Hashdex, one of the 13 asset management firms vying for a coveted spot in the Bitcoin exchange-traded fund (ETF) market, is optimistic about the prospects for the first spot Bitcoin ETF in the United States.
According to Hashdex’s U.S. and Europe head of product, Dramane Meite, the anticipated arrival of a spot Bitcoin ETF in the U.S. has shifted from a question of “if” to a matter of “when.”
In a 2024 outlook report released on December 4, Meite expressed the belief that U.S. investors will gain access to a spot Bitcoin ETF by the second quarter of the upcoming year, with a spot Ether ETF likely to follow suit.
Currently, Hashdex is among the 13 asset managers that have submitted applications for a spot Bitcoin ETF to the U.S. Securities and Exchange Commission (SEC).
Additionally, Hashdex has proposed a hybrid Ether ETF, incorporating both futures and spot contracts, to the regulatory authority.
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Although Bloomberg ETF analysts, James Seyffart and Eric Balchunas, have estimated a 90% likelihood of spot Bitcoin ETF approvals in the days leading up to January 10, 2024, it is important to note that the separate Form S-1 application must also receive approval before an ETF can be launched.
Seyffart has emphasized that there could be a period of several weeks or even months between approval and the actual ETF launch.
Companies typically use Form S-1 to inform the SEC about proposed rule changes, requiring endorsement from the agency’s Division of Corporation Finance.
Meite, in Hashdex’s report, highlighted that the introduction of spot Bitcoin and Ether ETFs would mark a significant milestone, as established legacy asset managers with strong brand recognition would be offering cryptocurrency products to their customers for the first time.
He further speculated that this development could unlock a colossal $50 trillion market, surpassing the combined sizes of Europe, Canada, and Brazil—the only three global markets currently featuring spot crypto exchange-traded products.
In all likelihood, the majority of interest in single-asset ETFs would gravitate towards Bitcoin and Ether due to their widespread recognition and minimal differentiation among incumbent offerings.
In October 2023, BlackRock, the world’s largest asset manager, received a noteworthy infusion of $100,000 in seed funding for its Bitcoin (BTC) exchange-traded fund (ETF), as reported in their recent filing with the United States Securities and Exchange Commission (SEC).
The SEC disclosure shed light on the specifics of this investment, revealing that an undisclosed investor had committed to purchasing 4,000 shares at a price of $25.00 per share, totaling $100,000, on October 27, 2023.
This investor also assumed the role of a “statutory underwriter” concerning the Seed Creation Baskets.
Additionally, BlackRock disclosed its strategy for managing sponsor’s fees, indicating that it intends to acquire Bitcoin or cash through short-term trade credit from a trade credit lender.
This approach allows BlackRock to collect its fees via loans, mitigating the need to sell BTC from the ETF assets. Consequently, this method minimizes any significant impact on the BTC price.
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Trade credit settlements are scheduled to transpire on the subsequent business day following the execution date and incur a financing fee.
This fee is calculated at 11%, plus the federal funds target rate divided by 365. For instance, if the federal funds target rate was 5.50% on November 20, 2023, the hypothetical financing fee on borrowed funds would amount to (11% + 5.5%) divided by 365.
Eric Balchunas, an ETF analyst, described these revelations as an intriguing development within the financial sector.
BlackRock emerged as an early pioneer among institutional giants by filing for a spot Bitcoin ETF back in July. Notably, their application is among the 13 awaiting a verdict from the SEC.
Although the SEC has previously rejected applications for spot BTC ETFs, market experts speculate that the agency is likely to grant approval for the first spot BTC ETF in the United States by early 2024, reflecting the growing acceptance and integration of cryptocurrencies into traditional finance.
Gold and Bitcoin have both hit remarkable milestones, making headlines in the financial world. Gold soared to an unprecedented all-time high of $2,100 during the Asian trading session on December 4th.
Simultaneously, Bitcoin experienced a remarkable surge, surpassing $41,000 for the first time in 19 months.
Bitcoin’s resurgence above the $40,000 mark, a level last seen in April 2022, was accompanied by a rapid 2% increase over a 24-hour period.
This surge marked a 19-month high for the cryptocurrency, bringing its year-to-date gains to an astonishing 140%.
Markus Thielen, the head of research at Matrixport, has provided optimistic insights into Bitcoin’s future.
