Two wealth managers on Wall Street will support spot Bitcoin ETFs nearly two months after the products debuted on major U.S. exchanges.
Bank of America’s Merrill Lynch and Wells Fargo will allow clients with brokerage accounts to trade spot Bitcoin (BTC) ETFs following billions in demand eight weeks after it became available. Bloomberg first reported the news, citing unnamed sources with intimate knowledge of the matter.
Spot Bitcoin ETF issuers include some of the largest asset managers in the U.S., such as BlackRock and Fidelity. However, wirehouses and traditional banks initially refrained from offering the product to customers. Vanguard, Citi Bank, and UBS boycotted the Bitcoin-backed investment vehicle at launch, crypto.news previously reported.
Regardless, spot Bitcoin ETF providers have amassed over $20 billion in assets under management (AUM) underpinned by increasing Bitcoin prices. The token is up nearly 50% this year as the ETF wrapper draws capital from retail investors, hedge funds, and other capital controllers.
BTC chart | Source: TradingView
Spot Bitcoin ETFs capture tradfi stakeholders
Citigroup and UBS began allowing select customers to purchase spot Bitcoin ETFs on platforms in January. Merrill Lynch and Wells Fargo will also offer Bitcoin exposure to clients who request it.
Another Wall Street stalwart, Morgan Stanley, is reportedly mulling enabling access to spot BTC ETF trading for its clientele. Bitwise chief investment officer Matt Hougan told CNBC that more tradfi giants would likely enter the market, bringing billions of dollars in sidelined capital into Bitcoin via ETFs.
Bitcoin’s price has been on the run for the past several months, having surged from under $20,000 to over $50,000 since June 2023.
While that was mainly driven by the anticipation and the subsequent approval of nearly a dozen spot Bitcoin ETFs in the States, it seems retail traders are still not present, which begs the question of whether their arrival could propel another price surge for the asset in the next few months.
How Did We Get Here?
Data from Google Trends shows the typical behavior of retail investors, as they tend to search more for investment options that are very hot. This leads to them entering the market in question in what has been termed as FOMO (fear of missing out).
The cryptocurrency market is perhaps best known for such sentiment changes as it tends to get overheated really quickly when the demand from such investors skyrockets. In turn, this leads to growing prices before the inevitable correction and the market cooling off.
The last such cycle was in 2021, when prices were booming, and the retail crowd was all around. Laser-eyes appeared on Twitter with promises of $100,000 per BTC in the next few months. That didn’t happen; BTC slumped in value, and retail investors disappeared.
Bitcoin started to recover in June 2023 when BlackRock filed to launch its own spot BTC ETF. Given the company’s mind-blowing success rate with ETFs, institutions started to pay more attention to Bitcoin, and the overall anticipation changed from “The SEC will never allow a spot BTC ETF” to “It’s a matter of when not if.”
That change led to growing hype and, subsequently, rising prices, and BTC soared from under $20,000 in June 2023 to over $40,000 in early January. Then came the actual approvals of 11 spot BTC ETFs, the inevitable sell-the-news moment, before the cryptocurrency went back on the offensive and soared past $50,000 for the first time in more than two years on the actual demand for those financial products.
But one thing still seems to be missing.
Where Is the Retail?
With large investors and institutions seemingly going after Bitcoin with large purchases, reports frequently emerge that smaller holders (sharks and shrimps) have been disposing of their BTC stash. Google Trends data shows something similar, as the worldwide queries for Bitcoin are far from the 2017 boom, the 2021 bull run, and even the 2022 industry crashes.
Aside from a brief spike around the ETF approvals in mid-January, the searches have barely surpassed the 2019 bear market and the 2020 Covid-induced correction.
Bitcoin Google Searches Worldwide. Source: Google Trends
This only goes to show that retail investors have not really arrived, even though BTC’s price has more than doubled since last June. However, the upcoming halving could change all of that, given Bitcoin’s price performance after each of the previous ones.
As such, it would be interesting to follow if the retail crowd could be behind another run that will result in a new all-time high for Bitcoin in the next few months.
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Bitcoin’s price tumbled to a weekly low of $50,664 on Feb. 21, narrowly avoiding massive liquidations; on-chain data analysis pinpoints the likely causes of the recent pullbacks.
After a remarkable 27% February uptick that saw Bitcoin (BTC) hit a 3-year peak of $52,985 on Feb. 20, Bitcoin is struggling to maintain momentum.
With miners ramping up profit-taking ahead of the upcoming halving event, a decline in ETF inflows threatens to scuttle the BTC price rally.
Bitcoin miners sold BTC worth $8.2 billion in previous 30 days
Bitcoin price dipped $50,664 on Feb. 21, sparking concerns of widespread liquidations as the bears looked to break below $50,000 for the first time since the Valentine’s Day rally. Market data shows the Bitcoin miners’ selling trend, and a slight blip in ETF inflows this week contributed to the pullback.
Bulls have managed to stage an instant rebound toward $51,500 at press time on Feb. 22, but a closer look at the on-chain data trail suggests the bull rally is not yet back on track.
Cryptoquant’s miner reserves metric monitors real-time balances held by BTC miners. It shows that BTC validators hold a cumulative balance of 1,824,201 BTC as of Feb. 22, a 160,000 BTC decline from the balances held on Jan. 31.
Bitcoin (BTC) miners cut reserves by 160,000 BTC (~$8.2 billion) between Jan. 31 to Feb. 22, 2024 | Source: CryptoQuant
Valued at about $51,500 per coin, the recently-traded 160,000 BTC are worth approximately $8.2 billion. Notably, the chart illustrates how the miners had intensified the selling frenzy by $102 million after BTC’s price hit a local peak of $52,858 on Feb. 15.
Typically, a sell-off among miners indicates a bearish sentiment among a significant bloc of stakeholders. With approximately 10% of the total circulation supply in their custody, the BTC miners significantly influence Bitcoin price action.
Without a commensurate demand surge, it is unsurprising that the latest wave of miners’ sell-off has coincided with Bitcoin prices tumbling to a weekly low.
