After consistently denying approval for a spot Bitcoin ETF for American investors over the years, there are indications that SEC chair Gary Gensler might be reconsidering his position in light of Grayscale’s legal triumph.
While he has not explicitly acknowledged any change in stance, he admitted taking a new look at the approval process of a spot Bitcoin ETF following the recent court rulings.
Softening Stance?
In an interview with CNBC’s “Money Movers,” Gensler said,
“I think it’s between eight and a dozen filings. I’m chair of a commission. I’m not to prejudge anything. So, that’s going through the process right now. And as you might know, we had in the past denied a number of these applications, but the courts here in the District of Columbia weighed in on that. And so we’re taking a new look at this based upon those court rulings.”
The District of Columbia Court of Appeals in Washington in August ruled that the SEC made an incorrect decision in denying approval for Grayscale’s proposed Bitcoin ETF. This ruling held significant importance for the industry, which has been seeking for a decade to progress and establish such crypto investment products.
Despite the hostility towards the sector, the SEC opted against appealing the court decision. This decision subsequently led to speculation that it may open the door for the regulatory agency to reconsider and assess Grayscale’s application.
In the latest interview, Gensler refrained from mentioning Grayscale but emphasized the SEC’s role in operating within the framework of laws established by Congress and interpreted by the courts. He also cautioned investors about prevalent noncompliance with securities laws designed to provide disclosure for informed investment decisions and protect against fraud and manipulation.
Besides Grayscale, several major asset management firms, including BlackRock, Fidelity, Invesco, VanEck, and Valkyrie, are currently competing to introduce a spot Bitcoin ETF. Although the approval process for all these applications has experienced delays, experts are confident approval is likely to take place in early January 2024.
Grayscale Optimistic Following Conversations With SEC
Grayscale has been eagerly eyeing a spot Bitcoin ETF after securing a court win against the SEC.
While specific timelines have not been disclosed, Michael Sonnenshein, the CEO of Grayscale Investments, expressed positivity regarding discussions with the SEC regarding the possibility of a spot Bitcoin ETF. The exec shared his optimism, stating that his firm has been actively involved in conversations with the regulatory watchdog.
He noted that the questions posed by the SEC suggest a willingness to engage on the matter and a desire to make advancements in this area.
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Google has updated its advertising policy regarding cryptocurrencies and related products.
According to the company statement, as of Jan. 29, 2024, Google will allow advertising of digital asset-related investment products, including exchange-traded funds (ETFs).
“In January 2024, Google will update the Cryptocurrencies and related products policy to clarify the scope and requirements for the advertisement of Cryptocurrency Coin Trusts.”
Google update
In September, Google also allowed advertising for blockchain-based games using non-fungible tokens (NFTs). The company classified as permitted games that allow players to purchase in-game items, particularly virtual clothing for characters or weapons. At the same time, advertising of games in which players place bets, including NFTs, in exchange for the opportunity to win something that has real value, such as other tokens, remains prohibited.
At the end of October, the Google Trends analytics service recorded peak values in the number of queries for the keyword “spot bitcoin ETF” in Google’s international search, indicating maximum interest in this topic from ordinary users.
Several large institutional players have already submitted applications for Bitcoin (BTC) ETFs. The launch of these investment products is considered in the crypto community to be the catalyst for a new bull cycle in the market. Bloomberg Intelligence analysts previously estimated the likelihood that the SEC will approve the ETF in early January 2024 at 90%.
Binance founder CZ must stay in US until sentencing, judge orders
Binance founder Changpeng “CZ” Zhao has been ordered to stay in the United States until his sentencing in February, with a federal judge determining there’s too much of a flight risk if the former crypto exchange CEO is allowed to return to the United Arab Emirates. On Dec. 7, Seattle District Court Judge Richard Jones ordered Zhao to stay in the U.S. until his Feb. 23, 2024 sentencing date. He faces up to 18 months in prison after pleading guilty to money laundering on Nov. 21 and has agreed not to appeal any potential sentence up to that length.
House committee passes bill to ‘preserve US leadership’ in blockchain
A United States Congress committee has unanimously passed a pro-blockchain bill, which would task the U.S. commerce secretary with promoting blockchain deployment and thus potentially increase the country’s use of blockchain technology. The act covers an array of actions the commerce secretary must take if passed, including making best practices, policies and recommendations for the public and private sector when using blockchain tech. The bill will now go to the House for a vote. If passed, it must also pass in the Senate before returning for final congressional and presidential approval.
SEC pushes deadline to decide on Grayscale spot Ether ETF
The United States Securities and Exchange Commission has delayed its decision on whether to approve or reject a spot Ether exchange-traded fund (ETF) offering from asset manager Grayscale. In a notice, the SEC said it would designate a longer period for considering a proposed rule change that would allow NYSE Arca to list and trade shares of the Grayscale Ethereum Trust. Grayscale first filed with the SEC to convert shares of its Grayscale Ethereum Trust into a spot Ether ETF in October, adding its name to the list of companies awaiting a decision from the regulator.
Elon Musk’s xAI files with SEC for private sale of $1B in unregistered securities
Elon Musk’s X-linked artificial intelligence modeler, xAI, has an agreement for the private sale of $865.3 million in unregistered equity securities, according to a filing with the United States Securities and Exchange Commission made on Dec. 5. The company is seeking to raise $1 billion. XAI’s product, a chatbot called Grok, has recently rolled out to X’s Premium+ subscribers. Musk announced the launch of xAI in July and claimed its goal was to “understand the universe.”
Bitcoin new high set for late 2024, Binance to lose top spot — VanEck
Bitcoin will hit a new all-time high in late 2024 because of a long-feared United States recession and regulatory shifts after the next U.S. presidential election, asset manager VanEck predicts. The firm is confident that the first spot Bitcoin ETFs will be approved in the first quarter of 2024. However, it also made a gloomy prediction for the general U.S. economy. VanEck is among several firms, including BlackRock and Fidelity, that are vying for an approved spot Bitcoin ETF. VanEck also believes that the BTC halving, due in April or May, “will see minimal market disruption,” but there will be a post-halving price rise.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $44,402, Ether (ETH) at $2,364 and XRP at $0.66. The total market cap is at $1.65 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Bonk (BONK) at 203.10%, ORDI (ORDI) at 134.34% and BitTorrent (BTT) at 114.32%.
The top three altcoin losers of the week are Maker (MKR) at -6.48%, UNUS SED LEO (LEO) at -6.22% and Kaspa (KAS) at 4.98%.
“It takes a community and the whole industry to figure out how to better educate people. That’s the hard part. It’s not a technology issue; it’s an operational problem.”
In a post on X (formerly Twitter) on Dec. 7, entrepreneur Alistair Milne noted that should current performance continue, Bitcoin will witness a crossover of two weekly moving averages (MAs), which have never delivered such a bull signal before.
The 50-week and 200-week MAs are key trendlines for Bitcoin traders and analysts alike. The latter is the ultimate bear market support level, and it has so far never decreased in value.
BTC price strength is on the way to taking the 50-week MA trendline above the 200-week counterpart. Known as a “golden cross,” on lower timeframes, this is considered a classic bullish signal, and for Milne, the impetus is that considerable upside could be in store should the phenomenon play out.
