spot Bitcoin ETFs Archives - Page 3 of 3

7th February 2024

Bitcoin On The Brink: Is A “Big Move” Imminent?

The state of Bitcoin (BTC) price action across multiple time frames has analysts at the edge of their seats. As of February 7, various technical formations suggest that the leading crypto appears poised for a critical breakout from the current consolidation.

Is Bitcoin Preparing For A Big Move?

Taking to X, Mags thinks Bitcoin is in for a “big move,” considering the candlestick arrangement in the weekly chart. The analyst notes that prices have been moving horizontally in the past nine weeks, falling within the expected range.

BTC in range | Source: Mags on X

The Bitcoin market has ranged between 8 and 30 weeks in the past. So far, the current consolidation has lasted for nine weeks. Amid this, Bitcoin prices have tested both sides of the range with notable “fake-outs.”

In light of the current state of affairs in the Bitcoin market, Mags is confident that the prolonged consolidation suggests that the coin, guided by history, could edge higher.

Beyond the ranging market, another analyst notes that the Bitcoin 3-day Bollinger Bands, a technical indicator that measures volatility, is narrowing. The squeeze, the trader notes, is at historical levels, often followed by a breakout. However, as it is, how prices will evolve in the weeks and months ahead remains uncertain.

BTC Bollinger Bands squeeze: Source: Matthew Hyland on X

Adding to the intrigue, Jason Goepfert on X points out that the S&P 500, a stock market index, is currently within 0.35% of its 3-year high. The uptrend is clear even though less than half of all stocks constituting the index are trading above their 10-day moving average.

At the same time, less than 60% are above their 50-day moving average, and fewer than 70% are above their 200-day moving average. This rare confluence suggests that the financial market could be at a critical turning point, possibly impacting crypto.

Eyes On Spot ETF Issuers And United States Federal Reserve

Only time will tell whether Bitcoin will rally or tank from spot rates. However, what’s evident is that the Bitcoin uptrend remains clear, with fundamentals aligning to support optimistic bulls. To illustrate, spot Bitcoin ETF issuers are buying more coins from the market. At the same time, the excitement around the upcoming Bitcoin halving event is adding fuel to the optimism.

The broader market is also watching the United States Federal Reserve. Market consensus is that the central bank will slash interest rates in March 2024 and embark on quantitative easing. With more money circulating, some will find their way to Bitcoin, driving prices to record highs of $69,000 or beyond in the coming months.

5th February 2024

Why Is Bitcoin Price Not Going Up Despite The ETFs? Expert Explains

In a recent analysis, Fred Krueger, the former founder and chairman of Traffic Marketplace, offered a nuanced explanation for the seemingly paradoxical situation where the Bitcoin price has fallen despite the influx of over $5 billion in new assets through Exchange-Traded Funds (ETFs) by BlackRock and Fidelity. Since January 11, the first trading day of the ten spot ETFs, the Bitcoin price has currently plunged by 13% (over 21% at times).

Why Is Bitcoin Price Not Going Up?

Krueger’s insights, shared via X (formerly Twitter), delve into the complex dynamics of the market and its recent interactions with emerging financial instruments. Krueger’s analysis begins by highlighting a key strategy adopted by arbitrage traders in late June 2023, in anticipation of the ETF launch.

He stated, “In late June 2023, in anticipation of an ETF, arbitrageurs put on Long GBTC, short BTC Futures trades.” This maneuver, according to Krueger, initially had a negative impact on Bitcoin’s price. However, its effects were masked by the overall market rally at the time.

Crucially, this strategy began to close the discount on Grayscale Bitcoin Trust (GBTC) and simultaneously increased the open interest on the Chicago Mercantile Exchange (CME). With the approval of the ETFs, these arbitrage traders shifted their strategies. Krueger explains, “Once the ETFs were approved, the arbs unwinded the trade. This time they sold GBTC for BTC, and bought Futures.”

He describes this action as market-neutral. The selling of GBTC necessitated an actual sale of Bitcoin, which balanced against the futures purchase. This dynamic led to a decrease in the open interest on CME, a trend that was observed and reported.

There Was More At Play

Krueger also sheds light on the composition of the new ETF demand, noting that “about 1.5 billion of the 5 billion in new ETF demand was in fact recycled from GBTC in tax-neutral accounts, looking for lower fees.” This recycling of funds, while significant, did not represent fresh capital entering the Bitcoin market but rather a reallocation of existing investments.