Bitcoin ETFs have not kept up last week’s demand
The BTC price rally in the first half of February was attributed to the Bitcoin ETF making record-breaking inflows.
Ahead of the ETF’s weekly trading opening on Feb. 19, BTC hit a new 2024 peak in the early GMT hours as strategic investors looked to front-run potential gains if the ETFs pick up the buying trend from where they left off in the previous week. But that has not happened.
Bitcoin ETFs dialed down their buying trend this week. Feb. 19 – Feb. 22 | Source: TheBlock
For context, TheBlock’s ETF on-chain flow chart above shows historical changes in BTC balances held by Bitcoin ETF.
Unlike last week’s 17,480 BTC accumulation, Bitcoin ETFs have slowed the buying trend by 73%, acquiring only 4,680 BTC between Feb. 19 and Feb. 22.
In summary, there has been a decline in ETF demand this week, while miners are intensifying their selling spree ahead of the halving.
The two critical factors have been pivotal to BTC price tumbling towards $50,000 rather than breakout towards a new all-time high above $60,000 as the bulls anticipated, with the rapid accumulation ahead of the ETF trading hours on Feb. 19.
Price forecast: Bitcoin can hold above $48,500
Amid dwindling ETF demand and miner’s mounting selling frenzy, BTC price looks likely to hold above $48,500 if it loses the $50,000 psychological support level in the short term.
The Bollinger Band technical indicator further underscores this outlook by providing insights into potential support and resistance levels for Bitcoin’s short-term price movement.
With the 20-day Simple Moving Average (SMA) price currently at $48,560, it is a crucial support level below the $50,000 threshold.
This suggests that if the price were to drop below $50,000, the $48,560 level may act as a significant area of support, potentially halting further downward momentum.
Bitcoin (BTC) Price Forecast, February 2024 | Source: TradingView
If bullish momentum prevails and Bitcoin reclaims the $53,000 level, the upper Bollinger band indicates that the bears may emerge again, establishing a sell-wall at around $55,830.
This signifies a key resistance level that could impede upward movement, potentially leading to a consolidation phase or a pullback.
Given these technical dynamics, strategic swing traders may consider setting short-term stop-loss orders around the $45,000 area to manage risk in case of a breakdown below the $48,560 support level.
Conversely, bullish traders may target take-profit orders around the $55,000 mark, anticipating potential resistance near $55,830 and aiming to capitalize on any further upward movement.
Bitcoin traders are exhibiting cautious optimism as they refrain from “substantial short positions,” expecting continued price surges, according to analysts from Bitfinex this week’s Alpha report.
Despite Bitcoin’s notable surge that brought the asset to trade as high as above $52,000 for the first time since 2021, analysts note a decrease in the short-squeeze ratio compared to previous years. The reason behind this declining short-squeeze ratio is revealed in the report.
Whales Shun Short Positions Amid Bullish Sentiment
Analysts at Bitfinex Alpha report that large whale investors are refraining from “substantial short positions” due to their belief that prices will only continue to increase further.
The current market conditions are characterized by “tightening supply and increasing demand,” further supporting the bullish sentiment among traders.
According to the Bitfinex Alpha report, the behavior of Bitcoin holders suggests the emergence of early bull-market conditions. This is evidenced by a reduction in the volume of long-term holder supply experiencing losses, a trend that correlates with the ongoing rise in the asset’s price.
This observation suggests a positive outlook for Bitcoin’s price trajectory in the near term. The report noted:
Currently, less than 6% of the aggregate long-term holder supply by individual entities are held at a loss. Historically, similar instances where the long-term holder cohort held a comparable volume of Bitcoin in loss have been indicative of early bull market conditions.
Bitcoin Trajectory And Investor Sentiment
In the past 24 hours, Bitcoin has experienced a slight retracement of nearly 2%, following a week-long uptrend that propelled its price to trade above $52,000 for the first time since 2021. Despite this retrace, investors remain optimistic, with ongoing asset accumulation amid bullish predictions from analysts and experts.
Renowned financial guru Robert Kiyosaki recently made headlines with his bold prediction that Bitcoin will reach $100,000 by June 2024, further fueling optimism in the crypto community.
Moreover, recent whale activity in the Bitcoin market has caught the attention of analysts and investors alike. Crypto analyst Ali Martinez recently revealed that a specific class of Bitcoin investors, holding between 1,000 and 10,000 BTC, has accumulated the digital asset in recent weeks.
Data from on-chain analytics firm Santiment shows that whales in this category have added over 140,000 coins to their holdings in the last three weeks, equivalent to a substantial $6.16 billion.
This accumulation trend among whales reflects confidence in Bitcoin’s long-term potential and is a positive indicator for its future price trajectory.
Featured image from Unsplash, Chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Coinbase Custody reportedly now holds over 90% of all Bitcoin ETFs in the United States. This development was revealed by the crypto exchange’s CEO, Brian Armstrong, while appraising the company’s performance in the fourth quarter (Q4) of 2023.
Coinbase Emerges As Major Player In Bitcoin ETF Market
In an X post on February 16, Brian Armstrong shared specific highlights of Coinbase’s achievement in Q4 2023. In particular, He noted that the American crypto exchange has played a crucial part in facilitating the adoption of cryptocurrencies by traditional financial firms (TradFi).
A major part of this adoption is the Bitcoin ETF market which is worth $37 billion, ranking as the second largest commodity ETF market after Gold. Armstrong noted that Coinbase has played a significant role in this development, serving as custodian for 90% of the investment funds in the Bitcoin ETF market.
A few thoughts on our Q4 Earnings yesterday:
2023 was a great year for Coinbase and we’re in a strong financial position. We cut costs by 45% y/y and shipped products faster with a leaner team driving $95 million of positive net income for 2023, $964 million in positive Adj.… pic.twitter.com/XK8f0EQBdP
For context, a custodian is a regulated financial institution that holds customers’ securities and assets, providing protection against any form of loss or theft. Notably, Coinbase is listed as the custodian for eight of the 11 recently launched Bitcoin spot ETFs. These include BlackRock’s IBIT, Ark Invest’s ARKB, Bitwise’s BITB, and Grayscale’s GBTC, among others.