“The 50-week moving average will now soon cross back above the 200-week MA making a ‘golden cross’ for the 1st time. QED: Early bull market,” he wrote.
FUD of the Week
Crypto is for criminals? JPMorgan has been fined $39B and has its own token
JPMorgan Chase CEO Jamie Dimon is being criticized by the crypto community after claiming Bitcoin and cryptocurrency’s “only true use case” is to facilitate crime. However, according to Good Jobs First’s violation tracker, JPMorgan is the second-largest penalized bank, having paid $39.3 billion in fines across 272 violations since 2000. About $38 billion of these fines came under Dimon’s watch, who has been CEO since 2005.
British regulator adds Justin Sun-linked Poloniex to warning list after $100M hack
The United Kingdom’s Financial Conduct Authority (FCA) has added crypto exchange Poloniex to its warning list of non-authorized companies. The Seychelles-based exchange is one of the three companies owned by or affiliated with entrepreneur Justin Sun that have suffered four hacks in the last two months. The warning to Poloniex was published on the FCA’s website on Dec. 6. It doesn’t offer a reason but says that “firms and individuals cannot promote financial services in the UK without the necessary authorization or approval.”
US senators target crypto in bill enforcing sanctions on terrorist groups
A bipartisan group of lawmakers in the United States Senate introduced legislation aimed at countering cryptocurrency’s role in financing terrorism, explicitly citing the Oct. 7 attack by Hamas on Israel. The bill would expand U.S. sanctions to include parties funding terrorist organizations with cryptocurrency or fiat. According to Senator Mitt Romney, the legislation would allow the U.S. Treasury Department to go after “emerging threats involving digital assets.”
Lawmakers’ fear and doubt drives proposed crypto regulations in US
If the Digital Asset Anti-Money Laundering Act were to become law, many cryptocurrency providers would have to learn how to comply with the same regulations as traditional financial institutions.
Expect ‘records broken’ by Bitcoin ETF: Brett Harrison (ex-FTX US), X Hall of Flame
Investment management firm VanEck has unveiled its 2024 predictions, forecasting not only record-breaking highs for Bitcoin but also an anticipated peak in the NFT market, signaling a significant transformation in the industry.
The introduction of spot Bitcoin ETFs is expected to align with the prolonged anticipation of a U.S. recession, while the forthcoming halving event may not generate as much impact as previously anticipated.
New Peak for Bitcoin But No Flippening for Ethereum in 2024
Bitcoin may hit an all-time high in Q4 of 2024, according to VanEck’s prediction. With increased optimism for the dismantling of the SEC’s adversarial regulatory stance, Bitcoin could reach a new high on November 9th, exactly three years from its last peak in November 2021.
Ether is not expected to surpass Bitcoin in performance until post-halving and may outperform for the year, a complete, however, “flippening” is not anticipated. Despite posting a strong performance in 2024, Ether is projected to experience a decrease in market share as other smart contract platforms, like Solana, gain traction due to a clearer and less uncertain scalability roadmap.
Meanwhile, the introduction of the first-ever spot Bitcoin exchange-traded funds (ETFs) could potentially coincide with the US recession.
VanEck also said the 4th Bitcoin halving slated for April 2024 will occur with minimal drama. As the issuance of new coins is halved, unprofitable miners are likely to disengage, allowing those with cost-efficient power sources to gain a larger market share.
Despite this, the public markets are expected to experience minimal distress owing to the improved financial positions of listed miners, currently controlling approximately 25% of the global hash rate. Post-halving, it is expected that at least one publicly traded miner will experience a tenfold increase by the end of the year.
Turning Points for Binance and DEXes
Following Binance’s $4 billion settlement with US regulators, it is anticipated to relinquish its position as the top centralized exchange by volumes. Competitors such as OKX, Bybit, Coinbase, and Bitget, backed by substantial funding, are poised to contend for the leading spot.
As Binance undergoes a rigorous three-year DOJ examination, VanEck predicted that Coinbase’s international futures market would thrive, surpassing a daily volume of $1 billion, a significant increase from approximately $200 million per day in November 2023.
The market share of spot cryptocurrency trading on Decentralized Exchanges (DEX) is expected to reach unprecedented levels, driven by the enhanced on-chain trading experience facilitated by high-throughput chains like Solana.
Simultaneously, the adoption of significantly improved wallets, which integrate “account abstraction” as a crucial feature enabling automated payments, will contribute to more users engaging in on-chain transactions and embracing self-custody solutions.
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On-chain data has revealed an increasing sentiment of holding Bitcoin among investors. Bitcoin has been on a roll since the start of the month, pushing its price to new yearly highs. At the same time, exchange data from CryptoQuant reveals that the crypto might be gearing up for a sustained bull run. According to the on-chain analytics platform, Bitcoin’s exchange supply, the amount available for purchase on exchanges, has dropped to its lowest levels since 2017
Exchange Supply Drops To Lowest Level In Six Years
The Bitcoin market is flashing a bull signal that correlates with anticipation of spot Bitcoin ETF applications. CryptoQuant’s exchange reserve chart demonstrates that the supply of Bitcoin has been steadily decreasing from centralized exchanges since 2020 when it reached a high of over 3.2 million BTC. The outflow was particularly aggravated in the last quarter of 2022, when the collapse of crypto exchange FTX led to panic and investors started to opt for self-custody in cold wallets. During this period, exchange reserves dropped from 2.512 million BTC to 2.158 million BTC in a month.
Reserve on exchanges started to increase slowly in the early months of 2023, climbing back up to 2.240 million in May. However, things started to change in June, as filings by BlackRock and other investment companies for spot Bitcoin ETF trading in the US led to the start of a bullish sentiment.
Bitcoin slightly below the $44K level today. Chart: TradingView.com
The reserve on centralized exchanges has been on a steady drop since then. At the time of writing, the exchange reserve has now crossed below 2 million BTC, a level it has yet to reach since December 2017. This metric’s six-year low is particularly interesting, considering Bitcoin’s total circulating supply has increased since 2017. Bitcoin’s total supply now stands at 19,564,812 BTC, a 16% increase from December 2017’s supply of 16.78 million BTC.
Outlook For Bitcoin Price: Bull Signal?
Although there are technically more bitcoins now available to go around, the increase in adoption is making it increasingly harder for traders to get a hold of the asset. Dropping exchange supply is a bullish signal for crypto assets and periods of low exchange supply have historically been associated with the beginning of significant Bitcoin bull runs. The last time Bitcoin had a drastic drop in exchange reserve was in 2020, and the crypto would later go on to reach its all-time high the year after.
In the countdown to the deadline for the long-awaited Bitcoin ETF applications by major asset managers worldwide, predictions regarding the rate of approval have significantly improved.
Inside sources from the US Securities and Exchange Commission (SEC) indicate that Bloomberg’s initial 90% chance prediction of approval has now surged beyond 99%.
This development has heightened the excitement surrounding this investment vehicle, which has the potential to bring substantial inflows of capital into the Bitcoin market and further amplify its year-to-date gains of over 153%.
Market Sentiment Soars As Bitcoin ETF Approval Probability Surpasses 99%
Andrew, an SEC insider, shared an update on X (formerly Twitter), stating that the 99% probability of a Spot Bitcoin ETF being approved is no longer deemed high enough.
