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Bitcoin Spot ETF Jitters Subside: Grayscale Outflows Drop To New Lows

Outflows from Grayscale’s Bitcoin Trust (GBTC) seem to be slowing down, as shown by the trading activity of Bitcoin ETFs. This comes as investor anxiety over Grayscale’s Spot ETF seems to finally be subsiding, with the entire ETF cohort continuing to attract huge trading volumes and rapid growth in assets under management. As a result, the GBTC saw daily outflows drop steadily over the course of the week to just $44.2 million on Friday, the lowest since spot Bitcoin ETFs went live.

Outflows Drop As Grayscale’s BTC ETF Stabilizes

After several weeks of elevated outflows totaling over $7.44 billion, investors pulled just $436.2 million of Grayscale’s Bitcoin Trust last week. Notably, the lowest daily outflow of $44.2 million came on the last day of the week.

Grayscale’s GBTC is undoubtedly the biggest Bitcoin ETF among its cohort. This is because GBTC was launched in 2013 as a Bitcoin trust available only in OTC markets., allowing it to grow over the years as it was the only go-to for investors looking to dive into the crypto industry.

However, after a lengthy regulatory procedure, the SEC finally approved GBTC’s conversion into a Spot Bitcoin ETF. Consequently, Grayscale’s new Bitcoin ETF went live on January 11, along with nine other recently approved ETFs. 

GBTC held around $27 billion worth of BTC assets when it first began trading as an exchange-traded fund (ETF). Surprisingly, Grayscale’s conversion into an ETF came along with a vast amount of withdrawals from investors, and by the end of January, GBTC had witnessed $5.55 billion worth of withdrawals. 

Many analysts have attributed Grayscale’s high management fees (1.5%) to the outflows. During this period, other Bitcoin ETFs continued to attract new money. BlackRock’s iShares Bitcoin Trust (IBIT) now has over $6.64 billion worth of BTC in its ETF, followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) with $4.73 billion.

What’s Next For Grayscale’s Bitcoin ETF?

While last week’s outflow data is an encouraging sign for Grayscale and the wider ETF market, outflows could continue in the coming weeks. Bankrupt crypto lending firm Genesis recently received court approval to sell its $1.3 billion worth of GBTC in order to repay its creditors. 

The prospect of a liquidation of such gravity has propelled concerns amongst investors of the potential downward implications on the price of BTC. However, many others remain optimistic. According to a report by crypto exchange Coinbase, full liquidation would have a neutral impact on the market as the majority of funds are expected to remain in the crypto ecosystem.

At the time of writing, Bitcoin was trading at $51,300, while Grayscale’s GBTC now had $22.7 billion worth of assets under management.

Bitcoin price chart from Tradingview.com

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What to Expect From Bitcoin in 2024

Expectations that U.S. regulators will approve spot bitcoin ETFs next year are driving prices higher. History suggests we might see a slowdown as we approach the halving in April 2024, says Path Crypto’s David Liang.

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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

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Red Hot Ethereum: Breach Of $2,000 Draws Major Players Into the Fray

The price of Ethereum (ETH) exhibited superior performance compared to Bitcoin (BTC) in the previous week, mostly because of the registration of Blackrock’s Spot ETF, which instilled optimism that ETH will surpass its previous peak in 2023 and exceed $2,500.

In a groundbreaking twist since the Ethereum (ETH) Shanghai upgrade earlier this year, the value of Ether has triumphantly surpassed the $2,000 milestone, propelled by the recent surge in Bitcoin (BTC) towards the $38,000 mark.

Ethereum Breaks Past $2K

At the time of writing, ETH was trading at $2,054, up 7% in the last seven days, data from CoinMarketCap shows.

Despite the lingering uncertainty, cryptocurrency aficionados exude optimism, envisioning forthcoming profits as certain investors, driven by impatience, eagerly await the unfolding market dynamics.

Cryptocurrency on-chain data analysis firm Lookonchain unveils a spectacle of whale activity amidst the surge in Ethereum prices. The report highlights notable transactions, with one whale raking in a staggering $154 million profit, while another faces a substantial loss of $183 million.

Within the thread, Lookonchain zoomed its lens on the whale using the “0xee47” address, showcasing a remarkable uptick in their Ethereum holdings by 3,200 ETH, equivalent to an impressive $6.7 million. The buildup signifies a significant advancement subsequent to the whale’s debut venture into ETH buys on July 5, 2022.

Currently, their portfolio consists of a significant amount of 183,740 ETH, which is estimated to be worth nearly $388 million. This indicates an unrealized profit of approximately $155 million.

