Each share shall reflect a portion of the undivided beneficial interest in the net assets of the Fidelity ETH Fund, the Registration Statement shows. ETH held by the New York Department of Financial Services on behalf of the Fidelity Ethereum Fund will make up the Trust’s assets.

The Importance Of Spot ETFs

Spot ETFs play a pivotal role in significantly expanding the reach of cryptocurrencies to the average investor, aligning with the increasingly emphasized goal of asset managers such as BlackRock, Grayscale, and other industry players.

Despite the concerted efforts of regulatory bodies like the SEC to counteract this trend, the push for democratizing access to crypto investments has remained steadfast.

At the forefront of the crypto market, Bitcoin and Ethereum stand as two of the most prominent digital assets, commanding substantial trade volumes and market values.

Drawing a parallel with Bitcoin, Ethereum stands poised for a potentially significant surge in value within the next 24 hours, driven by the announcement of Fidelity’s application, marking a development that could significantly impact the cryptocurrency landscape.

ETH Up 6.2% In The Weekly Chart

At the time of writing, ETH was trading at $$1,930, up 2.3% in the last 24 hours, and sustaining a decent 6.2% increase in the last seven days, data from Coingecko shows.

Citing a section of the court ruling in the legal battle between Grayscale and the SEC, Fidelity Investments is optimistic that it will receive permission.

The court argued that the SEC lacked a reasonable justification for denying Grayscale’s request to convert its well-known Bitcoin Trust into a full-fledged Bitcoin Exchange Traded Fund (ETF), particularly in light of the prior approval of BTC-linked futures.

As a result, the court ordered a review of the SEC’s ruling, and current information suggests that the SEC and Grayscale are still in talks over the suggested product.

Emerging Prominence Of Crypto Assets

Fidelity has expressed its admiration for Ethereum in a vocal manner. In a recent discussion, Chris Kuiper, the Director of Research at the firm, examined the emerging prominence of digital assets and projected their potential for further expansion in the foreseeable future.

The company’s hope that ETH would be used for large-scale transactions in the future is further expressed in Fidelity’s Spot Ethereum ETF application.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from Consensys

Posted on

Spot Bitcoin ETF: Here’s The Magic Number To Push BTC Past $40,000

David Lawant, the head of research for FalconX, an institutional crypto trading platform tailored for financial institutions, recently provided an insightful forecast regarding the future of Bitcoin (BTC) prices in light of the anticipated launch of a spot Bitcoin ETF in the United States. Sharing his predictions via X (previously known as Twitter), he articulated the financial variables that might play a decisive role.

Lawant remarked, “The next significant variable to watch in the spot BTC ETF launch saga will be how much AUM these instruments will gather once they launch. I think the market is currently expecting this inflow to be between $500 million and $1.5 billion.”

The Magic Number To Push Bitcoin Price Past $40,000

The crypto community is keenly anticipating a positive nod for a Spot Bitcoin ETF either at the end of 2023 or the beginning of 2024. A crucial date on the calendar is January 10, 2024, which is set as the final deadline for the ARK/21 Shares application, leading the current series of applications.

Undoubtedly, a green signal from regulatory authorities for the spot ETF will be a game-changer for the entire crypto asset class. Lawant highlighted the importance of this development, stating, “It will open room for large pockets of capital that today can’t properly access crypto, such as financial advisors, and bring a stamp of approval from the world’s most prominent capital markets regulator.”

The pressing question, though, is the immediate impact on capital inflow. “The first couple of weeks after launch will be critical to test how much appetite there is for crypto at the moment in these still relatively untapped pools of capital,” Lawant emphasized.

Relying on historical data, Lawant pointed out the stability of the ask side of BTC’s order book, especially for prices situated above the $30,000 mark. This data allows for an approximation of how the inflow of capital might influence the price trajectory of BTC.

Through various inflow scenarios squared against a spectrum of the depth of market scenarios, Lawant deduces that the market is possibly forecasting net inflows ranging between $500 million and $1.5 billion within the initial weeks post-launch.

Bitcoin target prices based on net inflows

Drawing conclusions from his analysis, Lawant surmised:

For BTC to establish a new range between the current level and more than $40k, the total net inflows would need to amount to $1.5 billion+. On the other hand, if total net inflows come in below $500 million, we could move back to the $30k level or even below.

However, it’s paramount to note the inherent assumptions in Lawant’s analysis. He admits, “One is that the move from $28.5k to $34.0k was entirely attributed to the market anticipating price-insensitive net inflows from the ETF launch.” This means, among other things, that the current price increase was triggered neither by the correlation with gold nor by the global crises or turmoil in the bond market.

Lawant also highlighted the potential variability in BTC price movement across the order book. Nonetheless, given the stature of issuers like BlackRock, Fidelity, Invesco, and Ark Invest in the SEC queue, the current favorable macroeconomic climate for alternative monetary assets, and prospective improved liquidity conditions, Lawant remains bullish about the potential BTC price rally following the ETF debut. He concluded with, “ceteris paribus I’m still excited about how the BTC price could react to the ETF launch.”

At press time, BTC traded at $34,542.