These statistics indicate that Coinbase is well placed to record larger milestones as the top traditional financial institutions are tipped to finally invest in Bitcoin ETFs, especially upon the proven success and stability of the Bitcoin spot ETFs.
According to Armstrong, other notable Coinbase achievements in Q4 2024 include the launch of the exchange’s international wing, and the layer-2 blockchain solution Base. The crypto exchange also claimed to slash its annual costs by 45% while generating a total income of $3.1 billion.
Looking Forward To 2024
In retrospect to 2024, Armstrong stated that Coinbase will maintain focus on its international expansion and new derivatives products. In addition, they will aim to promote the adoption of crypto payments by transforming the Coinbase wallet into a super app.
Finally, the exchange CEO states that Coinbase will continue to advocate for a clear regulatory framework applicable to the crypto space. Armstrong says that Coinbase is committed to this course and is willing to explore all means, including legal processes as well as engaging the federal legislators.
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
The recent Bitcoin rally, propelling its price to the $52,000 level, has positively impacted the stock of US-based cryptocurrency exchange Coinbase (COIN). After experiencing a notable dip to $115 at the start of February, Coinbase’s stock rose to $172 on Thursday, following a significant upgrade by a JPMorgan analyst.
Improved Prospects For Coinbase Amid Crypto Rally
According to a Bloomberg report, JPMorgan analyst Kenneth Worthington abandoned his bearish view on Coinbase weeks after downgrading the stock.
As Bitcoin traded higher, Coinbase shares gained as much as 7.8% following the upgrade. Worthington believes the exchange will likely benefit from the recent rally in digital asset prices, prompting him to shift his rating back to neutral.
This change in stance comes after Worthington’s January downgrade, where he predicted a potential deflation of enthusiasm for Bitcoin exchange-traded funds (ETFs).
However, contrary to his previous forecast, Bitcoin ETFs have been successful in terms of trading measures, and the price of Bitcoin has surged beyond $52,000, reaching its highest level since 2021. In a note to clients on Thursday, Worthington explained:
Given the acceleration in recent days of flows into Bitcoin ETFs and the significant price appreciation of Bitcoin and now Ethereum, we are returning to a Neutral rating on Coinbase as we see the higher cryptocurrency prices not only sustaining but improving activity levels and Coinbase’s earnings power as we look to 1Q24.
The daily chart shows COIN’s 4% uptrend in the past 24 hours. Source: COIN on TradingView.com
Coinbase’s stock experienced an 8% dip at the beginning of the year, following an impressive 400% surge in 2023. Analyst opinions on the stock remain divided, with buy, hold, and sell recommendations being roughly evenly split.
Worthington maintained his $80 price target on the stock ahead of the company’s earnings report, which is scheduled to be released after the market closes on Thursday.
Worthington emphasized that Coinbase’s business is closely tied to token prices, with its core revenue being transaction-based. As the value of tokens increases and trading activity gains momentum, fees based on the value traded are expected to drive higher trading volumes, ultimately contributing to improved revenue for Coinbase.
Bitcoin ETFs Witness Significant Trading Volume
On February 14th, the trading volume of Bitcoin ETFs showcased notable figures, with Blackrock’s IBIT recording the lead with $721 million in volume.
Grayscale’s Bitcoin Trust (GBTC) followed closely with $619 million, while Fidelity’s FBTC secured the third spot with $456 million. On the other hand, Ark Invest accumulated a volume of $169 million.
The nine ETFs’ total trading volumeamounted to approximately $1.5 billion. Notably, the largest ETFs experienced higher trading volume than the previous day, with IBIT surpassing $700 million and GBTC exceeding $600 million.
Bitcoin ETF’s February 14 trading volumes with Blacrock’s IBIT leading the pack. Source: AlexOtta on X
Intriguingly, before the trading session, GBTC sent less than half of the Bitcoin it sent to Coinbase the previous day. Despite this decrease, GBTC’s total trading volume was 50% higher.
As the demand for Bitcoin continues to surge, ETFs play a crucial role in facilitating institutional and retail investors’ participation in the cryptocurrency market. The increased trading volume of Bitcoin ETFs highlights investors’ growing interest and confidence in digital assets.
Currently, Bitcoin is trading at $51,900 and encountering a critical resistance level at $52,000.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
In contrast to Bitcoin-tracking exchange-traded funds (ETFs), gold-tracking ETFs have witnessed significant outflows this year.
On February 14, Eric Balchunas, an analyst at Bloomberg Intelligence, disclosed that gold ETFs in the top 14 rankings have experienced a combined outflow of $2.4 billion since January.
Gold ETFs Experience $2.4 Billion Outflows
BlackRock’s iShares Gold Trust Micro and iShares Gold Trust experienced significant outflows, with $230.4 million and $423.6 million lost, respectively. These outflows coincided with a 3.4% decline in gold prices since the beginning of the year, reaching a two-month low of $1,993 per ounce on February 14.
Only a few leading gold ETFs deviated from this trend, as VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF, and Proshares UltraShort Gold recorded minor inflows.
According to research conducted by the World Gold Council dated February 7, this downward trend contributed to a 2% decline in total assets under management (AUM), falling to $210 billion, and a 1% decrease in gold prices at that time.
Meanwhile, according to data from Lookonchain, Bitcoin ETFs have garnered significant inflows, accumulating a total of 705,566 BTC this year across nine approved funds.
Feb 14 Update:#iShares(#Blackrock) added 10,003 $BTC($518M) today and currently holds 105,280 $BTC($5.45B).
February 14 alone saw ETF inflows totaling a solid $631 million, with BlackRock’s ETF reaching the $5 billion mark. Bitcoin’s price has also experienced an increase, surging by 23.5% over the same period, reaching a two-year high of $52,483 on February 14.