While acknowledging that nothing is ever certain, the source emphasized that the current likelihood of approval surpasses the 99% estimate from the previous week.
The sentiment in the market is clearly reflected in the price movement of Bitcoin, as it continues to establish new yearly highs and display unwavering bullish momentum.
Currently trading at $42,900, Bitcoin recently reached a fresh annual peak of $43,400 on Tuesday. Over the past 24 hours, the largest cryptocurrency has surged by 4%, and it has witnessed a remarkable increase of over 14% in the past seven days.
It is worth noting that the prospect of a Bitcoin ETF being approved has captured the attention of investors and industry participants alike. If approved, the ETF would provide a regulated and accessible investment vehicle for institutional and retail investors, potentially bringing significant liquidity to the cryptocurrency market.
The spike in approval forecasts to over 99% has further fueled optimism that this milestone decision is imminent. While nothing can be guaranteed, the growing confidence in Bitcoin ETF approval and the cryptocurrency’s impressive price performance underscores the potential for a significant positive impact on the market.
As the final deadline approaches, market participants eagerly await the SEC’s decision, anticipating a potential game-changer for the Bitcoin ecosystem and its ongoing growth.
BTC Faces Crucial Range High Resistance
Renowned crypto analyst Rekt Capital has shed light on Bitcoin’s recent price action, emphasizing the significance of key support and resistance levels within a specific price range.
In late November, Rekt Capital identified a range between $36,120 and $43,200, highlighting the importance of the lower boundary for a potential upward move.
Bitcoin successfully tested and held the range’s lower boundary as support, resulting in a substantial rally in recent days. The primary objective now, according to Rekt, is to revisit the upper boundary, known as the black $43,900 range high resistance, as seen in the chart below.
Rekt Capital underscores the importance of the black Range High resistance as a crucial reference point for Bitcoin’s price. During the parabolic phase of the 2021 Bull Market, Bitcoin managed to break above this level relatively easily.
On two occasions, the cryptocurrency surged beyond the black level, with the first instance followed by a retest of the level as a new support, leading to further upward momentum.
The second instance occurred later in the year when Bitcoin successfully retested the black level as short-term support before continuing its ascent.
However, late in 2021, Bitcoin lost the black level as support (first red circle from the left) and experienced a fake breakout above it, subsequently entering a multi-week downtrend.
Rekt Capital highlights that Bitcoin’s historical performance suggests the cryptocurrency needs to successfully retest the black $43,900 level as support to pave the way for further upward movement.
Featured image from Shutterstock, chart from TradingView.com
Crypto derivatives trading activity on the Chicago Mercantile Exchange (CME) has been surging in recent days as the Bitcoin ETF hype increases.
There has been growing optimism that the SEC will approve a spot Bitcoin ETF in January. This has led to increased trading of Bitcoin futures on platforms like CME Group. However, some traders are also using futures to bet against ETF approval, according to a Dec. 1 Bloomberg report.
Bitcoin Futures Trading Surges
The report noted that open interest on the CME hit an all-time high last week. OI is a measure of the total number of contracts that have yet to be settled.
According to Deribit, BTC futures OI is $481 million as of Nov. 29 but it spiked to $616 million on Nov. 24.
According to Giovanni Vicioso, global head of cryptocurrency products at CME, many traders are buying futures shorting BTC due to the uncertainty over approvals.
“I think it’s uncertain what’s going to happen, market participants need proper tools to hedge against that risk.”
Futures contracts such as the ProShares BITO fund allow speculators to bet on the future price of the asset, be it higher or lower than current prices. They do not involve buying or selling the asset directly.
Bitcoin futures trading volume on the CME jumped around 13% in November from October, when it was 35% higher than in September.
Vicioso added that the uptick in volume and OI is a “clear indication that institutions are moving into this space,”
However, the SEC has so far rejected every single application for a spot Bitcoin ETF. A spot product would require the issuers to physically buy and hold the asset, whereas futures ETFs, which have been approved, are traded on contracts on the CME.
Moreover, traders prefer the CME’s offerings specifically because its Bitcoin contracts expire on a particular date. They can use them to hedge for or against approval deadlines or other price-driving factors such as the Bitcoin halving.
Early Jan Approval Predicted
Nevertheless, ETF analysts and experts are growing in confidence over approval odds.
On Dec. 1, Bloomberg EFT analyst James Seyffart predicted that the window for potential spot Bitcoin ETF approval would be between Jan 5 and 10, 2024.
The Bitcoin price rose to $38.475 yesterday, marking a marginally higher high for the year. Nevertheless, the price did not manage to close the day above the important $38,000 mark. Shortly before the end of the day, the bears managed to push the price down again.
As crypto analyst Daan Crypto Trades remarked, “Market does its best to shake out everyone trying to pre-position for a possible Bitcoin ETF approval. It’s just free liquidity for the MMs/Whales. Sweep highs, trap longs, squeeze out longs, bait shorts, front run lows and repeat the whole process.”
Bitcoin price | Source: X @DaanCrypto
BlackRock Argues With SEC Over Details Of Spot Bitcoin ETF
In a notable development, BlackRock, the world’s largest asset manager, has been again actively engaged in discussions with the US Securities and Exchange Commission (SEC) concerning the structure of its spot ETF yesterday.
Eric Balchunas, senior ETF analyst at Bloomberg, revealed, “BlackRock met with the SEC’s Trading & Markets division again yesterday and presented them with a ‘revised’ in-kind model design based on Staff’s comments at their 11/20 meeting.” This revised model includes a notable change in the process, specifically at ‘Step 4’, which is the offshore entity market maker acquiring Bitcoin from Coinbase and then pre-paying in cash to the US registered broker dealer who is not allowed to touch BTC.
James Seyffart, another Bloomberg analyst, highlighted the ongoing negotiations, adding, “More confirmation that Issuers are still meeting with the SEC. BlackRock/Nasdaq still pushing for In-Kind creation & redemption. Seems like SEC hasn’t budged on cash creates demands if this was the primary focus of the meeting. At least not before yesterday, Interesting days ahead!”
The original “In-Kind Redemption” flow had Market Maker’s Broker/Dealer entity (MM-BD) placing an order for redemption through the Authorized Participant (AP), who approves the order, allowing MM-crypto to borrow Bitcoin (or cash) to sell short. This redemption flow had potential balance sheet impacts and risks that the SEC was concerned about.
BlackRock has now proposed a “Revised In-Kind (‘Prepay Model’)” Redemption flow. This new model involves MM-crypto delivering cash to MM-BD instead of Bitcoin, and MM-BD then delivers ETF shares to the Transfer Agent via API. The Bitcoin custodian is instructed by the issuer to transfer Bitcoin to MM-crypto, who then closes the short position in BTC.
The benefits of this revised model are manifold. It aims to lower transaction costs and shifts the execution risks from investors to crypto market makers. It also claims to provide superior resistance to market manipulation and remove the need for issuers to finance or pre-fund sell trades. The reduction in risks of operating events and the simplification across the ecosystem could mean lower variance on how In-kind models can be executed versus cash models.