Drawing on historical trends, Thielen predicts that Bitcoin could surpass $60,000 by April of the following year and potentially reach as high as $125,000 by the end of 2024.
These projections are anchored in the recurring pattern of price surges leading up to Bitcoin halving events, with an anticipated surge of over 200%.
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Adding to the excitement, there is growing anticipation surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States.
With 13 bidders vying for approval, including industry giants like BlackRock and Grayscale, all eyes are on the Securities and Exchange Commission (SEC) for a decision.
Bloomberg’s ETF analysts believe that there is a high likelihood of simultaneous approvals for all pending bids by January 10th.
Such approvals would mark a new era of institutional involvement in Bitcoin and potentially provide a significant boost to its price.
Bitcoin analyst Willy Woo expressed his optimism by comparing the situation to the launch of the first commodity ETF, SPDR Gold Trust, which led to an eight-year rally in gold prices from 2005 to 2012.
This historical precedent suggests that Bitcoin’s recent climb above $40,000 reflects a bullish sentiment driven by the imminent approval of a spot Bitcoin ETF in January and the potential for broader regulatory advancements.
Additionally, Bitcoin’s upcoming halving event is expected to provide further upward momentum for its price over the next five months.
Overall, both gold and Bitcoin are riding high, with investors closely watching their upward trajectories.
The price of Bitcoin (BTC) is poised for a potential correction following the approval of spot Bitcoin exchange-traded funds (ETFs), according to experts.
Bitcoin has witnessed significant gains over the past 11 months, driven by various factors such as banking uncertainty, the filing of a spot Bitcoin ETF by BlackRock, and optimism surrounding ETF approvals.
On December 3rd, Bitcoin reached a 19-month high by surpassing the $40,000 mark.
James Edwards, a cryptocurrency analyst at Finder, suggests that the approval of a spot Bitcoin ETF could trigger a “sell-the-news” event, which is a situation where an asset rises in anticipation of positive news but declines once the news is confirmed.
Edwards believes that widespread institutional buying may not happen immediately upon ETF approval and could take months or even years to materialize.
However, not everyone is convinced that a significant correction is imminent.
Ryan McMillin, the chief investment officer at Merkle Tree, acknowledges that Bitcoin has gone without a correction for over 100 days, indicating an increased risk of correction.
Still, he believes that the high anticipation surrounding spot Bitcoin ETFs will likely lead to a quick recovery in the event of a sell-off.
CK Zheng, co-founder of ZX Squared Capital, predicts that any price pullback in Bitcoin will be shallow due to strong fundamentals.
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Factors such as the upcoming Bitcoin halving, extensive money printing by global central banks, and ongoing geopolitical uncertainty contribute to the cryptocurrency’s resilience.
Despite the logical expectations of a correction, cryptocurrency remains a “wild card” in the financial markets. It often defies conventional wisdom, and market movements may not align with logical predictions.
Looking ahead to December, analysts do not anticipate a loss of momentum for Bitcoin. Institutional investors have reportedly been speculating on ETF approval, with increased inflows into existing Bitcoin futures ETFs in recent days.
This suggests that prices may remain relatively stable as investors await confirmation, either from technical charts or an official ETF approval.
Crypto lawyer Joe Carlasare sees “little chance” of a significant Bitcoin correction before ETF approval, as the market is only weeks away from the likely approval date.
Henrik Anderrson, Chief Investment Officer at Apollo Capital, believes that the approval of multiple spot Bitcoin ETFs could redirect mainstream attention towards the cryptocurrency market.
The industry is eagerly awaiting a potential approval window between January 5th and 10th, 2024, which could have a substantial impact on Bitcoin’s future performance.
Swan Bitcoin’s CEO, Cory Klippsten, has proposed that spot Bitcoin exchange-traded funds (ETFs) could significantly alter the landscape of cryptocurrency marketing.
In a recent interview with Bloomberg on December 1, Klippsten emphasized that Bitcoin ETFs provide an alternative means of entering the crypto market, one that can bypass the noisy and often manipulative marketing tactics that have dominated the space since 2017.
Klippsten noted that over the past six years, the crypto industry has been inundated with aggressive marketing schemes fueled by substantial venture capital investments, which aimed to promote and sell various crypto tokens.
These strategies often lured newcomers into the space with flashy promises and high-risk propositions.
In contrast, Klippsten explained that Bitcoin ETFs function as a form of IOU for Bitcoin itself, differing from futures-based alternatives.