The analysis further identifies external market pressures, notably the selling of $1 billion worth of GBTC by Sam Bankman-Fried (SBF), founder of FTX. Krueger comments, “This selling, and the headline selling of GBTC spoofed the market, and so people concluded the ETF was a failure.”

However, Krueger argues that this perspective overlooks the reality that the ETFs actually created net new buying pressure of over $3.5 billion. Despite the substantial buying activity spurred by the new ETFs, the broader market reaction was influenced by a combination of factors, including the FTX selling and the unwinding of arbitrage positions.

Krueger concludes his analysis by stating, “The relentless buying of the new ETFs was far bigger than anybody predicted, modulo the FTX selling and the arb unwinds.” Overall, Krueger is super bullish:

Over the next 30 to 60 days, there are 20 to 40 trading sessions. I would bet this results in between 4 and 6 Billion new USD in inflows. At a market cap of 850 Billion, it’s pretty easy to see this *could* move the market 50% or to 64K. Basically at all time high.

At press time, BTC traded at $43,054.

Bitcoin price

31st January 2024

Ethereum to $20,000: Analyst Sees Spot Ethereum ETFs Fueling Bull Run

A crypto analyst, Eric, believes Ethereum (ETH) could spike to $20,000 in the upcoming bull run. The analyst said the potential launch of spot Ethereum exchange-traded funds (ETFs) in the United States will propel this upswing.

Ethereum To $20,000 Possible

In a post on X, Eric cited Ethereum’s historical tendency to mirror Bitcoin (BTC), albeit with a one-cycle lag. In the previous bull market, the analyst noted that Bitcoin surged 22-fold from $3,100 to $69,000. Therefore, if Ethereum follows a similar trajectory, reaching $20,000 would be a realistic possibility.

As the analyst noted, Ethereum’s recent bear market bottom of $880 in 2022, if extrapolated using the 22x growth rate seen in BTC, places the coin at $19,360. However, the analyst believes Ethereum might surpass expectations, making $20,000 a base and a psychological round number to monitor closely.

Supporting this forecast is the possible approval of a spot Ethereum ETFs. Like the spot Bitcoin ETF, this authorization will likely attract institutional investors and significantly boost Ethereum prices and liquidity. Institutional investors can gain exposure to Ethereum through these complex derivative products without the complexities of directly trading or storing the coin.

While the optimism remains, the United States Securities and Exchange Commission (SEC) will likely follow the same path it took before approving the first spot of Bitcoin ETFs in January. For context, the strict agency failed to approve any spot Bitcoin ETF for over ten years, citing market manipulation risks and the absence of proper monitoring tools.

Will The US SEC Approve A Spot Ethereum ETF?

However, in a recent statement by The Block, Standard Chartered, a global bank, said the US SEC will likely approve Ethereum ETF’s first spot in May 2023. By then, the bank added, ETH prices will be trading at around $4,000, propelled by general market optimism.

The bank notes that the failure of the agency to classify ETH as a security further adds weight to this expectation. At the same time, Grayscale Investments, which is issuing Grayscale Ethereum Trusts (ETHE), wants to convert this product into an ETF. Each share traded at around $20 as of January 30.

ETHE share price | Source: Grayscale

Earlier, Grayscale won against the US SEC’s arguments, wishing to prevent the conversion of their Bitcoin Trust into an ETF. This win set the ball rolling for the eventual approval of the first spot Bitcoin ETFs in the United States.

Additionally, the fact that Ethereum Futures ETFs were recently approved and listed on the Chicago Mercantile Exchange is a net positive, paving the way for a potential listing in May 2024.

31st January 2024

Bitcoin ETFs Experience Day 12 Reversal, GBTC Selling Slows, Fidelity And Blackrock Garner $400 Million

Bitcoin has witnessed a positive turn of events as it reclaimed the $43,000 mark on Tuesday, thanks to a significant reduction in selling pressure from asset manager Grayscale. The reversal in Bitcoin ETFs during day 12 of trading has seen more inflows than outflows. Fidelity and Blackrock recorded a combined $400 million across their Bitcoin ETFs under the ticker names FBTC and IBIT, respectively.