BlackRock’s Bitcoin ETF structure “in-kind” | Source: X @EricBalchunas
90% Odds Of Approval Remain
Should the SEC approve this revised model, it could herald the introduction of the first US-based spot Bitcoin ETF, a significant milestone that would allow investors to gain direct exposure to Bitcoin rather than through derivative instruments like futures. Despite these developments, there remains a level of uncertainty surrounding the SEC’s stance on the matter, particularly regarding the implications of spot Bitcoin exposure for retail investors through an ETF.
Recent leaks suggested the SEC might prefer cash creation processes over in-kind Bitcoin transfers, a move that could significantly alter the landscape for ETF issuers and broker-dealers dealing with Bitcoin. Nonetheless, Bloomberg’s ETF analysts have reiterated their 90% odds for a spot ETF approval by January 10 yesterday.
US officials announce $4.3B settlement with Binance, plea deal with CZ
Binance and its co-founder, Changpeng “CZ” Zhao, have reached a settlement over criminal and civil cases with the United States Department of Justice. CZ will plead guilty to one felony charge as part of the negotiated agreement. Attorney General Merrick Garland announced the settlement, claiming Binance’s policies allowed criminals involved in illicit activities to move “stolen funds” through the exchange. As part of the settlement, CZ announced on X (formerly Twitter) that he had stepped down as CEO and that Binance’s global head of regional markets, Richard Teng, will assume the position. He added he was “proud to point out” that U.S. officials didn’t allege that Binance misappropriated funds or manipulated markets. CZ was released on bail and is battling government efforts to bar his return to the United Arab Emirates to be with his family. His sentencing is scheduled for February.
BlackRock met with SEC officials to discuss spot Bitcoin ETF
Representatives from BlackRock and Nasdaq met with the U.S. Securities and Exchange Commission (SEC) to discuss the proposed rule allowing the listing of a spot Bitcoin exchange-traded fund (ETF). BlackRock provided a presentation detailing how the firm could use an in-kind or in-cash redemption model for its iShares Bitcoin Trust. Many reports have suggested the SEC could be nearing a decision on a spot BTC ETF for listing on U.S. markets. SEC officials also met with Grayscale representatives this week to discuss the listing of a Bitcoin ETF. BlackRock is one of many firms with spot crypto ETF applications in the SEC pipeline awaiting a response, including Fidelity, WisdomTree, Invesco Galaxy, Valkyrie, VanEck and Bitwise.
Bitcoin user pays $3.1M transaction fee for 139 BTC transfer
A Bitcoin user paid $3.1 million in fees for transferring 139.42 BTC. The transaction fee is the eighth-highest in Bitcoin’s 14-year history. A wallet address tried transferring 139.42 BTC only to pay more than half the actual value of the transaction fee. The destination address received only 55.77 BTC. The mining pool Antpool captured the absurdly high mining fee on block 818087. This is the largest Bitcoin transaction fee ever paid in dollar terms, knocking off Paxos’s September transfer of $500,000.
SEC sues Kraken alleging it’s an unregistered exchange, mixes user funds
The U.S. Securities and Exchange Commission has sued Kraken, alleging it commingled customer funds and failed to register with the regulator as a securities exchange, broker, dealer and clearing agency. Additionally, the SEC alleged Kraken’s business practices and “deficient” internal controls saw the exchange commingle up to $33 billion worth of customer assets with its own. The SEC said this resulted in a “significant risk of loss” for its clients. In a follow-up blog post, Kraken said the SEC’s commingling accusations were “no more than Kraken spending fees it has already earned,” and the regulator doesn’t allege any user funds are missing.
Appeals court rejects Sam Bankman-Fried’s bid for release
Sam Bankman-Fried will stay jailed after failing to convince a United States appellate court that he should be freed while his legal team appeals his conviction. Government prosecutors accused Bankman-Fried of leaking Caroline Ellison’s journals to The New York Times in July, which caused his bail to be revoked by a New York District Court. Bankman-Fried was found guilty of seven fraud and money laundering-related charges on Nov. 2. The former FTX CEO will remain behind bars while he awaits his sentencing on March 28 next year.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $37,710, Ether (ETH) is at $2,079, and XRP is at $0.62. The total market cap is at $1.43 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Blur (BLUR) at 99.25%, FTX Token (FTT) at 39.05% and KuCoin Token (KCS) at 24.82%.
The top three altcoin losers of the week are Celestia (TIA) at -19.89%, ORDI (ORDI) at -17.63% and THORChain (RUNE) at -15.53%.
“We, the employees of OpenAI, have developed the best models and pushed the field to new frontiers, [but] the process through which you terminated Sam Altman […] has jeopardized all of this work and undermined our mission and company.”
‘Enjoy sub-$40K Bitcoin’ — PlanB stresses $100K average BTC price from 2024
Bitcoin buyers should enjoy the chance to add to their stack below $40,000, according to PlanB, pseudonymous creator of the stock-to-flow family of BTC price models. He believes Bitcoin will rise much higher than its recent 18-month highs.
Bitcoin bear market bottoms are characterized by the spot price dipping below the realized price, while bull markets begin once the spot crosses the two-year and five-month realized price levels. BTC/USD is now once again above all three realized price iterations.
“Enjoy sub-$40k bitcoin … while it lasts,” PlanB commented on an accompanying chart.
Asked whether the market should expect lower levels from here, PlanB would not be drawn, saying that he simply expected an average BTC price of at least $100,000 between 2024 and 2028 — Bitcoin’s next halving cycle.
FUD of the Week
HTX to restore services ‘within 24 hours’ after $30M hack
Crypto exchange HTX, formerly known as Huobi Global, resumed deposits and withdrawals within 24 hours after suffering a $30 million exploit on Nov. 22. The exploit was reported to be $13.6 million around the time of the incident, but has since increased in value. HTX’s hot wallets were compromised alongside a coordinated $86.6 million attack against the HTX Eco (HECO) Chain bridge, consisting of HTX, Tron and BitTorrent. The company has promised to fully compensate users for any losses incurred as a consequence of the hack.
CZ an ‘unacceptable risk of flight,’ should stay in US: DOJ
United States prosecutors are trying to stop former Binance boss Changpeng “CZ” Zhao from leaving the country, expressing concern about his potential flight risk. The government requested a review and overturn of a judge’s decision that would allow Zhao to return to his home in the United Arab Emirates (UAE) on a $175 million bond under the condition that he returns to the U.S. two weeks before his February 2024 sentencing. In a proposed order, prosecutors wrote that Zhao “presents an unacceptable risk of flight,” arguing that his ties and favored status in the UAE, along with the country’s lack of an extradition treaty with the U.S., are reasons to block him from leaving the country.
KyberSwap hacker offers $4.6M bounty for return of $46M loot
The decentralized exchange KyberSwap has offered a 10% bounty reward to the hacker who stole $46 million on Nov. 22 and left a note of negotiation. The exchange wants 90% of the loot returned. The hacker made away with roughly $20 million in Wrapped Ether, $7 million in wrapped Lido-staked Ether and $4 million in Arbitrum tokens. The hacker then siphoned the loot across multiple chains, including Arbitrum, Optimism, Ethereum, Polygon and Base.
This is your brain on crypto: Substance abuse grows among crypto traders
According to some addiction experts, the high-stress atmosphere of cryptocurrency trading can provide a perfect environment for substance abuse.
