ETF

Breakout or $40K bull trap? 5 things to know in Bitcoin this week

Bitcoin surges past the key $40,000 amid a macro liquidity boost, but traders’ predictions include a BTC price crash of 25% or more.

Bitcoin (BTC) starts the first week of December looking better than it has since early 2022 — at over $40,000.

BTC price action is delighting bulls already as the month begins, with the weekly close providing the first trip above the $40,000 mark since April last year.

Shorts are getting wiped and liquidity taken as the bull run sees its latest boost on the back of macroeconomic changes and anticipation of the United States’ first spot price exchange-traded fund (ETF).

Despite misgivings and some predicting a major price retracement, Bitcoin continues to offer little respite for sellers, who continually miss out on profits or are left waiting on the sidelines for an entry price that never comes.

The party mood is not just reflected on markets — Bitcoin miners are busy preparing for the halving, and with the hash rate already at all-time highs of its own, the trend is set to continue this week.

Is there more upside left, or is Bitcoin getting ahead of itself?

This is the question that longtime market participants will be asking in the coming days as legacy markets open and adjust to a post-$40,000 BTC price.

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Grayscale Bitcoin Trust aims for ETF shift to narrow discount

This move seeks to better synchronize GBTC’s shares with the real Bitcoin price and introduce a streamlined mechanism for investors to create or redeem shares effortlessly.

Grayscale, a significant player in digital asset management, has expressed enthusiasm about the potential transformation of its Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF.

The company’s chief legal officer, Craig Salm and chief financial officer, Edward McGee, revealed the details.

ETF analyst Eric Balchunas from Bloomberg observed the notable dependence on Regulation M (Reg M) relief.

Related: SEC solicits comments on Fidelity’s spot Ether ETF application

With Bitcoin (BTC) currently priced at $39,481 and a surge in trading volume indicating heightened trader interest, the prospect of a spot Bitcoin ETF ensures investors a more precise representation of Bitcoin’s value through GBTC and establishes a safer avenue for institutional investors to engage with Bitcoin.

In a Nov. 28 X (formerly Twitter) post, Bloomberg ETF analyst James Seyffart said the SEC delayed its decision on the applications 34 days earlier than the Jan. Seyffart and his colleague Eric Balchunas had placed 90% odds on spot Bitcoin ETF approvals by Jan.

Magazine: Bitcoin ETF optimist and Worldcoin skeptic Gracy Chen: Hall of Flame

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Bitcoin ETFs, user experience will drive adoption — eToro CEO

Yoni Assia told Cointelegraph that products like Bitcoin ETFs align with institutions’ existing modes of operation, making it easier for them to enter the market.

While grassroots cryptocurrency adoption went stale after last year’s implosions in the industry, trading platform eToro’s chief executive believes that the appeal of exchange-traded funds (ETFs) for institutions and ease of investing through various platforms for non-professionals could further drive Bitcoin (BTC) adoption.

EToro CEO Yoni Assia told Cointelegraph at the recent Abu Dhabi Finance Week that institutions typically have rigid systems and prefer not to build new infrastructure for each asset class.

“[Bitcoin] ETFs could be a significant driver of adoption [because] institutions work in a very rigid way. […] They’re looking for the same infrastructure, and ETF, in many cases, is that infrastructure to enable institutional demand to those who don’t want to self-custody.”

Assia added that the availability of a Bitcoin ETF would likely bolster Bitcoin’s legitimacy in the eyes of institutional investors and, in turn, could support the asset’s price, as it represents a familiar and institutionalized form of investment.

Assia (left) with Cointelegraph Arabic reporter Hermi De Ramos. Source: Cointelegraph

Bitcoin surpassed $35,000 in October, a price not seen since May 2021, partly due to excitement around spot ETF approvals.

Related: Bitcoin ETF will drive 165% BTC price gain in 2024 — Standard Chartered

Meanwhile, according to Assia, the ease of investing in Bitcoin through user-friendly platforms and its integrations into diverse investment portfolios are crucial to onboarding more retail users into the market.