Analysts Weigh In
Portfolio manager “Bitcoin Munger” remarked on the significant shift in investment preferences, highlighting BTC’s appeal alongside the substantial AUM losses faced by gold ETFs.
However, analysts like Balchunas cautioned against interpreting this as a mass migration from gold to Bitcoin, attributing it to a fear of missing out (FOMO) in the U.S. equity market.
Bitcoin pioneer Jameson Lopp, on the other hand, shared a chart comparing the performance of the two ETFs, inquiring about the status of gold advocate and Bitcoin skeptic Peter Schiff.
Earlier this month, the World Gold Council shed light on the global gold ETF outflows, citing a reduction in speculative positioning and headwinds from long-term Treasuries and the U.S. dollar as contributing factors to gold’s lackluster performance.
These developments contradict the prediction by Bloomberg senior commodity strategist Mike McGlone, who anticipated gold outperforming Bitcoin in 2024.
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On Feb. 12, Mechanism Capital partner Andrew Kang predicted that long-term Bitcoin demand flows this year would be between $40 billion and $130 billion.
There is a huge amount of global wealth and income that could potentially flow into crypto, he said, stating that the global aggregate income is around $52 trillion.
Current crypto ownership is around 10% globally. Even if crypto owners only allocate 1% of their income to digital assets annually, that’s still $52 billion flowing into the asset class per year and $150 million per day, he added.
Huge Bitcoin Inflows Expected
These estimates are conservative, he continued, as allocation is likely higher than 1% for many true believers, and business or institutional flows aren’t included.
Moreover, major sell flows like Mt.Gox and miner emissions are dwarfed by estimated buy flows. ETF inflows will further boost demand, and recent inflows have exceeded even the upper bounds of estimates.
The total inflow so far for all ETFs is $2.65 billion, according to Farside. This is the aggregate, which includes the Grayscale outflows, now beginning to slow. Both BlackRock and Fidelity have had more than $3 billion inflows each.
BlackRock themselves estimated an inflow of $150 billion to $200 billion over the next three years.
“People seem to forget that there has been massive consistent demand for Bitcoin even before these ETFs were approved.”
Long term $BTC demand flows this year I approximate to be $40-130B+
One of the most common cardinal sins of crypto investors/traders is underappreciating the amount of wealth/income/liquidity in the world and its spillover into crypto. We hear stats about the market cap of gold,… https://t.co/9HhqxSE6s2pic.twitter.com/9zFed3BJhP
He predicted that Bitcoin’s price will not spend much time below $40,000 and will rise to between $50,000 and $60,000 this month, hitting a new all-time high by March.
Previous ATH Pre-Halving
On Feb. 11, Bitcoin analyst Jamie Coutts also predicted that BTC “has the potential to reach previous all-time high pre-halving.”
All the extreme leverage and positioning from the fourth quarter has been cleansed for now, he stated. Moreover, options open interest is down 40%, and futures funding rates are “still positive but less exuberant.”
“ETFs continue to outpace supply by at least 2:1 and the halving is still months away.”
The final bullish factor is that only 10% of the volume moved at prices above the current level. “If BTC breaches $48.2k, there is scant overhead resistance,” he said.
🚀Why this #Bitcoin rally has the potential to reach prev ATH pre-halving;
1. All the extreme leverage and positioning from Q4 has been cleansed (for now). Options OI is down 40%, and Futures funding rates are still positive but less exuberant 2. ETFs continue to outpace… pic.twitter.com/zP9nYraSyF
Spot Bitcoin exchange-traded funds (ETFs) are nearing their first month of operation, with the landscape potentially set for consolidation by the end of 2024, according to Valkyrie Funds’ Chief Investment Officer, Steven McClurg.
In an exclusive interview with Decrypt on Feb. 10, McClurg said he anticipates a reduction in the number of issuers from 10 to “about seven or eight.” He attributes this forecast to the financial burdens associated with running a spot Bitcoin ETF, compounded by a competitive fee-lowering trend that threatens the profitability of struggling issuers. McClurg emphasized the critical asset under management threshold of $100 million as a determinant for an ETF’s viability.
Since the U.S. Securities and Exchange Commission approved the first Bitcoin spot ETFs on Jan. 10, the market response has been robust, with $4.5 billion traded on the first day alone. Recent data shows continued strong inflow, with $400 million reported in a single day, according to Bloomberg analyst James Seyffart.
Cointucky Derby Update. BIG net inflow day of over $400 mln. With almost 8 of the newborn nine took in money yesterday. $FBTC officially crossed $3 billion in AUM. $GBTC outflow streak continues with -$101.6 mln out pic.twitter.com/4RX4RsVxki
Reflecting on the past month, McClurg noted that market developments have largely aligned with Valkyrie’s projections. An unexpected event was the less severe than anticipated outflows from Grayscale, which, upon converting from a trust to an ETF, experienced a Bitcoin sell-off, leading to a temporary dip below $41,000. Despite this, McClurg foresees potential for future outflows that could benefit other ETFs.
Valkyrie, alongside heavyweight competitors like BlackRock and Fidelity, is navigating a crowded market. BlackRock’s iShares Bitcoin ETF and Fidelity Wise Origin Bitcoin Fund have surpassed $3 billion in assets under management within a month — overshadowing Valkyrie’s $123.7 million.
Despite the disparity, McClurg remains optimistic about Valkyrie’s performance, particularly against similar-tier competitors, attributing success to the firm’s digital asset expertise and traditional market experience.
The competition among ETFs has led to aggressive fee reductions aimed at attracting investors. Valkyrie aligned its sponsor fee with industry leaders BlackRock and Fidelity at 0.25%, a move McClurg views as necessary, despite his reservations about the timing of such cuts.
He warns that the financial sustainability of running a spot ETF could be jeopardized for issuers who are already underperforming. As a result, some may eventually exit the market due to unprofitability.
In January, analysts recorded a record trading volume in the blockchain of the first cryptocurrency; the figure amounted to $1.21 trillion.
The last time trading volume on the Bitcoin network rose above $1 trillion was only in September 2022, according to The Block. At that time, Bitcoin (BTC) was trading at around $20,000.