Michael Saylor’s a fan, but Frisby says bull run needs a new guru: X Hall of Flame
Bitcoin enthusiast Dominic Frisby has a wild journey, from penning one of the first-ever Bitcoin books to plastering “Bitcoin fixes this” on the Bank of England.
6 Questions for Alex O’Donnell about financial journalism and the future of DeFi
Binance’s founder and former CEO, Changpeng “CZ” Zhao, pleaded guilty to violating the Bank Secrecy Act. The charges against Binance include money laundering violations, conspiracy to engage in an unlicensed money-transmitting business, and violations of US sanctions. It’s worth noting that US authorities haven’t accused Binance of misusing user funds or engaging in market manipulation.
The latest turn of events is expected to catalyze the anticipated approval of a spot-based bitcoin exchange-traded fund (ETF) in the US.
A Catalyst for Spot Bitcoin ETF Expectations?
The crypto market faced unexpected turbulence on November 21 following the announcement of a $4.3-billion settlement between Binance and US authorities, including the Department of Justice, Commodity Futures Trading Commission, and US Treasury.
Additionally, the former CEO of Binance, Changpeng Zhao, revealed plans to plead guilty to a felony charge as part of the settlement, addressing criminal and civil cases involving the exchange. This development might serve as a catalyst for heightened expectations of a spot Bitcoin ETF, Matrixport analyst Markus Thielen said in a new report.
Thielen believes the likelihood of a spot Bitcoin ETF has possibly increased to 100%, as the cryptocurrency industry will now be compelled to adhere to the regulations followed by traditional financial firms (TradFi). This increased regulatory compliance could strengthen the case for institutional players to adopt Bitcoin, positioning it as a safe-haven asset in investors’ portfolios.
Moreover, the FTX exchange is expected to undergo a sale and transition to a management team compliant with US securities laws starting next month, potentially relaunching the exchange by Q3 2024. Anticipated inflows of $24-50 billion into any US-listed Bitcoin ETF and the increasing presence of crypto firms engaging in CME-listed crypto derivatives suggest a trend toward regulated and compliant platforms catering to institutional investors, the report said.
Additionally, the enforcement actions by US agencies throughout the year signal a shift from unregulated retail-focused exchanges to fully regulated venues for institutions.
“As the macro-environment continues to be a tailwind with the demand from institutions, 2024 will likely be another rocking year for Bitcoin – CZ might come back during the next bear market in 2026.”
Favorable Outcome for Binance
With CZ stepping down and the imposed fine being less than the feared $10 billion, Binance is expected to maintain its position as one of the top three cryptocurrency exchanges for the next 2-3 years, according to the Matrixport analyst.
However, the company, which currently employs 6,000 people, may face pressure to streamline its operations. Despite the plea deal not involving the SEC, it represents a favorable outcome for CZ and Binance.
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Matrixport, a leading digital finance platform, today, November 22, released a comprehensive research note focusing on the significant implications of yesterday’s developments in the crypto industry, particularly regarding the prospects of a spot Bitcoin Exchange-Traded Fund (ETF) in the United States.
Following the guilty plea of Binance CEO Changpeng Zhao (CZ) and the substantial financial settlements involved, Matrixport suggests that the path for approving a spot Bitcoin ETF might have become significantly clearer. The note highlights the regulatory crackdowns and compliance upgrades in the crypto sector, indicating a shift towards greater regulatory alignment with traditional financial (TradFi) systems.
“Some would argue that the US agencies have cleaned up the industry this year by dismantling the US crypto-related banks, as two of them were running an internal ledger that crypto companies could use 24/7 to transfer fiat. Arguably, few (perceived) major actors are left, and with Bitcoin only declining -3.4% during the last 24 hours, the market is stomaching a major risk-off event,” Matrixport remarks.
Spot Bitcoin ETF Approval Odds At 100% Now?
The company points out that with stringent enforcement actions and enhanced compliance programs becoming the norm among crypto exchanges, the differentiation between regulated and non-regulated cryptocurrency exchanges may become a key metric in 2024. This shift is seen as instrumental in the potential approval of a spot Bitcoin ETF in the US, a development long anticipated by the industry.
“The result will likely be that more exchanges will enhance their compliance programs and become part of a surveillance-sharing agreement, which will be instrumental in approving a spot Bitcoin ETF in the US,” the firm stated, adding, “With this plea deal, the expectations for a spot Bitcoin ETF might have increased to 100% as the industry will be forced to follow the rules that TradFi firms must follow.”
The firm believes that this “whitewashing” of the industry will not only enhance Bitcoin’s adoption by institutional players but also position it as a safe-haven asset in investment portfolios. “More importantly, this industry’s whitewashing will strengthen the Bitcoin adoption case for institutional players and will likely become a safe-haven asset in investors’ portfolios,” Matrixport predicts.
The note also touches on the anticipated sale of the FTX exchange and its potential relaunch under a US securities law-compliant management team by Q3 2024. Matrixport speculates that this could lead to significant inflows, estimated between $24-50 billion, into any US-listed Bitcoin ETF. They also note the increasing trend of crypto firms making markets on CME-listed crypto derivatives, indicating a shift from retail-focused, unregulated exchanges to those that are fully regulated and cater to institutional clients.
‘Dark Cloud Has Been Removed’ As ETF Makes Progress
Analysts and industry experts have echoed Matrixport’s sentiments. Will Clemente, a noted analyst, stated, “With resolution on Binance, just a matter of weeks until Bitcoin ETF approval now.” Tony “The Bull” Severino, head of research at NewsBTC, commented, “A dark cloud has just been removed from the crypto market.” Conversely, Scott Johnsson, a finance lawyer at Davis Polk, offered a more cautious view, suggesting that “It’s far more likely an ETF decision led the Binance resolution than the other way around imo. And I’m not convinced either is that likely.”
Remarkably, there has been some movement in the spot ETF approval process in the last few days. Ark Invest has kicked off the third round of amendments to the S-1 filings, Grayscale had a meeting with the US Securities and Exchange Commission yesterday regarding its “uplisting.”
The U.S. Securities and Exchange Commission (SEC) has once again postponed its decision on whether to approve the country’s first spot Bitcoin exchange-traded fund. Documents released on Nov. 17, reveal that the regulator has deferred decisions on filings from Franklin and Globe X.
This deferral follows delays for other applicants, as both companies submitted their initial applications later than some of their competitors.
The postponement of decisions on these two spot Bitcoin ETF applications, Franklin and Globe X Bitcoin Trust, contributes to the prevailing uncertainty regarding the approval of such crypto-based investment products.
This development comes amid increased interest in cryptocurrency-based ETFs, exemplified by Fidelity Investments’ recent filing to list its Ethereum spot Exchange Traded Fund (ETF) product with the SEC.
Meanwhile, BitGo CEO Mike Belshe anticipates more challenges for the approval of spot Bitcoin ETFs in the United States, pointing to unresolved market structure issues as a significant hurdle.
Crypto bulls regaining momentum
Grayscale’s recent legal victory against the SEC in its quest for spot BTC ETF glory, has caused notable market shifts, fostering optimism for Bitcoin and altcoins.