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SEC solicits comments on Fidelity’s spot Ether ETF application

“Interested persons” will have 21 days to comment on a proposed rule change allowing the Cboe BZX Exchange to list and trade shares of the Fidelity Ethereum Fund.

The United States Securities and Exchange Commission called on the public to comment on a proposed rule change that could allow asset management firm Fidelity to offer shares of its spot Ether (ETH) exchange-traded fund, or ETF.

In a Nov. 30 notice, the SEC said “interested persons” may comment on the Fidelity offering, proposing the Cboe BZX Exchange list and trade shares of its Fidelity Ethereum Fund. Fidelity first filed for approval of the fund on Nov.

The filing noted that investors in other countries, “including Germany, Switzerland and France,” had opportunities to gain exposure to Ether through exchanges offering exchange-traded products.

“U.S.

The filing added:

“Approval of a Spot ETH ETP would represent a major win for the protection of U.S. investors in the crypto asset space.”

Related: Grayscale files for new Ether futures ETF — Official

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Bitcoin ETF will drive 165% BTC price gain in 2024 — Standard Chartered

Bitcoin supply shock tactics give way to ETF hype in Standard Chartered’s new $100,000 BTC price prediction.

Bitcoin (BTC) may hit $100,000 in one year’s time thanks to “earlier than expected” exchange-traded funds (ETF) launching, says Standard Chartered.

In a research note issued on Nov. 28 quoted by sources including Business Insider, the banking giant doubled down on its bullish BTC price targets.

Standard Chartered still expects six-figure BTC price

Bitcoin is in line to trade at six figures by the end of 2024, the latest forecast from Standard Chartered concludes.

Thanks to the United States potentially approving Bitcoin spot price ETFs, BTC/USD has the ability to almost treble from its current $37,700 over the coming 12 months.

“We now expect more price upside to materialize before the halving than we previously did, specifically via the earlier-than-expected introduction of US spot ETFs,” Geoff Kenrick, Standard Chartered’s head of EM FX Research, West and Crypto Research, wrote.

“This suggests a risk that the USD 100,000 level could be reached before end-2024.”

The figure continues the consumer banking giant’s already optimistic vision of how Bitcoin will grow in the coming years.

In July, research eyed the declining availability of the BTC supply as a reason to believe that much higher prices were in store.

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Bitcoin ETF race gets 13th entrant, BlackRock revises ETF model

Pando’s ETF bid comes as several spot Bitcoin ETF applications draw closer to a final decision deadline.

Swiss asset manager Pando Asset has become an unexpected late entrant into the spot Bitcoin (BTC) exchange-traded fund (ETF) race in the United States.

On the same day, investment giant BlackRock met with the country’s securities regulator to pitch an updated ETF model based on the agency’s feedback.

On Nov. 29, Pando submitted a Form S-1 to the U.S.

Like other ETF bids, the trust aims to track Bitcoin’s price with the custody arm of the crypto exchange Coinbase to hold Bitcoin on behalf of the trust.

Pando is the 13th applicant for an approved spot Bitcoin ETF in the U.S.

In a Nov. 29 X (formerly Twitter) post, Bloomberg ETF analyst Eric Balchunas said he has “more questions than answers” about Pando’s filing, questioning why it came so late.

Balchunas also raised concern about the implications should Pando’s ETF be among the Bitcoin ETF filings he predicts will be approved on Jan.

“What does that say about fair play and even society as we know it?” he added.

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FTX fiasco set back the approval of Bitcoin spot ETFs: Valkyrie investment chief

The chief investment officer at Valkyrie Investments, Steven McClurg, explains how firms are working around a challenging regulatory environment to bring Bitcoin spot ETFs to the U.S. market.

In episode 11 of Hashing It Out, Cointelegraph’s Elisha Owusu Akyaw speaks to Steven McClurg, the chief investment officer of Valkyrie Investments, about the state of Bitcoin (BTC) exchange-traded funds (ETFs) and the way forward.