Source: The Block
According to CoinMarketCap, the first cryptocurrency is trading at $43,089 at the time of writing. Over the past 24 hours, the asset’s price has strengthened by 0.6%. The highest level over the past 24 hours was $43,147 and the lowest was $42,283. Bitcoin’s market capitalization is now $845 billion, with daily trading volume exceeding $15.6 billion.
Source: CoinMarketCap
The sharp increase in BTC trading volumes was accompanied by the approval of spot Bitcoin ETFs on Jan. 10 by the Securities and Exchange Commission (SEC). On the first day, the volume of exchange trading in new investment instruments exceeded $4.5 billion, and the price of BTC immediately rose to $48,800.
Another cryptocurrency that set a record was the surging of Solana (SOL). In January, the volume of transactions on the Solana network was up 30% compared to last month. Thus, the figure almost reached $1 trillion – $951.9 billion. Such a surge in activity has not been observed in the SOL blockchain for nearly two years.
The growth in transaction volume was primarily due to the excitement around the airdrop from the Jupiter aggregator. In addition, the rise in the value of SOL and the popularity of the new meme coin WEN also affected the indicator.
The US Securities and Exchange Commission made history in mid-January when it finally approved nearly a dozen spot BTC ETFs to launch on local exchanges after a decade of delays and rejections.
There was a big price run-up ahead of the approvals that resulted in a highly positive Q4 ’23 for BTC. However, the landscape changed on the day the ETFs launched in the US, and Bitcoin slumped by over ten grand in the following weeks. Has the asset finally bottomed?
The ETF Aftermath
All eyes in the financial world were on the US SEC at the start of the year, with multiple experts claiming that the regulator will finally allow spot Bitcoin ETFs in the country. As such, the anticipation led to a massive increase in BTC’s price, which soared past $40,000 for the first time in nearly two years.
The experts turned out to be correct, and the US watchdog greenlighted 11 such products on January 10, and they went live for trading on the next day amid record-setting volumes.
Bitcoin’s price reacted well at first and shot up to over $49,000 hours after the US exchanges opened on that Thursday, but the landscape changed later on. After an immediate retracement of over seven grand, BTC kept dumping and bottomed at $38,500 last Thursday. As such, the asset had lost more than ten grand in two weeks.
Since then, BTC’s price performance has been a lot less volatile but still positive, and the cryptocurrency currently stands at around $43,000. Thus, it has erased almost all losses induced after the ETF approvals.
The Botton Was Reached?
After this substantial decline, the community started speculating on whether the asset had indeed reached its post-ETF bottom as those approvals became a sell-the-news moment. Data from Santiment shows that this might be the case, especially when we compare social discussions.
They shot up in the second half of 2023 when the anticipation for the ETFs was on a high note, which led to a gradual increase in the greed factor. However, three weeks after the launch of the ETFs, Santiment said this indicator “has finally normalized,” suggesting that BTC’s price has gone through the post-approval volatility and could be preparing for the next big event of 2024 – the halving.
🥳 Historically, a high ratio of crowd discussions toward #Bitcoin is a sign of fear. However, since mid-2023, the euphoria & optimism surrounding the #ETF‘s has flipped high $BTC discussions into a greed indicator due to (arguably) unrealistic expectations for
Valkyrie is the first spot Bitcoin ETF issuer to leverage two separate crypto custodians for its fund, thanks to its deal with BitGo.
BitGo will provide custodial services for Valkyrie’s Bitcoin Fund (BRRR), safekeeping and storing a portion of the underlying Bitcoin (BTC) in the firm’s exchange-traded product. Valkyrie and BitGo reached the agreement on Jan. 17 but only filed with the U.S. Securities and Exchange Commission (SEC) on Feb. 1.
The strategy diversifies Valkyrie’s spot BTC ETF by splitting the risk across multiple crypto custodians, reducing single failure points, and bolstering the fund’s safety. Other issuers may eventually chart similar courses amid competition among asset managers.
Issuers raced to capture market participants and investors before and after the SEC approved spot Bitcoin ETFs on Jan. 10. Fees were a major talking point with these funds. Some issuers even offered fee waivers for up to six months.
Initially, Valkyrie boasted one of the highest fees at 0.8%, but the issuer rolled back its charge to 0.25% with BlackRock and Fidelity. However, the Valkyrie Bitcoin ETF has recorded far lower trading volume than the Wall Street heavyweights.
BlackRock became the first fund to out-trade Grayscale’s GBTC following billions of outflows from the mammoth fund over two weeks.
As stated in an SEC filing on Tuesday, the ETF provider Global X has withdrawn its application for a spot in Bitcoin ETF.
The CBOE BZX Exchange submitted a notice of withdrawal for the Global X Bitcoin Trust on January 26, roughly two weeks after the SEC approved 11 other spot Bitcoin ETFs.
Global X Withdraws Application
The Global X Bitcoin Trust’s initial application was submitted in August 2023, and despite two extensions for consideration in September and November, the exchange officially withdrew its proposal on January 26. As of December 2023, Global X had approximately $51 billion in assets under management in its ETFs worldwide.
Bloomberg Intelligence ETF analyst James Seyffart commented on the withdrawal, stating that it was not surprising, given prior indications. Seyffart mentioned in a post on X that the official withdrawal request for Global X ETFs’ Bitcoin ETF was expected, as it was known they were no longer in contention since at least early December.
Official withdrawal request for @GlobalXETFs‘ #Bitcoin ETF. This is not surprising because we have known they were out of the race since at least early December but now its official. pic.twitter.com/1ghjh3O5Hw
The decision to withdraw the application for a spot Bitcoin ETF comes amid a complex regulatory backdrop, notably characterized by the SEC’s landmark approval of spot Bitcoin ETFs on U.S. exchanges on January 10. While this marked a significant step forward, the overall regulatory environment remains uncertain.
Spot Bitcoin Approvals in the Spotlight
Earlier this month, the SEC approved 11 spot Bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT.O) and Grayscale Bitcoin Trust (GBTC.P), among others, concluding a decade-long struggle with the digital asset industry.