Bitcoin ETFs Record Third-Largest Money Day

According to market expert James Mullarney, Grayscale Bitcoin Trust (GBTC) has experienced a noticeable reduction in selling pressure, as reflected by the slowing down of GBTC selling.

Day 12 of trading showed a substantial inflow compared to outflow, marking the third-largest money day ever in net money flow, bringing in $256 million.

Bitcoin ETFs

Mullarney further states that adding new Bitcoin ETFs has contributed to a net positive of $1 billion in ETFs, with an estimated 25,000 Bitcoin added to the market. The new Bitcoin ETFs now hold a total of 150,000 BTC in aggregate.

Miners Sell Most Coins Since May 2023

Despite these positive developments with Bitcoin ETFs, there is an ongoing increase in selling pressure from miners. A recent CryptoQuant report reveals that miners have sold the most coins since May 2023.

The flow of coins from miner wallets to spot exchanges reached its highest value since May 16, 2023, with over 4,000 Bitcoin amounting to approximately $173 million in selling pressure.

Bitcoin ETFs

Although miners have increased their selling activity, CryptoQuant asserts that the market has absorbed this pressure “calmly”. It is important to note that the reserves in mining portfolios have remained at the same level since the beginning of January.

CryptoQuant highlights that it is crucial to consider that these actions do not necessarily indicate a “dump” by miners. The firm concluded:

It is true that there were several interactions with exchanges during this period, some quite significant, but this does not correspond to a “dump” on the part of these entities. Furthermore, it is necessary to be careful when reading messages like “miners are dumping coins”, this analyzes may not take into account the return of these coins to miners’ wallets.

New All-Time High For Bitcoin After November?

Renowned crypto analyst, CryptoCon, cautions against the belief that “this time is different” for Bitcoin, highlighting the recurring nature of its market cycles. With three completed cycles and a fourth underway, CryptoCon emphasizes that historical patterns, including the launch of Bitcoin ETFs, have consistently influenced Bitcoin’s price trajectory.

CryptoCon emphasizes that Bitcoin’s price movements have followed distinct cycles, and he warns against the notion that each cycle will deviate significantly from the preceding ones.

Despite the anticipation surrounding the launch of ETFs, historical evidence suggests that they have coincided with local price highs rather than instant new all-time highs.

CryptoCon argues that the repeated occurrence of such patterns should serve as a reminder that “this time is different” often proves to be an illusory belief.

According to CryptoCon’s analysis, a period of sideways movement is expected to commence soon after the completion of the ongoing correction, which saw BTC retrace to the $38,500 level on Tuesday, January 23.

This phase is predicted to last approximately four months, culminating in a second early price peak in June 2024, according to Crypto Con.

Following this, the analyst foresees the possibility of new all-time highs occurring after November 28th, 2024. However, it is crucial to note that the cycle’s peak will occur within approximately 21 days from this date, around November 28th, 2025.

Bitcoin ETFs

Featured image from Shutterstock, chart from TradingView.com

24th January 2024

FTX Unloads $1 Billion GBTC Shares; Will The Bitcoin Rally Be “Vicious”?

Fred Krueger, an investor and crypto analyst, is predicting a “vicious” Bitcoin (BTC) rally shortly. He cites the recent unprecedented accumulation of the coin by Wall Street heavyweights.

This surge in institutional interest coincides with the recent approval of the first spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC).

Wall Street Ramping Up Bitcoin Purchase

In a post on X, Krueger pointed to the substantial Bitcoin purchases by major financial institutions, including Fidelity Investments, BlackRock, and Ark Invest. To illustrate, the analyst noted that Fidelity was buying approximately 4,000 BTC every day.

On the other hand, Ark, Krueger continues, has been gobbling upwards of 1,500 BTC daily. BlackRock, the world’s largest asset manager, has yet to release its Bitcoin holdings. However, based on the pace of Ark Invest and Fidelity Investment’s accumulation rate, BlackRock is likely buying coins at a faster pace. So far, Lookonchain data places BlackRock’s IBIT holdings of BTC at over 44,000.

ETF funds buying BTC | Source: Lookonchain

If anything, the rate at which these Wall Street institutions are doubling down on Bitcoin is a net bullish for price. Notably, BTC demands remain high more than a week after the United States SEC authorized the first spot of Bitcoin ETFs. That they are steadily buying suggests that institutions are bullish about Bitcoin’s potential.