ETH Price Gets Boost From Spot ETF Filing

Last week, the price of Ethereum experienced a significant increase, surpassing the $2,000 mark. This spike was attributed to the confirmation by BlackRock, a prominent investment management company, regarding their intentions to introduce an Ethereum Spot Exchange-Traded Fund (ETF).

This confirmation was made through a filing with the NASDAQ. According to on-chain data, a group of financially astute institutional investors engaged in significant purchases of Ether over the weekend, amounting to millions of dollars. This activity is likely a response to a positive news event that has generated optimism in the market.

The latest on-chain data supported the positive outlook for ETH. In particular whale transactions valued over a million dollars surged to their highest levels in seven months, as shown in the chart above.

Also, it was clear that the number of exchange names had grown. This supported earlier claims that whales were moving their hoards to make money.

(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 Rhys A. via Flickr

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$9 Trillion BlackRock Files Ethereum Spot ETF, What’s So Special About It?

Following BlackRock’s official filing of Spot Ethereum with Nasdaq, reports have confirmed that BlackRock’s Ether ETF plan has been confirmed by Nasdaq and is on its way to the US SEC to gain final approval. 

BlackRock Ethereum Spot ETF Confirmed

American multinational investment company, BlackRock has been making waves in the crypto space after news spread of NASDAQ listing the investment firm’s Ethereum Spot ETF, iShares Ether Trust in Delaware.

“BlackRock’s Ethereum ETF confirmed. They just submitted a 19b-4 filing with Nasdaq,” Bloomberg Research Analyst, Jeff Seyffart stated. 

While BlackRock’s Spot Bitcoin ETF proposal remains to be approved by the United States Securities and Exchange Commission (SEC), the $9 trillion asset management company has placed its focus on Ethereum Spot ETFs while it waits for the SEC’s final decision on Spot Bitcoin ETFs. 

The news of the Nasdaq Ethereum ETF filing comes as a major development for BlackRock’s move into the ETF world. Although the investment company remains tight-lipped on the ETH ETF reports flowing through the space, the possibility of an Ether Spot ETF approval could be a sign of the SEC’s approval of Spot Bitcoin ETFs in the future. 

Many crypto enthusiasts have predicted that the US SEC may continue its efforts to stop the growth of Spot Bitcoin ETFs by declining BlackRock’s Ether Spot ETF filing. 

However, in the case the regulatory body does approve the asset management company’s Ethereum Spot ETF, the SEC could be faced with potential contradictions in its decision-making processes. The acceptance of ETH Spot ETFs would stand in stark contrast to the previous disapproval of Spot Bitcoin ETFs.

Presently, the crypto community has been largely positive, as market metrics signal a potential rally for altcoins following BlackRock’s Ethereum Spot ETF confirmation. 

A crypto member has stated that the asset management company’s move into Ether Spot ETFs indicates strategic confidence in securing approval for Spot Bitcoin ETF in the future. 

ETH Price Skyrockets

Following the news of NASDAQ registering BlackRock’s Ethereum Spot ETF, the price of ETH has increased by over 9% and is currently trading at $2,086.92 according to CoinMarketCap.

Reports of the Ethereum Spot ETF filing have sparked a rally in the cryptocurrency, topping over $2,000 for the first time since April this year. ETH’s market volume has also increased by 171.53%.

Many crypto investors are looking forward to more positive developments in the cryptocurrency regarding Ethereum Spot ETFs as an official approval may indicate a potential long-term bull run for ETH.

Ethereum price chart from Tradingview.com (BlackRock Spot ETF)

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Bitcoin Could Benefit From ‘Flight To Quality’ Trend: Report

In the last seven days, Bitcoin has gone up by 10.50%, following a series of significant gains across the week. Most notably, the largest crypto asset surged by 7% on Monday following the emergence of fake news on the approval of the BlackRock iShares Bitcoin Spot ETF.

As expected, this price gain drew a plethora of reactions from various crypto enthusiasts and analysts.

In particular, Larry Fink, the CEO of BlackRock, stated in an interview with Fox Business that the BTC surge was partially due to the fake news of the spot ETF approval but also because of a growing demand for an investment safe haven. 

According to Fink, the increasing geopolitical tensions – citing the ongoing Israel-Palestine conflict – have created uncertainties driving investors to traditional assets such as gold, but also crypto assets. 

The BlackRock CEO describes this trend as a “flight to quality.”