Regulators in the United States have mounted stiff opposition against listing Bitcoin spot ETFs even though Canadian and European regulators have given the green light. McClurg points out that even for the Canadian and European markets, these approvals also took a long time. According to McClurg, the two biggest issues U.S. regulators have with Bitcoin spot ETFs are custody and market manipulation.

The chief investment officer believes that the custody issue would have largely been dealt with if not for the FTX fiasco, which caused regulators to take a step back to scrutinize whether custodians are safe before approving more Bitcoin investment products. On the second issue of market manipulation, McClurg believes that similar products in Canada have made a case for why such concerns are invalid.

Locally, companies like Valkyrie Investments are actively working with regulators to answer major questions surrounding the safety of Bitcoin Spot ETFs. McClurg says Valkyrie has been educating regulators on how custody works and sharing notes on due diligence done by the company on various custodians, which picked up red flags in some of the companies that went bust last year.

“We performed due diligence on Celsius, Voyager, BlockFi, and FTX, and we never onboarded with them. We decided that they were not safe platforms to be involved with.“

According to McClurg, despite the lack of United States-based Bitcoin spot ETFs, people in the country can have exposure to spot ETFs from Canada through brokerages.

Related: Bitcoin’s 2023 price action driven by the desire to regain losses, according to professional trader

He also points out that some lawmakers, especially in the House of Representatives, have been receptive to making laws that make it easier to launch Bitcoin spot ETFs. Nevertheless, McClurg maintains a pessimistic outlook on how soon consumers can access spot ETFs from the United States.

“We do believe that either in a future administration after the next elections or through legislative action, we will be able to push this forward.“

Other topics discussed include:

  • Bitcoin futures ETF vs. Bitcoin Spot ETF
  • Bitcoin mining ETFs
  • General regulatory environment for crypto in the U.S.
  • Criticisms of Bitcoin ETFs

Listen to the full discussion about Bitcoin ETFs on Spotify, Apple Podcasts, Google Podcasts or TuneIn. You can also check out Cointelegraph’s complete catalog of informative podcasts on the Cointelegraph Podcasts page.

SEC denies VanEck spot BTC trust product, commissioners see double standard

SEC Commissioners Mark Uyeda and Hester Peirce have issued a joint statement highlighting discrepancies they see in the application of standards to applicants for ETPs.

On March 10, the United States Securities and Exchange Commission ruled against a change that would allow investment manager VanEck to create a spot Bitcoin (BTC) trust. Commissioner Mark Uyeda joined his colleague Hester Peirce in releasing a statement criticizing the commission’s decision not to approve the listing and trading of the financial product. 

The commissioners noted that the SEC had denied every application for a spot Bitcoin trust that ha been filed, amounting to almost 20 over the last six years. Its decision on VanEck “repeats the analysis that the Commission has given in each of these recent orders,” they said, but:

“In our view, the Commission is using a different set of goalposts from those it used—and still uses—for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate.”

The agency argued that there is no underlying regulated market and therefore VanEck has no “comprehensive surveillance-sharing agreement with a regulated market of significant size related to spot bitcoin.” While that is a requirement applied to all exchange-traded products (ETPs):

“It is also clear that the Commission is using a uniquely burdensome definition of ‘significant’ in its analyses of spot bitcoin ETP filings.”

The commissioners said the SEC had not required any connection between the spot and futures markets to be demonstrated for other commodity-based ETPs, and “significant” seemed to be applied to liquidity and volume of the trading venue in cases that do not involve Bitcoin. The SEC is required by law to explain changes to its policy for approving commodity-based ETPs, they added.

Related: Here’s why the SEC keeps rejecting spot Bitcoin ETF applications

VanEck has a Bitcoin futures-linked financial product. It began its attempts to gain approval for a spot-linked product in 2017. The SEC delayed making a decision on the company’s current, and third, application for a spot ETP for months.

Uyeda, who was nominated by U.S. President Joe Biden and appointed to his post in June, released a statement on the SEC’s proposed toughening of custody rules in February, in which he stated, “This approach to custody appears to mask a policy decision to block access to crypto as an asset class.”

Judges hear oral arguments in Grayscale suit against SEC over BTC spot ETF rejection

A panel of three judges heard the sides’ arguments and posed significantly more questions about the SEC’s stance, leading to speculation about their leaning.