The heightened pace of BTC accumulation is less than three months before the network halves its miner rewards. The Bitcoin halving event in early April will reduce miner rewards from 6.25 BTC to 3.125 BTC. If past price performance guides, the resulting supply shock might trigger another wave of higher highs, even lifting prices above 2021’s peaks of $69,000.

BTC Falls, FTX Unloads Millions Of GBTC Shares

Even amid the overall optimism, BTC is still struggling. Days after the approval of spot Bitcoin ETFs, BTC has been trending lower, shedding double digits. It even temporarily fell below $40,000 on January 23 before recovering to spot rates.

Analysts pin the sell-off to FTX, the defunct crypto exchange, off-loading an estimated $1 billion of Grayscale Bitcoin Trust (GBTC). With the FTX estate selling their stake in GBTC, prices are expected to stabilize as the unique selling event is alleviated and institutions double down, buying more BTC at spot rates.

Observers also note that GBTC outflows were matched or surpassed by the spike in inflow to other funds, mostly BlackRock’s ETF product.

20th January 2024

Bitcoin Spot ETFs Approved After 14 Years- The Journey So Far

The year 2024 marks the dawn of a new era, not just for technology but for finance, as a major victory was achieved for Bitcoin Spot ETFs (Exchang-Traded Funds). It’s now the era where the past will be appreciated for its foresight and doggedness.

When the pioneer cryptocurrency and digital currency, Bitcoin launched in January 2009, it was nothing like a real-world asset or of an ‘agreed’ digital value, but an almost neglected bag of gold as it faced enough rejection from all phases. Even with Satoshi’s Whitepaper, Bitcoin wasn’t given a cordial welcome in the world of finance.

However, for all its promise, BTC remained shrouded in an air of mystery and skepticism. It took several years for Bitcoin to cement its value in the world of technology, finance, and the digital economy, assuming a giant role amidst many other cryptocurrencies.

However, On January 10, 2024, the SEC, in its official filing, approves all 11 Bitcoin Spot ETFs. This long-awaited green light from the US SEC marked a watershed moment, not just for Bitcoin, but for the entire cryptocurrency industry.

The 14-year journey to this point was arduous and paved with skepticism; regulatory hurdles loomed large, with the SEC citing concerns about market manipulation and investor protection as justification for repeated rejections. Attempts like Bitcoin futures ETFs offered limited exposure, failing to capture the true essence of a spot ETF’s direct price tracking.

Bitcoin Spot ETF Explained

The recent approval of Bitcoin spot ETFs has stirred excitement across the financial landscape. But what exactly are these instruments, and what impact will they have on the future of BTC and, more broadly, on the investment landscape?

Bitcoin “Spot” ETFs (exchange-traded funds), unlike their futures-based counterparts, don’t track the price of Bitcoin futures contracts. Instead, they take a more direct approach, holding the underlying asset – Bitcoin itself – in secure digital custodians.

This eliminates the potential for “basis risk,” a phenomenon where futures prices deviate from the actual cash price of Bitcoin. Simply put, Spot ETFs offer a more straightforward and transparent way to gain exposure to BTC’s price movements, akin to traditional gold-backed ETFs.

Bitcoin Spot ETFs function similarly to their traditional counterparts, such as those tracking stock market indices. They pool investor capital, purchasing Bitcoin and holding it securely. Each share of the ETF represents a fractional ownership of the pooled Bitcoin, allowing investors to participate in the market without directly holding or managing the cryptocurrency themselves. This eliminates technical complexities and potential security risks, particularly for those with limited crypto experience, potentially broadening the base of Bitcoin investors.

The Genesis Of Bitcoin ETFs (Early Days and Conceptualization – 2013-2017)

The earliest sparks of a Bitcoin ETF concept date back to 2013, when the Winklevoss twins first proposed their Gemini ETF. Winklevoss twins, Cameron and Tyler, both tech entrepreneurs with a vision in 2013, submitted the first application for a Bitcoin ETF, the Gemini ETF, sparking the decade-long journey to regulatory approval.

This audacious proposal was outrightly rejected by the SEC during the tenure of its former chairman, Jay Clayton, who later resigned in 2020 and became a supporter of cryptocurrency. Interestingly, Clayton is now actively involved in crypto regulations when he joined the advisory board of Fireblocks, a crypto custody platform.

