Tag: etf

US SEC to Approve Ethereum ETF in May, Standard Chartered Predicts

The US Securities and Exchange Commission is likely to allow exchange-traded funds to hold the cryptocurrency Ethereum in May, Standard Chartered predicts.

May 23 is the last date by which the agency must consider ETF applications from VanEck and Ark 21Shares, the bank said in a research report Tuesday. The asset managers will be the first to come up against the final deadline.

Standard Chartered expects the SEC to rule on the applications on the final date, as it did on January 10, when it approved 10 Bitcoin ETFs. Ethereum has key similarities to Bitcoin’s legal and financial status that suggests it will follow a similar approval pattern, according to Geoff Kendrick, the head of FX Research, West, and Digital Assets Research at Standard Chartered.

Last June, the SEC left Bitcoin and Ether off a list of 67 tokens it considered to be securities. In addition, Ether — like Bitcoin — also has futures traded on the Chicago Mercantile Exchange — a key surveillance tool. At about $285 billion (roughly Rs. 23,66,701 crore), Ether is the second-largest cryptocurrency in market value after Bitcoin.

Kendrick expects Ether’s price to rise to $4,000 (roughly Rs. 3,32,168) by the projected May 23 approval date, assuming that it follows a trading pattern similar to Bitcoin through the ETF approval process. Ether traded at about $2,370 (roughly Rs. 1,96,809) on Tuesday.

That price prediction, however, is based on multiple assumptions being true, including general market sentiment for approval remaining low, implied-volatility being wrong, and the SEC approving multiple applications on the same day.

Ether is expected to avoid much of the selloffs that Bitcoin experienced post-ETF approval, Standard Chartered said. Bitcoin fell as much as 20 percent following the ETF approval as investors, including FTX, sold billions in holdings of the Grayscale Bitcoin Trust (GBTC). The fund was converted from a trust that holders couldn’t make redemptions. Grayscale’s existing Ethereum trust holds a smaller portion of the total market capitalization of Ether, compared with the Bitcoin held in GBTC.

“These factors should make ETH less vulnerable than BTC to a post-approval selloff,” Kendrick wrote.

© 2024 Bloomberg LP

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Bitwise Says Its Bitcoin ETF Collected Highest Inflow on First Trading Day

Crypto asset manager Bitwise said on Friday that $240 million (roughly Rs. 1,990 crore) flowed into its spot bitcoin exchange-traded fund (ETF), the most of the 10 such products that began trading on Thursday.

The U.S. Securities and Exchange Commission approved 11 spot bitcoin ETFs this week, including BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF, among others, after a decade-long tussle with the digital asset industry.

On the first day of trading, $4.6 billion (roughly Rs. 38,100 crore) worth of shares changed hands across all the products, according to LSEG data from Thursday which tracks total trading activity, including inflows and outflows. Reuters could not immediately verify Bitwise’s data.

Grayscale, BlackRock and Fidelity dominated total trading on Thursday, the LSEG data showed.

The products mark a watershed moment for the cryptocurrency industry that is set to test whether digital assets – still viewed by many professionals as risky – can gain broader acceptance as an investment. The market is closely watching inflows during their first few days of trading.

“We think that this will become a market measured in the tens of billions of dollars,” said Matt Hougan, chief investment officer at Bitwise.

The ProShares Bitcoin Strategy ETF, the first bitcoin futures ETF approved by the SEC in 2021, accumulated $1 billion (roughly Rs. 8,300 crore) in assets within its first days of trading.

“Matching BITO’s first-week performance would indeed signify a significant success, especially given the current state of the market cycle,” said Anthony Rousseau, head of brokerage solutions at TradeStation.

Grayscale was approved to convert its existing bitcoin trust into an ETF on Thursday, overnight creating the world’s largest bitcoin ETF, with more than $28.6 billion (roughly Rs. 2,37,101 crore) in assets under management. Its product had outflows of $95 million (roughly Rs. 787 crore) on Thursday, according to a source familiar with the matter.