The move has sparked speculation about the SEC potentially approving spot Ethereum exchange-traded products in the near future. The commission has extended deadlines for proposals from asset managers BlackRock and Grayscale, with final decisions anticipated in May.
Despite approximately $5 billion in outflows from the Grayscale Bitcoin Trust following its conversion to an ETF as of January 26, there were $759 million in net inflows across all spot Bitcoin ETFs approved by the SEC on January 10.
Attention is now focused on the possibility of a spot Ethereum ETF, with notable firms such as Fidelity and BlackRock recently submitting applications for such products. Meanwhile, industry experts remain cautiously optimistic, awaiting the SEC’s final decisions on pending spot Ethereum applications.
While some, like Bloomberg ETF analyst Eric Balchunas, predict a high likelihood of approval by May, others, including Morgan Creek Capital’s CEO Mark Yusko, express more conservative estimates, highlighting the ongoing uncertainty in this evolving sector.
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The Bitcoin market is currently experiencing a turning point, largely driven by recent trends in Bitcoin exchange-traded funds (ETFs). Yesterday, Bitcoin’s price rose above $43,000, a movement closely tied to changing dynamics in ETF inflows and outflows, particularly involving the Grayscale Bitcoin Trust (GBTC).
On January 29, (Bitcoin ETF Day 12), a notable shift occurred. The Bitcoin spot ETFs witnessed a substantial net inflow of US$255 million, while Grayscale’s GBTC experienced a significant net outflow of $191 million. The other nine ETFs, led by Fidelity and BlackRock, saw a combined net inflow of $446 million, making it the third-highest inflow day for Bitcoin ETFs.
This scenario of high inflows and reduced outflows from Grayscale’s GBTC presents an intriguing change from previous days, where GBTC outflows dominated and weighed heavily on the market sentiment.
Crypto analyst @WhalePanda, who’s part of the “Magical Crypto Friends” YouTube channels (along with Samson Mow, Charlie Lee, and Riccardo Spagni), commented on this development, stating, “Net inflow of $250 million in a day is crazy. That’s 5800 Bitcoin being removed from the market in just one day.”
He highlighted the significance of this volume, especially when compared to the daily Bitcoin mining rate of 900 BTC. MicroStrategy bought $615 million BTC between November 30 and December 26.
While WhalePanda acknowledged that inflows will slow down one day, he expects this to happen later on. “The increased price is driving more exposure, leading to more inflows, which in turn pushes the price even higher. This is a classic example of the bull cycle flywheel mechanics at play, even before the halving,” he remarked.
The renowned crypto expert further elaborated that “the amount of Bitcoin float will significantly drop over the next couple of days and once the price starts moving with limited supply left… Things can go crazy. No, not $1 million crazy. Crazy for me is breaking ATH before halving.”
In a separate post on X, @WhalePanda expressed his outlook for the week, “This is going to be a big week for #Bitcoin. With GBTC outflows decreasing and a strong inflow day last Friday, we might be seeing the beginning of a new trend.” He emphasized the potential of this momentum to become a self-fulfilling prophecy, driving Bitcoin’s price higher.
Spot BTC ETFs Remain The Focus
Thomas Fahrer, co-founder of Apollo Sats, added context to these massive spot BTC figures, noting, “The 9 New ETFs hold more BTC than Tether, Tesla, Block, and all of the Public Miners combined. Soon they will surpass MSTR, and later even GBTC.”
Bitcoin holdings | Source: X @thomas_fahrer
Alex Thorn, head of research at Galaxy, commented on the potential implications for BTC’s price trajectory, especially in relation to ETH: “With Grayscale outflows appearing to slow down and other Bitcoin ETF flows remaining positive, I’m curious about the future direction of the ETHBTC cross. A lower trajectory seems like the path of least resistance in the near term.”
with grayscale outflows seeming to abate and other #bitcoin etf flows now appearing holding positive, i’m again wondering where the ETHBTC cross is headed. lower again feels like the path of least resistance near-term pic.twitter.com/DVPi1pdWP0
This confluence of ETF inflows, decreasing outflows from Grayscale, and the anticipation of the upcoming Bitcoin halving are creating a unique bullish market environment. However, at press time, BTC is trading below a key resistance at $43,444.
Featured image created with DALL·E, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
The primary focus continues to be on spot Bitcoin ETFs and Hong Kong players do not want to be left behind.
Harvest Fund Management’s Hong Kong branch is the latest entity to apply for a spot Bitcoin exchange-traded fund (ETF) with local regulators. This move aligns with Hong Kong’s preparations for its first wave of spot crypto ETFs.
First Spot Bitcoin ETF in Hong Kong
According to the Tencent report, Harvest aims to launch the city’s first spot Bitcoin ETF after the Lunar New Year holiday on February 10. Following the approval of several funds in the United States, Hong Kong regulators signaled their readiness to consider similar applications.
These ETFs are anticipated to offer a regulated avenue for digital asset investment, promising benefits such as fostering orderly markets for the asset class while simultaneously bolstering investor protection, and bridging digital asset platforms with traditional financial institutions.
However, challenges surface in the form of fee structures and regulatory adherence. Given the limited number of licensed crypto exchanges in Hong Kong, there’s pressure to maintain reasonable fees.
The regulators have detailed rigorous criteria for applicants, which encompass strict custodial regulations. They stipulate that ETF transactions must occur via an SFC-licensed crypto platform or authorized financial institutions adhering to HKMA’s regulatory standards.
Hong Kong Asset Managers Dive into Spot Crypto ETFs
Amidst Hong Kong’s rising importance as a crypto hub, Venture Smart Financial Holdings Ltd., a financial services company of the city-state announced plans to submit an application with the SFC to start the ETF. Brian Chan, group head of investment and product at the company, stated,
“It’s a market that has huge potential. Our goal is $500 million in assets under management by the end of this year.”