The following years were a crucible of innovation and uncertainty. While Bitcoin’s market capitalization surged, attracting both fervent supporters and cautious observers, the SEC remained hesitant. The regulator’s concerns about market manipulation, price volatility, and the nascent state of blockchain technology were cited as justifications for repeated rejections of subsequent ETF proposals, including Grayscale’s attempt to convert its Bitcoin Investment Trust into a spot ETF.

Yet, amidst the rejections, there were flickers of progress. Technological advancements improved blockchain security and custody solutions, addressing initial concerns about vulnerability and potential wash trading. The global adoption of Bitcoin, particularly in Canada with its approval of Spot ETFs in 2021, served as a compelling case study for increased accessibility and market stability.

This period also saw the SEC’s stance slowly evolve. The appointment of Gary Gensler as SEC Chair in 2021 brought a newfound openness to dialogue and exploration of potential regulatory frameworks for cryptocurrencies. The approval of the first US-listed futures-based bitcoin ETF in October 2021, despite its limitations, offered a glimpse of what could be.

The Turning Point: A Decade Of Persistence Pays Off (2018-2023)

While the 2017-2018 crypto boom and subsequent crash sent shockwaves through the industry, it also served as a crucible, forging resilience and fueling a renewed focus on compliance and innovation. Industry figures like Grayscale, undeterred by previous rejections, continued to refine their proposals, incorporating crucial safeguards and addressing regulatory concerns.

This relentless pursuit of approval finally yielded results in 2023. In May, Cathie Wood’s ARK Investments filed for a spot bitcoin ETF, setting a definitive deadline for the SEC’s decision.

Then, in June, BlackRock’s entry into the arena with its own Spot Bitcoin ETF application sent ripples of excitement through the financial world. This move by a traditional financial giant signalled a crucial shift in sentiment, demonstrating growing institutional confidence in BTC’s potential.

The months that followed were a whirlwind of activity. A flurry of applications from firms like Fidelity and Invesco poured in, fueled by the momentum of BlackRock’s move and the prospect of imminent approval. In August, a pivotal legal victory for Grayscale in the D.C. Circuit Court further strengthened the case for spot ETFs, forcing the SEC to re-examine its previous rejections.

Finally, the SEC, in a historic decision, greenlighted 11 spot bitcoin ETF proposals, including those from BlackRock, Fidelity, and VanEck. This moment marked the culmination of a decade-long struggle, signifying the mainstream acceptance of investor participation in the cryptocurrency space.

Ripples Across The Crypto Landscape: Implications Of Bitcoin Spot ETFs (2024)

The arrival of spot ETFs has cast a wide net, sending ripples across various spheres of the financial world. There are a lot of potentials and challenges presented by spot ETFs, vital impact on market stability, institutional adoption, and regulatory oversight. There are positive predictions that the Bitcoin market cap could rise above $1 Trillion after the launch of Bitcoin Spot ETFs.

Let’s contemplate the broader significance of this pivotal moment, what it means for the future of finance, and its relationship between technology and traditional financial systems here.

Investor Crossroads

For retail investors, Spot ETFs offer a convenient and familiar way to participate in the Bitcoin market without directly holding the cryptocurrency. This opens the door to broader adoption and increased liquidity, potentially leading to smoother price discovery and reduced volatility. The influential American magazine, Forbes predicted the BTC price will trade as high as $80,000 as a result of Bitcoin Spot ETFs’ approval.

The year 2024 is also shaping up to be a good one, if not one of the best seasons for cryptocurrency, especially Bitcoin, as it’s the season for Bitcoin halving, which will have another mega impact on the crypto industry.

However, the inherent risks of Bitcoin, including price fluctuations and potential exposure to fraud, must not be underplayed. Investors should approach spot ETFs with cautious optimism, ensuring a proper understanding of the technology, market dynamics, and associated risks before venturing in.

Institutional Embrace Bitcoin

The arrival of spot ETFs marks a significant step towards institutional acceptance of Bitcoin. The involvement of established financial institutions like BlackRock and Fidelity lends credibility to the cryptocurrency and paves the way for further integration with traditional financial products and services.