They represent a paper version of the cryptocurrency, but the issuing firm is required to secure the investments by purchasing actual Bitcoin.
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This, he believes, makes ETFs a more secure and reliable entry point for newcomers looking to invest in Bitcoin.
Furthermore, Klippsten shares the optimism of many crypto analysts who anticipate a “clear runway” for Bitcoin ETF approval in January.
He highlighted a potential approval window around January 8th, 9th, or 10th, based on signals from the SEC and industry insiders.
Interestingly, this perspective coincides with a recent announcement by Standard Chartered, a major banking institution, which predicted that Bitcoin ETFs could drive the price of Bitcoin up by a remarkable 165% by the end of 2024.
Standard Chartered’s Geoff Kenrick, Head of EM FX Research, West, and Crypto Research, pointed out that the shift in forecasts suggests the possibility of significant price increases before April 2024, primarily due to the anticipated introduction of US spot ETFs ahead of schedule.
In summary, Cory Klippsten’s insights suggest that Bitcoin ETFs may bring a more stable and transparent investment avenue for individuals seeking exposure to the crypto market while avoiding the noisy marketing tactics that have dominated the industry for years.
The convergence of such views, along with the anticipation of ETF approval and the positive price outlook, indicates an evolving and maturing cryptocurrency landscape.
On December 1st, Bitcoin surged to a remarkable milestone, reaching $39,000 for the first time since mid-2022.
This surge was triggered by the United States Federal Reserve’s signals of potential policy easing. Data from Cointelegraph Markets Pro and TradingView confirmed this surge, marking a new 19-month high for Bitcoin on Bitstamp.
The catalyst for this bullish movement was Federal Reserve Chair Jerome Powell’s scheduled appearance at Spelman College in Atlanta, Georgia.
Powell approached the stage with a cautious tone but made it clear that the Federal Open Market Committee (FOMC) was committed to reducing inflation to 2% over time and maintaining a restrictive policy until they were confident about achieving this objective.
Powell stated, “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease.”
Despite Powell’s caution, his comments on the state of the U.S. economy and efforts to curb inflation boosted risk asset sentiment.
Some analysts, like The Kobeissi Letter, remained skeptical about the Fed’s future actions, suggesting that the Fed would prefer a mild recession over the risk of inflation resurgence, implying a prolonged pause in policy adjustments.
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Bitcoin, however, seized the opportunity and reacted positively, in contrast to its relatively flat response to earlier U.S. macroeconomic data releases.
The next FOMC meeting, scheduled for mid-December, will be closely watched for any announcements regarding interest rate changes.
Market expectations, as of December 1st, heavily favored a pause in interest rate hikes according to CME Group’s FedWatch Tool.
In the Bitcoin market, trader Daan Crypto Trades highlighted the significant sell-side liquidity that played a role in the brief ascent to $39,000.
Keith Alan of Material Indicators shared an order book snapshot, revealing substantial resistance at $39,000 and $39,200, with notable buyer support at $38,000.
Traders and analysts in the crypto community expressed optimism about Bitcoin’s prospects.
BitQuant predicted a daily close above $38,000, which would be a powerful bullish signal, while Crypto Ed anticipated further upside potential, targeting at least $39,200 in the near term.
In summary, Bitcoin’s surge to $39,000 on December 1st was driven by the Federal Reserve’s signals of potential policy easing, despite Chairman Powell’s cautious remarks.
Market sentiment leaned towards a pause in interest rate hikes, and Bitcoin traders and analysts remained bullish on its future price prospects.
Australians are increasingly turning to cryptocurrency as a means to secure a prosperous retirement, as self-managed retirement funds show a remarkable 400% surge in cryptocurrency allocation over just four years, outpacing the growth rate of traditional stocks and bonds.
Statistics released by the Australian Tax Office (ATO) on November 26 reveal that, as of the quarter ending in September, the nearly 612,000 self-managed super funds (SMSFs) collectively hold approximately $658.6 million (992 million Australian dollars) worth of cryptocurrencies.
This figure marks a staggering 400% increase from the same quarter in 2019 when crypto holdings stood at just under $131.5 million (198 million AU).
In Australia, self-managed super funds, also referred to as private superannuation funds, empower individuals to manage and invest their retirement funds autonomously.
The ATO oversees this retirement scheme, ensuring compliance with superannuation laws.