Bitcoin price

Posted on

Spot Bitcoin ETF: Here’s The Magic Number To Push BTC Past $40,000

David Lawant, the head of research for FalconX, an institutional crypto trading platform tailored for financial institutions, recently provided an insightful forecast regarding the future of Bitcoin (BTC) prices in light of the anticipated launch of a spot Bitcoin ETF in the United States. Sharing his predictions via X (previously known as Twitter), he articulated the financial variables that might play a decisive role.

Lawant remarked, “The next significant variable to watch in the spot BTC ETF launch saga will be how much AUM these instruments will gather once they launch. I think the market is currently expecting this inflow to be between $500 million and $1.5 billion.”

The Magic Number To Push Bitcoin Price Past $40,000

The crypto community is keenly anticipating a positive nod for a Spot Bitcoin ETF either at the end of 2023 or the beginning of 2024. A crucial date on the calendar is January 10, 2024, which is set as the final deadline for the ARK/21 Shares application, leading the current series of applications.

Undoubtedly, a green signal from regulatory authorities for the spot ETF will be a game-changer for the entire crypto asset class. Lawant highlighted the importance of this development, stating, “It will open room for large pockets of capital that today can’t properly access crypto, such as financial advisors, and bring a stamp of approval from the world’s most prominent capital markets regulator.”

The pressing question, though, is the immediate impact on capital inflow. “The first couple of weeks after launch will be critical to test how much appetite there is for crypto at the moment in these still relatively untapped pools of capital,” Lawant emphasized.

Relying on historical data, Lawant pointed out the stability of the ask side of BTC’s order book, especially for prices situated above the $30,000 mark. This data allows for an approximation of how the inflow of capital might influence the price trajectory of BTC.

Through various inflow scenarios squared against a spectrum of the depth of market scenarios, Lawant deduces that the market is possibly forecasting net inflows ranging between $500 million and $1.5 billion within the initial weeks post-launch.

Bitcoin target prices based on net inflows

Drawing conclusions from his analysis, Lawant surmised:

For BTC to establish a new range between the current level and more than $40k, the total net inflows would need to amount to $1.5 billion+. On the other hand, if total net inflows come in below $500 million, we could move back to the $30k level or even below.

However, it’s paramount to note the inherent assumptions in Lawant’s analysis. He admits, “One is that the move from $28.5k to $34.0k was entirely attributed to the market anticipating price-insensitive net inflows from the ETF launch.” This means, among other things, that the current price increase was triggered neither by the correlation with gold nor by the global crises or turmoil in the bond market.

Lawant also highlighted the potential variability in BTC price movement across the order book. Nonetheless, given the stature of issuers like BlackRock, Fidelity, Invesco, and Ark Invest in the SEC queue, the current favorable macroeconomic climate for alternative monetary assets, and prospective improved liquidity conditions, Lawant remains bullish about the potential BTC price rally following the ETF debut. He concluded with, “ceteris paribus I’m still excited about how the BTC price could react to the ETF launch.”

At press time, BTC traded at $34,542.

Bitcoin price

Posted on

Bitcoin Spot ETFs: Research Firm Predicts Inflows Over 70,000 BTC, This Price Target

In a recent series of tweets, Vetle Lunde, Senior Analyst at K33 Research, delved deep into the potential ramifications of the US Bitcoin (BTC) spot ETFs. Lunde’s analysis suggests that the broader market might be significantly underestimating the transformative power of these financial instruments.

Lunde’s assertion is rooted in five core reasons. He began with a bold proclamation: “The market is wrong – and dramatically underestimates the impact of US BTC ETFs (and ETH futures-based ETFs).”

Why The Market Is Wrong On Bitcoin

Firstly, Lunde believes that the current climate is ripe for the approval of US spot ETFs, suggesting that the odds have never been more favorable. As NewsBTC reported, Bloomberg experts Eric Balchunas and James Seyffart recently raised their Bitcoin spot ETF approval odds following the Grayscale judgment to 75% this year, 95% by the end of 2024.

Secondly, Lunde pointed out that BTC price has retraced to pre-BlackRock announcement levels. The third reason revolves around the potential competition and the simultaneous launches of multiple US spot ETFs. Lunde anticipates that these, if approved, could lead to robust inflows, potentially surpassing the initial trading days of both BITO and Purpose.

For context, he highlighted that Purpose saw inflows of 11,141 BTC, and in its wake, subsequent ETF launches in Canada resulted in a whopping 58,000 BTC worth of inflows within a mere four months. Given the vastness of the US market compared to Canada, the inflow potential is considerably higher.

The fourth reason Lunde presented is based on historical data from the past four years. He emphasized a noticeable correlation between strong BTC investment vehicle inflows and appreciating BTC prices. This relationship becomes even more pronounced during periods of extreme inflows, which have historically contributed to significant market uplifts.

The last crucial point for Lunde is that on August 17 the market got rid of from excess leverage, as NewsBTC reported.

By The Numbers

In conclusion, the research firm posits that US BTC spot ETFs could see at least 30,000 BTC worth of inflows in their first 10 days. Over a span of four months, the combined inflows into BTC investment vehicles could range between 70,000 to 100,000 BTC, driven by US spot ETFs and growing inflows to ETPs in other countries.

Based on these flow assumptions and data from the past four years, Lunde suggests a potential 66% BTC rally, targeting a price of $42,000. However, he also cautioned that this projection is based on a “naïve assumption” and doesn’t account for other market-moving events.

Bitcoin price prediction

At press time, BTC traded at $25,865.

Bitcoin price