Concerns remain about the impact of institutional involvement on market manipulation and potential conflicts of interest. However, regulatory oversight and robust compliance frameworks will be crucial in ensuring a fair and transparent market for all participants.

Market Redefined

Spot ETFs could potentially lead to greater market stability by introducing institutional investors and their risk management expertise. This could mitigate some of the inherent volatility of the cryptocurrency market, attracting a wider range of investors and fostering sustainable growth.

The SEC’s approval represents a cautious acceptance, not a blank check. Further regulatory clarity and potential adaptation of existing frameworks might be required to effectively address the unique challenges posed by the integration of cryptocurrencies into mainstream financial systems.

Beyond Bitcoin

Spot ETFs could act as a gateway for investors to explore the broader crypto landscape. Their familiarity and ease of access might encourage exploration of other promising blockchain-based projects, accelerating the overall growth and development of the cryptocurrency ecosystem.

The success of spot ETFs will hinge on the continued evolution of blockchain technology and associated infrastructure. Scalability, security, and user experience will remain key areas of focus for ensuring the smooth functioning and widespread adoption of crypto-based financial products.

The 11 Spot Bitcoin ETFs products (with their ticker symbols) approved on January 10, 2024, are:

Blackrock’s iShares Bitcoin Trust (IBIT)
ARK 21Shares Bitcoin ETF (ARKB)
WisdomTree Bitcoin Fund (BTCW)
Invesco Galaxy Bitcoin ETF (BTCO)
Bitwise Bitcoin ETF (BITB)
VanEck Bitcoin Trust (HODL)
Franklin Bitcoin ETF (EZBC)
Fidelity Wise Origin Bitcoin Trust (FBTC)
Valkyrie Bitcoin Fund (BRRR)
Grayscale Bitcoin Trust (GBTC)
Hashdex Bitcoin ETF (DEFI)

Conclusion

The approval of Bitcoin spot ETFs is a watershed moment, not just for the cryptocurrency itself, but for the entire financial landscape. It marks a new chapter in the saga of Bitcoin, one where its disruptive potential can be harnessed within the framework of established financial systems.

Also, this path forward is paved with both opportunities and challenges. Navigating regulations and addressing investor risk concerns are important to ensure seamless integration with traditional financial systems and regulatory bodies, which will be crucial in determining the ultimate success of this technological leap.

Final Thoughts

The approval of Bitcoin spot ETFs is not merely a regulatory green light; it’s a resounding declaration of Bitcoin’s arrival on the main stage of finance.

However, the journey is far from over. This approval is a milestone, not a destination. As we stand at this turning point, it’s important to remember the spirit of defiance that birthed BTC. It was born from a desire for autonomy, for freedom from centralised control, and for a more equitable financial system.

While ETFs offer a bridge between this decentralized world and the established financial order, it’s crucial not to lose sight of these core principles.

BTC price chart from Tradingview.com (Spot Bitcoin ETFs)

16th January 2024

Ethereum Trouncing Bitcoin, ETH/BTC Ratio Bouncing Higher: Will This Trend Continue?

Amidst a volatile crypto market, Ethereum (ETH) is gaining momentum, outperforming its long-time rival Bitcoin (BTC). According to Kaiko data, the ETH/BTC ratio has steadily risen, rebounding from multi-year lows.

ETHBTC ratio trend | Source: Kaiko on X

ETH/BTC Ratio Rising, ETH Momentum Building

The ETH/BTC ratio technically gauges market sentiment towards these two leading crypto. The recent rebound indicates investors are increasingly bullish on Ethereum’s potential relative to Bitcoin.

This upward trajectory is fueled by growing optimism surrounding the potential approval of spot Ethereum ETFs and the general confidence that markets will trend higher in 2024. The prospect of this product entering the market has also injected fresh energy into the ETH ecosystem, lifting the second most valuable coin by market cap.

After protracted lower lows, the ETH/BTC ratio began rising immediately after the United States Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs last week. This unexpected shift, analysts observe, is primarily because of increasing confidence in the SEC approving a similar product for ETH.

Spot Ethereum ETFs, which would provide direct exposure to the Ethereum market, would make it easier for institutional investors to benefit from the volatility of ETH. So far, the SEC has approved an Ethereum Futures ETF, which, unlike the spot ETF, tracks an index, not the direct price of this asset.