The court’s decision has particularly boosted Ripple‘s XRP, triggering a significant 6% surge post-ruling. Observers have argued that Grayscale’s triumph sets the stage for a potential breakthrough in the creation of the first spot Bitcoin ETF in the U.S.
The court ruling emphasized the SEC’s inability to justify its disparate treatment of Bitcoin futures ETFs and spot Bitcoin ETFs, hinting at a potential shift in the regulatory landscape for cryptocurrency investment products.
Grayscale’s legal success has ignited discussions on the prospect of increased institutional participation in the crypto sector. While the immediate impact is positive, ongoing developments in the SEC v. Ripple lawsuit and the broader regulatory framework will continue to shape the course of XRP and the overall cryptocurrency market.
Following these positive developments, Bitcoin (BTC) has experienced an almost 30% rally over the past month. At the time of filing this report, the world’s largest digital currency is up by approximately 1%, in the last 24 hours, exchanging hands for $36,662. In the same vein, the global crypto market cap stands at $1.44 trillion, representing a 0.7% increase in the daily timeframe, according to CoinGecko.
In 2023 alone, over a dozen companies have sought approval for spot Bitcoin ETFs, and now, several others are applying for similar products tied to ether, the second-largest cryptocurrency.
The regulator has not revealed its stance on these recent applications. Earlier rejections raised concerns about market manipulation and a lack of surveillance-sharing agreements for Bitcoin.
Applicants argue that these concerns have been addressed or are no longer relevant, especially after the approval of Bitcoin futures ETFs, a viewpoint supported by an appeals court earlier this year. The SEC has yet to make final decisions on these applications, causing delays.
No ETF hope in sight
The U.S. Securities and Exchange Commission (SEC) has also postponed its decision on Hashdex’s application to transform its current Bitcoin futures exchange-traded fund (ETF) into a spot vehicle. Additionally, the agency has also deferred its decision on Grayscale’s proposal to introduce a new Ether ETF based on futures.
Last September, both Hashdex and Grayscale submitted filings to convert their respective Bitcoin futures ETFs into spot Bitcoin ETFs. The initial deadline for both filings to receive a decision was on Nov. 17, but the SEC has extended this timeframe.
The U.S. Securities and Exchange Commission (SEC) has delayed a decision on Hashdex’s application to launch a spot Bitcoin ETF in the U.S.
The regulator’s website says that the SEC also postponed its decision on Grayscale’s application to launch a futures ETF on Ethereum (ETH).
Through the application, Hashdex wants to transform its futures exchange-traded fund into a spot Bitcoin ETF. There is still no such tool in the US. Investors believe that its launch will attract institutional investors to the market. Therefore, applications for the tool have attracted the attention of the crypto community.
Next up is Franklin Templeton’s application to launch a spot Bitcoin ETF. The deadline for making a decision on it expires on Nov. 17.
Okay, we’re nearing in on deadline dates for 3 spot #Bitcoin ETF applications. I want to get ahead of it because there’s a pretty good chance we’ll see delay orders from the SEC. Delays WOULD NOT change anything about our views & 90% odds for 19b-4 approval by Jan 10, 2024 pic.twitter.com/LE7sOlHAHM
Earlier, the Nasdaq exchange placed an application for an Ethereum ETF proposed by BlackRock. BlackRock has submitted a 19b-4 filing for its own Ethereum ETF on Nasdaq, where the company intends to list.
The document also states that once the ETH fund is approved, Coinbase Custody Trust Company will become the primary custodian of all Ethereum coins.
Explore the dynamics behind Bitcoin’s bullish run and the growing anticipation around a U.S.-based Bitcoin ETF. A deep dive into market trends and predictions.
Over the past few days, Bitcoin (BTC) has demonstrated significant resilience and growth, marking a noteworthy trend in the cryptocurrency market.
Amid a surge in trading volume, BTC price reached its fresh 52-week high of $37,926 on Nov.9. However, amid the volatility, the price retraced and trading at $37,100 as of Nov. 10.
This recent rise is partly attributed to a “short squeeze” – a market phenomenon where the price of an asset jumps higher than expected, forcing short sellers to cover their positions, further driving the price upward.
The ripple effects of Bitcoin’s surge were also felt in the U.S. stock market, particularly among crypto-centric companies.
Shares of prominent firms such as Coinbase and MicroStrategy showed notable increases, with Coinbase rising about 4% and MicroStrategy, holding over 150,000 BTC, increasing almost 5%.
Similarly, mining firms Marathon and Riot also saw substantial gains. This trend reflects growing optimism in the market, especially with the potential approval of a spot Bitcoin ETF in the U.S.
Let’s delve deeper into these recent developments and try to gauge where BTC is headed in the long run.
Factors underpinning BTC bull market
Bitcoin’s impressive surge, boasting a 123% year-to-date (YTD) gain, presents a remarkable contrast against turbulent macroeconomic conditions and geopolitical tensions.
This performance has led to heightened market sentiment, with traders increasingly optimistic about Bitcoin’s price trajectory.
The options market data reveals traders are positioning themselves for Bitcoin to reach the $40,000 level. This sort of bullish positioning in the options market often reflects broader investor sentiment and can have a self-reinforcing effect on the market.
Meanwhile, the fear and greed index has reached a score of 77, a level comparable to those seen when Bitcoin hit its all-time high in November 2021, indicating a significant shift in investor sentiment.
Adding fuel to the fire, the potential approval of Bitcoin spot ETFs, including those from major players like BlackRock, Fidelity, ARK Invest, and 21 Shares, has likely fueled investor optimism.
While the SEC has yet to approve a spot Bitcoin ETF, the open period for approval extends until Jan. 10, 2023, maintaining a level of anticipation in the market.
Bitcoin on-chain metrics analysis
Bitcoin’s on-chain data provides valuable insights into the network’s health, usage patterns, and potential future price movements. Let’s delve into these metrics:
Daily transactions on the BTC network
This metric represents the total number of transactions processed on the Bitcoin network within a 24-hour period. It’s a direct indicator of the network’s usage and activity level.
BTC daily transactions | Source: The Block
The significant increase from 283,000 transactions on Oct. 9 to 553,000 on Nov. 10 indicates a heightened level of activity and engagement within the Bitcoin network. This surge can be associated with increased investor interest, higher trading volumes, and potentially a growing adoption of Bitcoin for various use cases.
Typically, a higher number of daily transactions is viewed positively, as it suggests robust network health and can be a bullish signal for Bitcoin’s price.
Number of new addresses
This metric tracks the number of new Bitcoin addresses created each day. New addresses can signify new users entering the network or existing users generating new addresses for transactions.
The rise from 406,000 new addresses on Oct. 9 to 568,000 on Nov. 10 reflects growing participation in the Bitcoin network.
BTC new addresses | Source: The Block
An increase in new addresses is a precursor to increased demand for Bitcoin, which, in turn, can drive up its price. However, it’s important to note that not all new addresses represent new users, as a single user can generate multiple addresses.
Bitcoin hash rate
The hash rate measures the total computational power used to mine and process transactions on the Bitcoin network. It’s a key security metric, indicating how much computing power is required to hack or manipulate the network.