The SEC had previously rejected all spot bitcoin ETFs on investor protection concerns. SEC Chair Gary Gensler said in a statement on Wednesday that the approvals were not an endorsement of Bitcoin, calling it a “speculative, volatile asset.”

Still, the regulatory nod sparked intense competition for market share among the issuers. Franklin Templeton on Friday slashed the fee for its bitcoin ETF to 0.19 percent – the lowest yet – and waived fees entirely on the product’s first $10 billion (roughly Rs. 82,900 crore) in assets under management until August. After its ETF started trading on Thursday, Valkyrie cut its fees a second time to 0.25 percent. Its Valkyrie Bitcoin ETF saw $29.44 million (roughly Rs. 244 crore) flow in during its first day of trading, the company said. Reuters could not immediately verify that number.

Valkyrie CEO Leah Wald, speaking to Reuters after the market close on Thursday, called it “a good successful trading day.”

The price of bitcoin, the world’s largest cryptocurrency, was last down 5.32 percent at $43,696 (roughly Rs. 36,22,514).

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Crypto Experts Weigh-In on Factors that Propelled BTC to Trade Above $40,000, a First Since May 2022

For the first time in nineteen months, the value of Bitcoin exceeded the crucial mark of $40,000 (roughly Rs. 33.7 lakh) in terms of its pricing on Monday, December 4. The oldest cryptocurrency, that created its last all-time high of over $68,000 (roughly Rs. 56.6 lakh) in November 2021, had traded within the range of $26,000 (roughly Rs. 21.6 lakh) and $27,500 (roughly Rs. 22.9 lakh) for most months since May 2022.

Bitcoin finally launched into the upward curve earlier this October, because CoinTelegraph mistakenly ran a false story claiming that a spot BTC ETF was approved in the US – triggering immediate inflows into the crypto asset from investors. As of October 10, BTC was trading at $28,175 (roughly Rs. 23.4 lakh).

Within 24 hours, short positions on Bitcoin contracts worth $54 million (roughly Rs. 450 crore) were liquidated, significantly weakening the bearish forces. Members from the crypto industry, for now, seem elated at this bullish sentiment that currently envelops Bitcoin against market volatility affecting smaller altcoins.

“Bitcoin has experienced a substantial surge which represents a year-to-date peak for Bitcoin, boasting a remarkable 140 percent rise since the beginning of the year. The current uptrend is largely attributed to growing expectations that the SEC might approve a spot Bitcoin ETF in January. At the time of writing, Bitcoin is trading at $40,580 (roughly Rs. 33.8 lakh),” the trade desk at Zebpay told Gadgets360.

Asset management firm BlackRock was the first big company to file seeking permission to launch a spot BTC ETF in October. BlackRock’s iShares ETF filing initiated a wave of similar submissions by other asset managers like WisdomTree, Invesco, and Fidelity, promising potential investment inflow.

The reason why ETFs (exchange traded funds) make for a lucrative investment tool for crypto outsiders is because they let investors to invest in BTC via traditional market exchanges rather than being limited to cryptocurrency exchanges.

As of now, the US Securities and Exchange Commission (SEC) has not given its verdict on ETF filings concerning BTC and ETH because it may risk the financial safety of investors. It is however anticipated that by January 2024, the SEC will give more clarity on the subject to applying crypto players.

In conversation with Gadgets360, Shivam Thakral, CEO of BuyUcoin pointed out another reason that may have nudged BTC to spike in value these past days.

“The US Fed is expected to cut the interest rate in 2024 and that may boost the liquidity in the market, we may be witnessing early signs of the same. The US Committee on Financial Services calling a December 8 hearing on digital assets may lead to a strong regulatory framework focussing on investor protection, which could prove highly beneficial for the broader digital asset market,” Thakral noted.