Blackrock is among the leading Wall Street giants interested in issuing a spot Ethereum ETF. Considering its history of success, the decision by one of the world’s leading asset managers to apply for this product is an endorsement of its prospects. Earlier, Larry Fink, the CEO of BlackRock, said Ethereum, despite its scaling challenge, might spearhead the tokenization drive in the years ahead.

US SEC Yet To Clarify Whether Ethereum Is A Commodity Or Security

Even so, the SEC has yet to clarify whether ETH, a coin pre-mined with some assets distributed to the Ethereum Foundation, is a commodity like Bitcoin. Earlier, Gary Gensler, the chairperson of the SEC, was cornered by the United States policymakers to give the agency’s stand on the coin but didn’t.

Nonetheless, with the prospect of spotting Ethereum ETFs and the dominance of Ethereum in decentralized finance (DeFi) and non-fungible tokens (NFTs), ETH will likely continue outperforming BTC in the coming months. Price action data shows that ETH is already up 20% versus BTC in the past trading week.

16th January 2024

Bitwise CIO Equates Bitcoin ETF Impact To 1.4 Halvings: What This Means

Following last week’s launch of 11 spot Bitcoin exchange Traded-Funds (ETFs) in the United States, Matt Hougan, Chief Investment Officer (CIO) at Bitwise, has offered a compelling perspective on the potential impact of these ETFs on the Bitcoin market. His remarks come at a critical juncture, with the next Bitcoin halving event anticipated in mid-April 2024.

Spot ETFs Could Have Impact Like 1.4 Bitcoin Halvings

Hougan draws a parallel between the impact of Bitcoin ETFs and the Bitcoin halving events. He states, “Crypto natives have a good mental model for the impact of Bitcoin ETFs on the market: The halving.” He further explains the historical context, “Roughly every four years, the amount of new bitcoin being created falls in half. Bitcoin’s price has historically risen in the year +/- surrounding the halving.”

In April, when the block number hits 740,000, the reward will fall from 6.25 to 3.125 BTC. Highlighting the supply-demand dynamics of Bitcoin, Hougan remarks, “Bitcoin’s price is set by supply and demand. If you reduce new supply, that should be (and historically has been) good for prices.” He then quantifies the impact of the next halving, “At current prices, it will remove approximately $7 billion in new supply from the market each year.”

Moving to the core of his analysis, Hougan compares the expected inflows from ETFs to the halving effect. He notes that estimates for ETF inflows vary, but many people think that these products will pull in somewhere around $10 billion per year for the foreseeable future.

“If that happens, that means the direct impact of the ETF on Bitcoin’s supply/demand balance is something like 1.4 halvings,” Hougan claims.

However, he cautions about the timing of these impacts, saying:

Note that ‘halvings’ don’t impact prices overnight. If the next halving takes place on April 22, we don’t expect prices to increase sharply on April 23. Historically, prices have risen in +/- the year surrounding each halving. The same will be true for ETFs.

An Even Greater Scope?

Hougan also highlights the indirect benefits of ETFs. According to him, these products could have indirect benefits that aren’t captured in his analogy. “IMHO, the ETF is a significant positive for regulation, long-term education, etc. It will substantially increase the number of people interested in crypto, and therefore have a multiplier effect.”

Concluding his thoughts, Hougan says, “Still, the halving is a pretty good mental model for the direct impact of ETFs: ~1.4 halvings, plus the significant ancillary benefits. We’ll take it.”

Hougan’s estimate of $10 billion per year of net inflows for the spot Bitcoin ETFs is quite conservative. Analysts from Standard Chartered predicted a few days ago that there will be inflows of $50 billion to $100 billion this year. If $100 billion does indeed flow into the ETFs, the products could even have an impact as strong as 14 BTC halvings.

At press time, BTC traded 42,964.

Bitcoin price

12th December 2023

Bitcoin “Washout” Completed, BTC Ready For $48,000—And Higher

Earlier today, Bitcoin (BTC) flash crashed to as low as $40,400 before rebounding to spot levels. This sudden drop triggered what Mike Alfred, a crypto value investor, said was a “textbook washout” necessary to liquidate speculators.

The drop and bounce, Alfred further explained, has “wiped out open interest and is exactly what you want to see” before prices recover, possibly edging to $48,000 in the coming sessions.