BTC hash rate | Source: The Block
The jump in hash rate from 256 EH/s on Jan. 1 to 452.01 EH/s as of Nov. 10 is a strong indicator of network security and miner confidence.
A higher hash rate implies more miners are active and investing resources, suggesting their belief in Bitcoin’s profitability and stability.
Generally, a rising hash rate is considered bullish for Bitcoin’s price as it denotes a secure and robust network attractive to both investors and users.
Bitcoin (BTC) price prediction
Reports suggest that an approval of a spot Bitcoin ETF could generate significant new demand, potentially leading to a $1 trillion increase in Bitcoin’s market capitalization.
Galaxy Digital, a prominent name in the crypto space, predicts a 74% price increase in Bitcoin in the first year following a spot BTC ETF launch. They used $26,920 as the base price, suggesting more than half the rally has already been exhausted.
This expectation is based on the premise that an ETF would make Bitcoin accessible to a broader range of investors, particularly those in traditional finance who are more comfortable with regulated investment vehicles.
Meanwhile, algorithmic models and Bitcoin forecast websites are projecting optimistic growth for Bitcoin in the coming years.
According to these Bitcoin price predictions, BTC is expected to reach around $74,195 in 2023 and increase further to approximately $90,361 in 2024.
While these BTC forecasts present an encouraging outlook, investors are advised to exercise caution and not to invest more than they can afford to lose.
Cryptocurrency markets, particularly Bitcoin, are known for their volatility, and forecasts should not be the sole basis for investment decisions.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Cathie Wood has announced that Ark Invest will collaborate with 21Shares to introduce a new suite of innovative exchange-traded funds (ETFs).
These ETFs are designed to provide investors with diversified exposure to digital assets, including Bitcoin and Ethereum futures contracts and investments in blockchain-related companies.
Ark Invest Unveils New Suite of Digital Asset ETFs
Cathie Wood’s Ark Invest, in collaboration with 21Shares, is preparing for the debut of a series of Exchange-Traded Funds (ETFs). These new offerings are intended to give investors comprehensive options for incorporating digital assets into their investment portfolios.
By utilizing on-chain indicators and their knowledge of the cryptocurrency landscape, the suite is designed to yield long-term capital growth. This will be achieved through strategic investments in futures contracts for Bitcoin and Ethereum, along with the implementation of blockchain technologies.
The ETFs resulting from this collaboration will be listed on the Chicago Board Options Exchange (Cboe), enhancing accessibility for investors. Next week, five distinctive products will begin trading, each with its unique investment focus.
Among the offerings, investors can look forward to ETFs that include Bitcoin and Ethereum futures contracts, providing exposure to the price movements of these leading cryptocurrencies without direct ownership.
Additionally, one of the products will diversify its holdings to encompass “public equities of companies engaged in the blockchain industry,” as described on 21Shares’ website. This approach ensures investors can participate in the blockchain revolution by investing in companies driving innovation.
Notably, while providing exposure to digital assets and blockchain technology, these ETFs do not enable direct investment in cryptocurrencies. Ark Invest emphasized this point by stating, “Neither the funds nor the underlying ETF invest directly in Bitcoin or other digital assets or maintain direct exposure to spot Bitcoin. Investors seeking direct exposure to the price of Bitcoin should consider an investment other than the funds.”
Market Anticipates SEC’s Decision on Spot Bitcoin ETFs
Ark Invest’s announcement coincides with a period of high anticipation in the financial world, as both traditional finance and the crypto community eagerly await a decision on the approval of spot Bitcoin ETFs.
Meanwhile, Ark Invest recently submitted a revised version of its prospectus for a Bitcoin ETF, addressing concerns raised by the U.S. Securities and Exchange Commission (SEC) and providing further clarification.
Notable financial institutions such as Fidelity, Grayscale, and BlackRock have been actively pursuing the establishment of spot Bitcoin ETFs. The potential approval of these funds has driven optimism in the cryptocurrency market, contributing to the recent surge in Bitcoin’s price.
Although the U.S. SEC has already approved funds that invest in Bitcoin futures, the approval of a spot Bitcoin ETF remains pending.
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A look into the Bitcoin price action shows a consolidation under the $35,000 support level has resumed, but the majority of holders are holding steady. Onchain data has revealed that the number of Bitcoin unmoved in a 3-month timeframe has reached a record high of 88.5%. The upside potential remains huge despite the ongoing consolidation, as the top crypto is still up by 26% since the beginning of October.
BTC Price Drops Below $35,000 But Investor Sentiment Remains Bullish
Bitcoin managed to push above $35,000 a few times this week, propelling millions of BTC wallets into profitability. The crypto has since dropped below $35,000, but long-term investors remain optimistic, according to on-chain analytics of Bitcoin movement. One particular metric that speaks a lot about the current Bitcoin cycle is Glassnode’s HODL Waves.
HODL Waves change color based on their age in wallets. Bitcoins start at red immediately after they’re transferred into wallets and gradually transition to purple as they continue to remain unmoved.
This metric, which tracks the age of Bitcoins on the move and on wallets, has shown almost 90% of BTC total supply has remained idle in the past three months.
The hilarious thing is that 88.5% of the #bitcoin supply hasn’t moved in the last three months.
Wall Street is gonna have to really pump this thing to get hodlers to part with their coins. $BTCpic.twitter.com/CtD7GoA9ka
A similar metric from IntoTheBlock has shown retail traders joining the long-term holder bandwagon as investors start to hold on to their assets in the prospect of a BTC spot ETF approval by the SEC. IntoTheBlock’s holding metric puts the number of addresses holding Bitcoin for more than one year at an all-time high of 34 million addresses.
BTC market cap currently at $679.499 billion on the daily chart: TradingView.com
Investors Anticipate SEC Approval Of Spot Bitcoin ETFs
Several factors have contributed to the increase in long-term confidence of Bitcoin investors, one of which is the commencement of a spot ETF trading in the US. The industry expects the SEC’s approval of spot Bitcoin ETFs to ignite the next bullish run for the price of Bitcoin. A top executive at Valkyrie Investments is very confident these ETF applications will be approved by the end of the month.
However, Singapore-based QCP Capital attributed the recent spike in Bitcoin to macro forces like the drop in US bond yields, not the excitement around spot ETFs. Low bond yields force investors to look into higher-yield investments like BTC.
Overall, Bitcoin looks to remain in a consolidation phase until buyers step back in or some catalyst drives the next rally. The last time Bitcoin’s supply reached 88% for this metric was during a consolidation in late 2022, where bears got the better and Bitcoin dipped below $20,000. A continued consolidation could see Bitcoin follow this pattern, breaking below its current range to reach $30,000.
Michael Saylor, the executive chairman and co-founder of MicroStrategy Inc, anticipates a substantial surge in Bitcoin’s value following the US Securities and Exchange Commission’s approval of a spot ETF, and a subsequent surge in demand for the leading cryptocurrency.
Renowned as a Bitcoin advocate, Saylor reaffirmed his belief in the unparalleled potential for Bitcoin, foreseeing a tenfold upsurge in its value.
This week, Bitcoin hovered near the $36,000 mark, narrowly missing it before tumbling back to $34,300. The abrupt correction followed a nearly 25% climb in the last month, prompting some traders to seize profits and market participants to re-evaluate the driving forces behind the rally.