In an interview with Caixin earlier this year, Livio Weng, the chief operating officer of HashKey, a licensed crypto exchange in Hong Kong, revealed that approximately ten fund companies in the city are exploring the possibility of launching spot crypto ETFs.
Weng noted that these fund managers, including those backed by Chinese capital as well as others from Asia and Europe, are considering introducing spot crypto ETFs in Hong Kong.
Around seven or eight of these companies have already initiated discussions with Hong Kong’s SFC and have assembled teams to design these investment products.
HashKey, which obtained a license from the SFC to offer retail crypto trading services, also confirmed plans to consider participation in such funds in Hong Kong.
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Bitcoin advocate and CEO of Jan3, Samson Mow, has pinpointed a range of macroeconomic indicators that could signal an impending rally for Bitcoin. Mow focuses on exchange-traded inflows (ETF), Bitcoin’s Hashrate, and whale activity on prominent exchanges like Bitfinex.
The Jan3 CEO also mentioned the 200-week moving average (WMA) in forecasting Bitcoin’s trajectory. The recent data shared by Cypherpunk on X highlighting significant whale accumulation on Bitfinex further supports Mow’s Bitfinex whale indicator, suggesting an increased interest from large-scale investors in the flagship crypto.
Mow also looks beyond the crypto-specific data, considering global economic factors like Tether’s USDT Assets Under Management, government debt payments, and Debt-to-GDP ratios. The Bitcoin advocate believes these factors, along with nation-state adoption of Bitcoin, real inflation rates, and M3 money supply, could profoundly impact Bitcoin’s performance.
These are the #Bitcoin macro indicators I’m looking at:
Notably, Samson Mow has remained steadfast in his ambitious prediction for BTC, maintaining a $1 million price target for the crypto. Mow recently cautioned about the potential ‘max pain‘ accompanying a rapid ascent of Bitcoin to this monumental valuation.
Furthermore, Mow has recently suggested that this significant price milestone could materialize relatively quickly, possibly within days or weeks. However, according to the Jan3 CEO, the starting point for this potential surge is “TBD” (to be disclosed).
My main prediction is the run up to $1M happens in days to weeks. Starting point TBD.
Despite a recent dip below $39,000 last week, BTC has shown a slight increase, with an uptick bringing its price above $42,000. This recovery, though slight, aligns with the optimistic predictions of various analysts and experts, including Samson Mow.
BTC price is moving sideways on the 4-hour chart. Source: BTC/USDT on TradingView.com
SkyBridge Capital’s founder, Anthony Scaramucci, has also joined the chorus with an optimistic prediction for Bitcoin. Scaramucci’s analysis suggests a potential 300% increase in Bitcoin’s value post-halving, with a long-term price target of $400,000.
His estimates, based on historical data and market trends, indicate that the peak bullish period for BTC could be about 18 months after the halving event. These predictions are further supported by the recent developments in Bitcoin ETFs, including the filing of the first-ever Bitcoin spot ETF in Hong Kong, indicating a growing institutional interest in BTC.
Featured image from Unsplash, Chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Digital asset investment products saw significant outflows last week, totalling $500 million.
Analytics company CoinShares presented a report on the flow of funds in investment products based on cryptocurrencies from Jan. 20 to Jan. 26, 2024. According to available information, Grayscale Investments’ spot Bitcoin (BTC) ETF played a central role in the report. Over the week, the outflow of funds from the crypto fund exceeded $2.2 billion. At the same time, the total amount of withdrawn assets crossed the $5 billion mark.
Source: CoinShares
At the same time, the investment product of financial giant BlackRock continues to receive significant infusions, analysts say. Over the past week, the influx of funds amounted to $744 million. In second place in this indicator is the crypto fund of Fidelity Investments, which received financial injections of $643 million.
In total, spot Bitcoin ETFs recorded an inflow of $1.84 billion. Moreover, since their launch on January 11, 2024, crypto funds have received infusions of $5.94 billion.
At the regional level, the main outflow occurred in the USA ($409 million), Switzerland ($60 million) and Germany ($32 million). A net inflow of assets was observed only in Brazil – $10.3 million and in France – $100,000.
Analysts note that due to spot Bitcoin ETFs, the main movement of funds during this period was associated with the first cryptocurrency. This asset accounts for an outflow of $479 million. At the same time, the inflow from short Bitcoin positions amounted to $10.6 million.
At the same time, Ethereum (ETH)-based exchange products saw an outflow of $39 million. Most crypto funds based on other altcoins also lost funds in varying amounts.
Last week, CoinShares analysts said that capital inflows into cryptoy investment products totaled $21 million, with issuers with higher fees suffering since the launch of spot Bitcoin ETFs in the United States on Jan. 10, 2024. Thus, the outflow of funds from such funds amounted to $2.9 billion. $4 billion were invested in the new instrument.
Google, a subsidiary of tech conglomerate Alphabet, is on the verge of a significant policy update set to take effect on Jan. 29, which could alter the landscape of cryptocurrency advertising.
Now that the U.S. Securities and Exchange Commission’s (SEC) approved 11 spot Bitcoin (BTC) ETFs on Jan. 10, Google is expected to amend its rules and enable asset managers to advertise these products to a broader U.S. audience.
This move follows Google’s recent decision to broaden its cryptocurrency and related products’ policy, now providing advertisers with specific guidelines for promoting what it calls “cryptocurrency coin trusts.”
Advertisers eager to capitalize on Google’s platform, renowned for its expansive reach and high search volume, will now require certification to ensure compliance with the tech giant’s stringent requirements.
The significance of this development is highlighted by the Grayscale Bitcoin Trust (GBTC) converting to a spot Bitcoin ETF, coupled with the sanctioning of 10 other institutions to include spot BTC ETFs in their investment portfolios.
Crypto analysts are optimistic about the ramifications of this policy change on the digital currency sphere, as Google processes around 8.55 billion searches daily, according to DemandSage.
Can Google Ads tip the scales for Bitcoin ETFs?
The crypto community speculates that the heightened visibility of Bitcoin ETFs through Google’s ad platform may drive substantial awareness and investment in the space.