Bitcoin Drops, Over $120 Million Liquidated

The washout, if past even guides, might have dented sentiment, forcing inexperienced holders and traders to take profit, allowing HOLDers more control. If that’s the case, considering that the uptrend remains when Bitcoin’s price action is analyzed from a top-down preview, it could be the foundation for further gains in the days ahead.

Besides the heightened volatility and likelihood of potential profit-taking volatility, the resulting correction also led to some liquidation. According to Coinglass data on December 11, the flash crash saw over $105 million of leveraged long positions liquidated.

Conversely, more than $15 million in short positions forcefully closed as prices quickly recovered, going against some traders’ positions.

Bitcoin liquidations | Source: Coinglass

While responding to Alfred’s preview, some observers noted that liquidating high-leveraged long positions has effectively removed bearish elements from the market. In turn, this has positively paved the way for more price gains in the days ahead.

Will BTC Float To New All-Time Highs?

Looking at the Bitcoin daily price chart, the uptrend remains even with the coin consolidating in lower time frames. Whether today’s sell-off will be confirmed in the next 24 hours remains to be seen.

However, from the candlestick arrangement in the daily chart, the long lower wick suggests that lower lows are being rejected. Notably, the coin has support at the 20-day moving average, highlighting the importance of this dynamic line.

The price chart shows that the $45,000 level is critical resistance. If there is a solid, high volume growth above this level, BTC might not only expand above $48,000 and $50,000, but it could anchor the leg up towards $69,000 in the next coming weeks.

Market participants view the potential approval of the first Bitcoin ETF in early January 2024 by the Securities and Exchange Commission (SEC) as a bullish catalyst for BTC bulls.

Amid evolving crypto regulations in the US, Europe, and beyond, a regulated ETF would provide institutional investors with a more accessible way to gain exposure to Bitcoin, potentially driving demand and pushing prices higher.

6th October 2023

This Trader Thinks Bitcoin Is Undervalued Below $30,000: Time To Buy More BTC?

On X, one trader going by the handle “CryptoJelleNL” is convinced that accumulating Bitcoin below $30,000 can be rewarding. The trader expects prices to not only expand towards all-time highs printed in 2021 at around $69,000 but break above $100,000 in the coming sessions.

BTC may be undervalued below $30,000| Source: "CryptoJelleNL" on X

Although the analyst didn’t give timelines, the “game plan remains the same,” acknowledging that it will be a “tough mental battle” before exiting the market when BTC soars above $100,000, nearly 4X at spot rates. It is not immediately clear precisely at what price the analyst entered.

Responding to a tweet, CryptoJelleNL said the strategy is not to buy between $30,000 and around $70,000 because doing so will only increase the average “entry-level.” This strategy was proposed by an X user who preferred dollar cost averaging (DCA) using lower capital.

In DCA, an investor makes periodic purchases of a target asset at low costs to dampen the effect of volatility and reduce the overall entry price. This system can be effective for HODLers, like in the case of CryptoJelleNL, and for traders who can’t time the market.

Will Bitcoin Break Above $30,000?

Even so, time will tell whether Bitcoin will eventually recover from spot rates, soaring above $30,000 and July 2023 highs. Looking at price charts, bulls have a chance, at least in the short to medium term.

Prices remain tight, trading above the $25,200 primary support and $28,000 and $30,000 resistance zone. Moreover, trading volumes are lower, suggesting that activity is generally low, with most market participants not keen to engage at spot levels.

Even so, a breakout above $32,000 might spark activity, pushing prices toward the all-time high in a welcomed buy trend continuation formation in H1 2023. Looking at the weekly chart, prices have mostly been consolidating from June 2023, oscillating between $32,000 on the upper end and $25,000 on the lower end.

Former BitMEX CEO Says BTC Will Roar To $750,000

Arthur Hayes, co-founder and former CEO of BitMEX, believes BTC will explode to around the $750,000 and $1 million level by 2026.

In his view, the Bitcoin halving event, a supply shock that will halve the rewards distributed to miners, and the potential approval of a spot Bitcoin exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC) will be the primary drivers of demand. Bitcoin will halve miner rewards in 2024.

The SEC has hesitated to greenlight a spot Bitcoin ETF, though the complex derivatives product is already available in other jurisdictions, including Canada and Europe.