Danny Talwar, Head of Tax at crypto tax provider Koinly, described crypto as the “largest growing asset class in SMSFs.”
In contrast, listed shares, which constitute the largest allocation category in SMSFs, grew by 28% during the same period, while allocations to debt securities like bonds declined by 5.8% over the past four years.
Despite this remarkable growth, total SMSF allocations to cryptocurrency saw a slight 0.8% dip from the quarter ending in June 2023, along with a 2.4% drop compared to the previous year.
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It’s worth noting that the current amount of crypto held within self-managed funds is still 38% lower than the all-time high of nearly $1.06 billion (1.6 billion AU) recorded in the quarter ending June 2021 during the previous crypto bull market.
Talwar highlighted that cryptocurrency accounts for only 0.1% of the total net assets held in Australian SMSFs at the end of the last quarter.
He also pointed out that smaller-sized SMSFs tend to have a larger allocation to cryptocurrencies in their portfolios.
The trend of holding crypto within super funds is on the rise, with local crypto exchanges offering crypto superannuation products.
However, Talwar cautioned that certain rules and regulations must be followed, emphasizing that the SMSF strategy should be geared toward providing a retirement benefit.
Compliance, audits, and clear separation of SMSF holdings from personal holdings are crucial to avoid complications.
Unfortunately, specific details about the cryptocurrencies held by SMSFs and their gains or losses remain unknown, as the ATO does not provide information on portfolio holdings or performance.
On November 30th, Bitcoin (BTC) displayed resilience in the face of fresh United States macroeconomic data, largely ignoring it as traders eagerly awaited the monthly closing figures.
Despite a recent failed breakout attempt, BTC prices remained in a narrow intraday range below $38,000, showing signs of stability.
The focus of market participants was on the Personal Consumption Expenditures (PCE) Index, the Federal Reserve’s favored gauge of inflation.
Hopes were high that the PCE Index would inject volatility into the market, but at the time of writing, it had not yet impacted the situation.
The data came in broadly in line with expectations, supporting the Fed’s monetary tightening stance and confirming a decline in inflation.
However, financial commentary from The Kobeissi Letter questioned whether this would lead to interest rate cuts, a critical consideration for risk assets.
Kobeissi Letter pointed to Bill Ackman, CEO of Pershing Square Capital Management, who had earlier predicted rate cuts starting in Q1 2024.
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The commentary emphasized the lag effect of monetary policy, cautioning against premature rate cuts by the Fed.
Despite the PCE data, market expectations for Fed policy remained unchanged, with data from CME Group’s FedWatch Tool indicating near-unanimous expectations of a rate hike pause in the coming month.
For Bitcoin enthusiasts, the focus was primarily on the monthly closing figures. At the time of writing, BTC/USD had posted nearly a 10% gain for November, marking the first positive performance in the 11th month since 2020.
A close above $37,660 would represent the highest monthly closing price since May 2022, a positive signal for the cryptocurrency.
Analysts also noted the bullish potential in Bitcoin’s Relative Strength Index (RSI) readings.
Traders like Jelle pointed out the formation of a hidden bullish divergence over the past month, with Bitcoin breaking its RSI downtrend.
The key focus was on whether the price could hold in the designated range, and the monthly close was eagerly awaited as the cryptocurrency market braced for potential movements.
In summary, despite macroeconomic data and Fed considerations, Bitcoin remained steady, with traders closely monitoring the monthly closing figures as the cryptocurrency aimed for positive gains in November and potential bullish momentum in the coming days.
The Chicago Mercantile Exchange (CME) Bitcoin futures market demonstrated a surging demand from institutional investors, surpassing Binance’s BTC futures market in terms of size.
This development underscores a growing confidence among these investors in Bitcoin’s potential to breach the $40,000 mark in the near future.
CME currently boasts a Bitcoin futures open interest of $4.35 billion, a level not seen since November 2021 when Bitcoin reached its all-time high of $69,000.
This significant uptick in interest is seen as a clear indicator of heightened enthusiasm. However, the question that looms is whether this surge is substantial enough to justify further price gains.
The remarkable 125% increase in CME’s BTC futures open interest, soaring from $1.93 billion in mid-October, is closely tied to the anticipation surrounding the approval of a spot Bitcoin exchange-traded fund (ETF).
It’s important to note that this movement doesn’t necessarily correlate directly with market makers’ or issuers’ actions. Cryptocurrency analyst JJcycles raised this theory in a social media post on November 26.