“When banks and responsible custodians are managing #Bitcoin & the industry takes its eyes away from all of the shiny little tokens that have distracted & demolished shareholder value, I think the industry moves to the next level and we 10X from here.” @saylor to @SaraEisenpic.twitter.com/sVKugHt7Tx
Although the nearly 5% intraday retreat signaled what some analysts call a “cooling-off stage”, several market observers maintain a positive outlook on the crypto.
Despite the volatility, Saylor remained unfazed by the erratic price action. On November 1, MicroStrategy’s announcement of purchasing 155 Bitcoins for $5.3 million showcased an unwavering commitment to the cryptocurrency, underscoring the resilience of those who continually support Bitcoin through market fluctuations and price swings.
At present, the SEC is in the process of examining many applications for a Bitcoin ETF following a prolonged period of delay. According to numerous analysts, it is widely speculated that an approval may be forthcoming as early as January 2024.
Image: Screen grab from CNBC
During his discussion with CNBC, Saylor conveyed that a yearly $12 billion of natural selling is anticipated to transform into $6 billion annually, aligning with the escalating demand for bitcoin driven by spot bitcoin ETFs.
He underlined the prevalent bullish outlook, emphasizing the upcoming 12-month period’s potential as a result of the expected rise in demand and a concurrent reduction in supply, “and this is fairly unprecedented in the history of Wall Street,” he said.
Bitcoin currently trading at $34,835 territory. Chart: TradingView.com
Key Factors Driving Saylor’s Conviction In Crypto’s Future
Saylor’s conviction in the cryptocurrency is further derived from the convergence of several forthcoming Bitcoin-related developments throughout the upcoming year. Firstly, it is important to note that Bitcoin is scheduled to undergo a “halving” event in April 2024.
This event will result in a 50% reduction in Bitcoin mining incentives, so significantly decreasing the quantity of Bitcoin that is expected to be introduced into the market by miners.
With a valuation of $34,715 at the time of writing, based on figures by CoinMarketCap, and an impressive 24-hour trading volume of nearly $20 billion, Bitcoin is holding its ground and indicating a flurry of activity in the cryptocurrency space.
Image: Shutterstock
With a measly 2.1% decline, Bitcoin is still the market leader with a $678 billion market value, demonstrating its unwavering dominance. This developing narrative is fueling conversations about scarcity and value as the circulation supply of Bitcoin gets closer to the 19 million mark, which is close to its finite cap of 21 million.
Meanwhile, a significant breakthrough occurred when Bernstein, an investment research firm that had previously expressed doubts about Bitcoin’s prospects, recently issued an optimistic prognosis. They projected that by 2025, the cryptocurrency may be worth $150,000, if there was a real chance that a spot Bitcoin ETF would acquire approval. It’s important to remember that Bitcoin reached its highest point in November 2021, briefly surpassing $69,000.
Steven McClurg, co-founder of Valkyrie Investments, believes the U.S. Securities and Exchange Commission (SEC) will approve multiple spot Bitcoin exchange-traded fund (ETF) applications in November 2023.
In his assessment, firms have addressed all the issues of market manipulation raised by the regulator.
By McClurg’s estimation, the regulator may send another round of comments to those who submitted for the ETFs in the next one to three weeks, followed by approval of 19b-4 rule changes in November 2023.
However, the market will likely see spot Bitcoin ETFs in February 2024. This comes after McClurg expressed belief in a Bitcoin spot ETF approval by at least Q2 of next year in a recent interview with Forkast.
“A late November approval likely means a February launch. Before anything else happens, we get a second round of comments. We’ll probably get those comments in the next one to three weeks.”
Valkyrie Investments co-founder Steven McClurg
Valkyrie Investments recently filed an updated application for its Valkyrie Bitcoin Fund with the SEC, indicating that investors could purchase common shares backed by Bitcoin under the ticker BRRR on Nasdaq.
However, other players in the race for spot Bitcoin ETF approval in the U.S. include BlackRock, Invesco, WisdomTree, and Direxion.
Crypto markets have given up some ground after rallying sharply to start the week on optimism that a spot Bitcoin ETF could be approved sooner rather than later.
Bitcoin is down 3% in the past 24 hours, while ETH trades 3.5% lower at $1,800. The consolidation comes after Bitcoin hit a 17-month high of $35,900 on Nov. 1, just a day after the world’s most valuable cryptocurrency turned 15.
BTC Price Action
Meanwhile, the GBTC discount – the difference between the value of a GBTC share and the value of Bitcoin backing it – continues to narrow as investors hope for the conversion of Grayscale’s closed-ended fund into an ETF.
GBTC Discount chart
Solana’s SOL is down 9% today but remains up 20% in the past week on positive cues from the ongoing Breakpoint developer conference.
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Most of the top 100 digital assets by market capitalization are down over the past day, with the exception of CRO, the token of the Crypto.com exchange; MNT, the network token of an Ethereum Layer 2 backed by ByBit; and Cardano’s ADA token.
$180M In Liquidations
As of 2pm ET, more than $180M of leveraged positions had been liquidated over the previous 24 hours, with traders on both sides of the market being whipsawed by the volatility.
24H Liquidations
Prior to the selloff, elevated funding rates on perpetuals exchanges were indicative of retail traders piling on leverage to chase the rally.
Perpetual Funding Rates As Of 3AM ET on Nov 2
Some market participants warned that sentiment was getting ahead of the price action.
Biggest Losers
Crypto casino Rollbit saw its RLB token dive 14% today, the most of any top 100 digital asset. Decentralized graphics solution RNDR and memecoin PEPE dropped 12%.
Prominent projects Aave, Fantom, Lido, Arbitrum, Optimism, Synthetic and Chainlink all shed between 7% and 10%.
The price of the first cryptocurrency could rise to $150,000 by January 2025 due to the approval of spot Bitcoin (BTC) ETFs in the United States.
As reported by CNBC, citing a Bernstein forecast, the bullish estimate for digital gold quotes is almost five times higher than the current rates above $34,000, where the asset has consolidated after testing the $35,000 mark. The forecast is also more than double the all-time high of $69,000 achieved by the BTC in November 2021.
Bernstein senior analyst Gautam Chhugani believes the SEC will approve the first Bitcoin ETFs in early 2024. This product will allow ordinary investors to access cryptocurrency directly from their investment portfolios.
According to the expert, as a result, Bitcoin funds will accumulate up to 10% of the total supply of digital gold. So far, the only such instrument on the market is Bitcoin Trust (GBTC) from Grayscale, which accounts for about 3% of the issue.
“A good idea is only as good as its timing – SEC approved ETFs by world’s top asset managers (BlackRock, Fidelity, et al), seems imminent.”
Gautam Chhugani, Bernstein senior analyst
The expert made his forecast in a report in which he analyzed the activities of several mining companies in light of the approaching Bitcoin halving. According to Chhugani, the halving of the block reward, expected in April, will “wash out” weak players from the industry. However, this will open the way for “survivors to greater profits,” he emphasized.
Previously Crypto services provider Matrixport insisted Bitcoin is still on track to reach $45,000 by the end of the year. Experts believe BTC futures funding rates stay “sky-high,” signaling a “FOMO-driven market.”
Image: Shutterstock