Reports are circulating that Google will be changing their policy and allowing #Bitcoin ETF ads starting on Jan 29th.
Google processes 100K searches/sec 🤯
Bitcoin is going to have unprecedented levels of institutional and retail exposure.
As such, companies operating within the spot Bitcoin ETF market could potentially witness a significant influx of interest from new segments of the public — not just from seasoned day traders or investors.
The update could also signal a shift in how cryptocurrency products are advertised, ensuring that ads meet legal requirements and are responsibly presented to an engaged audience.
Google’s policy change arrives at an opportune moment. The crypto market has seen fluctuating investor sentiment toward spot Bitcoin ETFs over the past week.
On Jan. 24, Bitcoin ETFs saw an influx of approximately $270 million, counterbalanced by significant withdrawals — most notably from Grayscale Investment’s Bitcoin ETF—totaling a net outflow of around $153 million.
The trend did not improve, with Jan. 25 witnessing a continuation of the withdrawal streak, marking a fourth consecutive day of net outflows over the last week, totaling up to $80 million, specifically from the funds recognized by the SEC.
Despite these challenging dynamics, crypto commentators feel Google’s policy shift could potentially open doors to a flood of new investors. The increased visibility and imposed certification could counterbalance the recent outflows from the spot Bitcoin ETFs, signaling a possible rebound as we edge closer to the Jan. 29 policy implementation date.
Analysts at market intelligence platform CryptoQuant have revealed that BTC’s price bottoming signal can not be triggered until unrealized profit margins for short-term holders reach -10%.
According to the CryptoQuant Institutional Insights weekly crypto report, short-term holders’ profit margins have approached zero, and this has caused ease in selling pressure. However, the leading digital asset is yet to call a price bottom.
BTC Falls Below $40K
Earlier this week, BTC fell below $40,000 for the first time since December 3, 2023, triggering roughly $230 million in short and long liquidations. The asset recorded its lowest price since the United States Securities and Exchange Commission (SEC) approved numerous spot Bitcoin exchange-traded funds (ETFs) for listing on securities exchanges.
Before BTC dumped under $40,000, the cryptocurrency had lost a significant portion of its post-ETF approval gains, plunging from roughly $49,000 to the $43,000 level, leaving the crypto community in anticipation of a price bottom as there will not be any rally until one takes place. The decline has also taken a toll on miners suffering an 87% decrease in fees.
As of last week, short-term holders’ unrealized profit margins hovered around 16%, and two days ago, CryptoPotato reported that the figure may need to go below 0% before we can call a bottom and expect a rally. Although BTC had recovered a little by press time, CryptoQuant’s analysts have set the margin at -10% as price support based on short-term holders’ realized price, which is currently between $39,000 and $37,000.
New ETFs Amass Over 100K BTC
While BTC has been on a downward spiral, the holdings of spot Bitcoin ETFs in the U.S. have continued to rise. At the time of writing, the products held approximately 641,000 BTC, representing significant growth since they launched on January 11.
Grayscale’s GBTC holds the highest, 536,000 BTC; the other nine funds have collectively amassed around 104,000 BTC. BlackRock’s IBIT and Fidelity’s FBTC are leading the new ETFs, with holdings sitting at 44,000 and 34,000, respectively.
It is worth noting that GBTC held roughly 619,000 BTC before the product’s conversion into a spot ETF was approved; however, constant outflows have diminished the stash.
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According to data from BitMEX Research, BlackRock’s Bitcoin spot ETF – IBIT – has now set a new record, achieving a total net inflow of $2 billion. This feat allows IBIT to maintain its position as the best-performing fund of the bunch, following the approval of 11 Bitcoin spot ETFs by the US Securities and Exchange Commission on January 10.
BlackRock’s IBIT Maintains Dominance As Total Net Flows Reach $744.6 Million
On January 25, which marked the tenth trading day of the Bitcoin spot ETF market, BlackRock’s IBIT produced an unsurprising positive performance, notching $170.7 million in inflows. This gain allowed the investment fund to move into an exclusive list as the first Bitcoin spot ETF to amass $2 billion in market cap.
Commenting on this feat, Bloomberg analyst James Seyfarrt has credited the recent rise in BTC’s price as a major contributing factor. He said:
Yes, the #Bitcoin price has pushed $IBIT‘s assets beyond $2 billion. This plus likely new flows today should mean it will be above $2 billion at close.
Following the trading debut of BTC spot ETFs on January 11, IBIT quickly emerged as an investor’s favorite, recording the highest individual daily inflows of the market at $386 million on January 12. BlackRock’s BTC spot ETF has managed to retain this investors’ attention over the first two trading weeks, evidenced by its consistent positive performances, which has culminated in a total flow of $2.086 billion.
IBIT’s performance is closely followed by Fidelity’s FBTC, which recorded $101 million in inflows on January 25, moving its total flows to $1.825 billion. Meanwhile, other Bitcoin spot ETFs with notable performances include Bitwise’s BITB and Ark Invest’s ARKB, both of which boast individual cumulative AUMs of over half a billion dollars.
In other news, the outflows in Grayscale’s GBTC remain a constant trend; however, there has been a notable decline in selling volume over the last few days. At the time of writing, GBTC’s total outflow is valued at $4.786 billion. In comparison with a cumulative inflow of $5.53 billion, total flows in the Bitcoin spot ETF market stand at $744.6 million.
Source: BitMEX
Bitcoin Price Overview
At press time, Bitcoin is currently trading at $41,725.19 following a 4.52% price gain in the past day, according to data from CoinMarketCap. This recent uptick is quite significant, considering the asset’s previous bearish form, marked by a 20% decline over the last two weeks which resulted in BTC’s dipping below $39,000.
Bitcoin’s price has been negatively affected by GBTC’s massive outflows; however, as the selling pressure appears to be decreasing, coupled with consistent positive performances of other ETFs, notably BlackRock’s IBIT, that crypto market leader could soon pull off a market recovery.
Featured image from Reuters, chart from Tradingview
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