Institutional investors have alternative options to navigate the high costs associated with futures contracts.
They can consider CME Bitcoin options, which demand less capital while offering similar leveraged long exposure.
Furthermore, regulated ETF and exchange-traded notes (ETN) trading in regions like Canada, Brazil, and Europe present viable alternatives.
It might appear naive to assume that the world’s largest asset managers would take substantial risks with derivatives contracts contingent on a decision by the U.S. Securities and Exchange Commission, expected only in mid-January.
Nonetheless, the undeniable growth in CME Bitcoin futures open interest serves as concrete evidence of institutional investors increasingly turning their attention to the cryptocurrency market.
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CME’s Bitcoin futures activity witnessed another noteworthy development on November 28. The annualized premium for CME Bitcoin futures, typically at 5% to 10% in neutral markets, spiked from 15% to 34%, eventually stabilizing at 23% by the end of the day.
Such a basis rate exceeding 20% indicates substantial optimism, suggesting a willingness among buyers to pay a premium for leveraged long positions.
Currently, the metric stands at 14%, indicating that whatever drove this unusual movement is no longer a factor.
Notably, during that eight-hour period on November 28, Bitcoin’s price rose from $37,100 to $38,200.
However, discerning whether this surge was prompted by the spot market or futures contracts is challenging, as arbitrage between the two occurs in milliseconds.
Instead of fixating on intraday price movements, traders should refer to BTC option market data for confirmation of institutional investor interest.
The data on the 30-day BTC options 25% delta skew, consistently remaining below the -7% threshold over the past month, supports the bullish sentiment among institutional investors using CME Bitcoin futures.
This casts doubts on the theory of whales accumulating assets ahead of a potential spot ETF approval. In essence, derivatives metrics do not indicate excessive short-term optimism.
While a spot ETF approval remains a driving force, with Bitcoin’s price hovering near $38,000, it seems that bulls will continue to challenge resistance levels.
However, if market makers were overwhelmingly confident in an SEC approval, the BTC options delta skew would likely be much lower.
Swiss asset manager Pando Asset has thrown its hat into the competitive ring of the spot Bitcoin exchange-traded fund (ETF) race in the United States, surprising many with its unexpected entry.
On the same day, investment giant BlackRock engaged in discussions with the country’s securities regulator, presenting an updated ETF model based on the regulator’s feedback.
On November 29, Pando Asset submitted a Form S-1 to the U.S. Securities and Exchange Commission (SEC), the document used to register securities with the agency, outlining its Pando Asset Spot Bitcoin Trust.
Similar to other ETF proposals, this trust intends to mirror Bitcoin’s price movements, with Coinbase’s custody arm responsible for safeguarding Bitcoin holdings on behalf of the trust.
Pando Asset joins a crowded field, becoming the 13th applicant seeking approval for a spot Bitcoin ETF in the U.S., competing with heavyweights like BlackRock, ARK Invest, and Grayscale.
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In a November 29 post on X (formerly Twitter), Bloomberg ETF analyst Eric Balchunas expressed curiosity about Pando’s late filing, wondering why it emerged at this stage.
He also raised concerns about the potential implications if Pando’s ETF were to be approved alongside others on January 10, a date he and fellow Bloomberg ETF analyst James Seyffart have earmarked as a possible approval date.
This date coincides with the SEC’s deadline to either approve or deny ARK Invest’s application.
Seyffart, however, expressed doubts about Pando’s readiness to launch its ETF on the same day as others, acknowledging that unforeseen developments can occur in this space.
Meanwhile, the SEC held meetings with executives from BlackRock and Invesco on November 28 to discuss their respective ETF proposals, as revealed in agency documents.
BlackRock presented revisions to its redemption model, addressing concerns raised during a prior meeting regarding the impact on balance sheets and the risks faced by U.S. broker-dealers dealing with offshore crypto entities.
Balchunas clarified that BlackRock’s revised approach involves offshore entities acquiring Bitcoin from Coinbase and pre-paying U.S. registered broker-dealers in cash, as these broker-dealers cannot directly handle Bitcoin.
This strategy aligns with the SEC’s requirement for ETFs to have redemption models that place the responsibility on issuers to transact in Bitcoin, avoiding the need for broker-dealers to engage with unregistered subsidiaries or third-party firms for Bitcoin transactions.