Dissecting The Bitcoin ‘Flight To Quality’ Theory

Following Larry Fink’s statement earlier this week, blockchain analytics and research firm IntoTheBlock has now posted a report evaluating the feasibility of Bitcoin as a “Flight to Quality” asset. 

In the post on Friday, IntoTheBlock highlighted various factors that backed Fink’s claim. Firstly, the analytic firm stated that US bonds are experiencing a historic sell-off as the 10-year yields on long-term bonds hit 5% this week.

Generally, US bonds are considered one of the most secure investment forms. However, developments such as this are usually termed as negative. This is because an increase in bond yield leads to declining demand for existing lower-yielding bonds and in turn, the devaluation of these bonds. 

As expected, this increasing bond yield has resulted in a 20% depreciation of long-term US bonds over the last six months. Meanwhile, there has been a significant 53% decline in the value of these investment assets since March 2020. 

Bitcoin Records Less Volatility Than US Treasuries

Furthermore, IntoTheBlock highlighted that Bitcoin’s volatility is currently lower than that of these US long-term bonds, indicating it offers a higher level of stability to traditional investors looking at the value of their investment. 

Finally, the research firm pointed out Bitcoin’s remarkable performance during this bond market crash, likening it to the asset’s positive price movement during the series of US bank collapses earlier in 2023. 

The blockchain research firm noted the crypto market leader tallies with gold with a 7% gain already in October and is receiving more recognition as a favorable alternative investment asset by several Wall Street financial experts.

Considering all the factors listed above, IntoTheBlock states that there are growing signs that Bitcoin is becoming a safe haven for traditional investors and could largely benefit from a “Flight to Quality” movement, especially with the potential launch of spot Bitcoin ETF.

At the time of writing, Bitcoin is trading at $29,667 with a 0.27% loss in the last day. In tandem, the token’s daily trading volume is down by 18.70% and is currently valued at $15.86 billion. 

Bitcoin

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Bitcoin Begins Rally As Franklin Templeton Joins Race For BTC Spot ETF

Bitcoin (BTC) has welcomed another noteworthy decision from the global investment firm Franklin Templeton. With a portfolio spanning various financial instruments, the company is now setting its sights on one of the most sought-after financial products in the digital currency realm: a spot Bitcoin exchange-traded fund (ETF).

This development signifies the firm’s progressive stance on digital assets and underscores the increasing mainstream acceptance of cryptocurrencies, particularly Bitcoin. Following the news, BTC has surged 4.2% in the past day, breaking above $26,000, as of this writing. 

Details Of The Franklin Spot BTC ETF

Based on recent filings, the proposed offering has been dubbed the “Franklin Bitcoin ETF.” One of the fundamental characteristics of this ETF would be its primary assets—essentially constituted of Bitcoin.

Coinbase Custody Trust Company, a subsidiary of one of the world’s leading cryptocurrency exchange platforms, will serve as these assets’ custodians.

Such a collaboration could provide the proposed fund an extra layer of credibility and security, given Coinbase’s longstanding reputation in the crypto space.

Another critical aspect to consider is the chosen trading platform. If the Securities and Exchange Commission (SEC) approves, Franklin Templeton’s Bitcoin ETF will see its shares being traded on the Cboe BZX Exchange.

In determining Bitcoin’s pricing, the filing indicates a reliance on the Chicago Mercantile Exchange (CME) CF Bitcoin Reference Rate, specifically the New York Variant.

Bitcoin Begins Rally After Bouncing Off $24,900

Following the Franklin Templeton spot Bitcoin ETF filing disclosure, Bitcoin has shown signs of recovery. The top crypto experienced a slight surge, breaking the downward trend that had dominated the market in recent weeks.

Over the past 24 hours, Bitcoin has surged by nearly 3%, trading for $26,185 as of this writing. Particularly, the asset broke away from the stagnant price zone of around $25,000 observed over the past week.  

Bitcoin (BTC) price chart On TradingView

Complementing its price movement, Bitcoin’s trading volume experienced a significant uptick. A comparison reveals that while the trading volume was as low as $1.7 billion last Wednesday, it increased to $18.4 billion in the past 24 hours.

Notably, the financial industry’s anticipation for the first-ever spot crypto ETF is palpable. Franklin Templeton’s decision, while bold and promising, enters a domain where the SEC has shown consistent reticence.

Over the last month, the regulatory body decided to postpone its decisions concerning proposals for spot Bitcoin ETFs. This delay can be attributed to the SEC’s current process of sifting through the influx of recent applications in this category. There hasn’t been a single spot crypto ETF that has secured the SEC’s endorsement.

Featured image from iStock, Chart from TradingView