A panel of judges heard oral arguments in the Grayscale Investments suit against the United States Securities and Trade Commission (SEC) on March 7. Grayscale is challenging the SEC order not to approve Grayscale’s application to create a Bitcoin (BTC) spot exchange-traded fund. The SEC issued its order on July 6.

Former solicitor general Donald Verrilli Jr. represented Grayscale and SEC senior counsel Emily Parise spoke for the SEC before Chief Judge Sri Srinivasan and Judges Neomi Rao and Harry Edwards in the District of Columbia Circuit Court of Appeals. Verrilli opened, saying:

“The fundamental problem with the order is that it contradicts previous SEC orders giving the green light to Bitcoin futures ETPs that pose the same risk of fraud and manipulation and have in place the same CME [Chicago Mercantile Exchange] surveillance mechanism to protect against those risks.”

The SEC has approved investment products from Teucrium, ProShares, VanEck and Valkyrie linked to BTC futures.

Parise argued that the offerings are not comparable with the Grayscale proposal because the surveillance mechanisms are not identical, as the spot markets underlying the asset in the proposed ETF are “fragmented and unregulated,” unlike the CME, which is regulated by the Commodity Futures Trading Commission (CFTC).

Parise went on to dismiss the argument that the Bitcoin spot and futures markets move together 99.9% of the time, pointing out that it is unclear whether the futures market leads the spot market when impacted by fraud and manipulation, or vice versa.

Related: GBTC approval could return a ‘couple billion dollars’ to investors: Grayscale CEO

For the proposed Grayscale product, CME surveillance would serve as a proxy for surveillance of the spot market. Furthermore, the 99.9% correlation is based on “once-a-day” futures prices, irrespective of intraday prices, Parise added.

The judges addressed more questions to Parise than to Verrilli, leading crypto community commenters to interpret their leanings as favorable to Grayscale. They asked for elucidation, for example, on how Teucrium’s product that received SEC approval differs from Grayscale’s, and why spot and futures markets might be impacted differently by fraud and manipulation.

How does the U.S. Dollar Index (DXY) impact cryptocurrencies? Watch Macro Markets

Cointelegraph analyst and writer Marcel Pechman explains how the U.S. Dollar Index (DXY) impacts cryptocurrencies.

The show Macro Markets, hosted by Marcel Pechman, which airs every Friday at 12 pm ET on the Cointelegraph Markets & Research YouTube channel, explains complex concepts in layman’s terms and focuses on the cause and effect of traditional financial events on the day-to-day crypto activity.

In the show’s inaugural episode airing today, Pechman discusses the impact of the U.S. Dollar Index (DXY) on cryptocurrencies and how the inflation-protected bonds exchange-traded fund (ETF) provides a much better estimate of traditional markets’ demand for fixed income.

Viewers will learn how a strong United States dollar is not necessarily positive for the U.S., what is an inverse correlation, and why analysts believe a more robust DXY is inherently bearish for cryptocurrencies. 

The analyst invites viewers to experiment with the Treasury Inflation-Protected Securities (TIPS) ETF, a government debt instrument that benefits from higher inflation — hence, a better sentiment gauge on demand for risk assets, including cryptocurrencies.

Marcel explains why the $15-billion Grayscale Bitcoin Trust (GBTC) trades on stock markets below the 630,000 Bitcoin (BTC) value held by the investment vehicle. Some analysts claim that the Bitcoin bull run will be unsustainable only until this indicator flips positive — an argument that Pechman refutes.

To close the first Macro Markets show, the analyst explains in simple terms what a hawkish U.S. Federal Reserve is, how interest rate increases impact the economy and, ultimately, crypto markets. This segment has been specially crafted for traders looking for simple and direct relations between complex macroeconomic events and their impacts on markets.

If you are looking for exclusive and valuable content provided by leading crypto analysts and experts, make sure to subscribe to the Cointelegraph Markets & Research YouTube channel. Join us at Macro Markets every Friday at 12:00 pm ET.