As per market analysts, given the potential for a recession in the US economy, fund managers are predicting an 80 percent consensus level for a trend of interest rate reduction in 2024, marking the highest consensus level ever recorded.

“The crypto market has already factored in this positive news. The market may undergo an overall accelerated upward revision. Furthermore, a new asset category within the Bitcoin ecosystem, ORDI, surged over the weekend, indicating a strong speculative sentiment in the market,” Ryan Lee, Chief Analyst of Bitget Research pointed out to Gadgets460.

With expectations of a forthcoming rate cut and growing confidence in Bitcoin ETF applications, traders are actively placing top-side options, betting on Bitcoin’s potential ascent to $45,000 (roughly Rs. 37.4 lakh) by March 2024.

Bitcoin’s market dominance, at the time of writing, stood at 52 percent as per CoinMarketCap.

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Nasdaq Refiles BlackRock’s Bitcoin ETF Application With SEC: Details

Nasdaq refiled an application with the U.S. securities regulator to list an exchange-traded fund by BlackRock that will reflect the price of bitcoin to add additional details, according to a filing made public on Monday.

The refreshed filing, submitted to the U.S. Securities and Exchange Commission (SEC) on Thursday, said that Coinbase Global will provide market surveillance in support of the proposed ETF from the world’s largest asset manager.

The move comes after the regulator reportedly had concerns over the initial filings by Nasdaq as being unclear and incomplete. It had flagged similar concerns to Cboe related to a filing from Fidelity.

The digital asset space is looking to regain popularity after a bruising 2022 that saw several crypto ventures collapse, including the spectacular implosion of Sam Bankman-Fried’s FTX.

The SEC last month sued Coinbase for failing to register as an exchange. According to Cboe’s Fidelity bitcoin ETF filing, the company’s platform represented roughly half of U.S. dollar-bitcoin trading in May.

Coinbase said in a letter filed last month in Manhattan federal court that it will ask a judge to toss the SEC lawsuit, arguing the regulator lacks authority to pursue civil claims because the crypto assets trading on its platform are not “investment contracts”, and thus not securities.

The SEC has rejected dozens of spot bitcoin ETF applications in recent years, including one from Fidelity in January 2022.

In all the cases, it said the filings did not meet the standards designed to prevent fraudulent and manipulative practices and protect investors and the public interest.

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US SEC Said to Have Raised Concerns About Bitcoin ETF to Asset Managers

The US Securities and Exchange Commission (SEC) has said recent applications by asset managers to launch spot bitcoin exchange-traded funds (ETFs) were not sufficiently clear and comprehensive, a source familiar with the matter said.

The SEC has communicated its concerns to the exchanges Nasdaq and Cboe Global Markets which filed the applications on behalf of asset managers including BlackRock and Fidelity, the source added on Friday.

Bitcoin, which has jumped since BlackRock filed its application on June 15, fell after the Wall Street Journal first reported the SEC rejection on Friday. The world’s largest cryptocurrency was last down 1 percent at $30.142 (nearly Rs. 2,500).

The SEC, Fidelity, BlackRock and Nasdaq declined to comment on the report, while Cboe was not immediately available.

The ETF filings by such major firms had sparked renewed investor hopes that a bitcoin ETF would finally be approved by the SEC, and revived interest in cyptocurrencies, which have been hit by a series of crypto company meltdowns including the sudden collapse of exchange FTX late last year.

The SEC has rejected dozens of spot bitcoin ETF applications in recent years, including one from Fidelity in January 2022.

In all the cases, it said the filings did not meet the standards designed to prevent fraudulent and manipulative practices and protect investors and the public interest.

In a bid to address these concerns, the BlackRock and Fidelity filings proposed a surveillance mechanism aimed at preventing manipulation, but the applicants did not name which bitcoin exchange would be involved.

Blockchain-related stocks fell following the SEC’s decision, with Coinbase, Riot Platforms and Marathon Digital between 3 percent and 3.7 percent lower.

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