14 Feb, 2024

Bitcoin Price Leaps Past $51,000; Market Cap Retakes $1 Trillion

Bitcoin rallied further into two-year highs Wednesday as the world's top cryptocurrency cleared the $51,000 price level for the first time in over two years. The move triggered a rally for cryptos and related stocks. Coinbase stock and bitcoin ETFs surged while bitcoin miner Marathon Digital (MARA) vaulted.Bitcoin traded above $51,600 Wednesday, climbing further against levels notched in December 2021. Wednesday's action put Bitcoin's market capitalization back above the $1 trillion mark for the first time in more than two years. BTC is now up more than 22% so far this year.Ethereum has broken past early January highs to trade at $2,747 — its best mark in eleven months.  Ethereum is up 20% so far in 2024.Crypto exchange Coinbase (COIN) surged 7.6% early Wednesday, after falling on Tuesday back below its 50-day moving average. Marathon Digital stock bolted 12.8%.Bitcoin ETF PerformanceMeanwhile, spot bitcoin ETFs traded sharply higher in premarket action. The group reported $1.1 billion in inflows for the week ended Feb. 11, according to CoinShares. Feb. 11 also marked the first full month of trade for bitcoin ETFs. Zacks reported the group accumulated $10 billion in assets during the month.BlackRock's (BLK) iShares Bitcoin Trust (IBIT) has been the clear leader in fund inflows since the spot bitcoin ETFs launched Jan. 11.  The iShares Bitcoin has reported inflows of more than $4.6 billion since Feb.11, according to data from U.K.-based Farside Investors.  iShares Bitcoin Trust rallied 4.6% early Wednesday.The Fidelity Wise Origin Bitcoin Fund (FBTC) ranks second at $3.3 billion in inflows. FBTC jumped 4.9% early Wednesday.Grayscale Bitcoin Trust (GBTC) recorded about $6.55 billion in outflows through Feb. 11, which have steadily slowed. Still, Grayscale remains the leader in terms of assets, with $22.83 billion in assets under management. GBTC rallied 4.5% early Wednesday.Despite GBTC's outflows, the new ETFs have recorded $3.77 billion in inflows since launch, according to BitMEX research.Room To RunOther trends are set to drive bitcoin in 2024, including the upcoming halving event in April and influx of institutional participation, expected as the result of the ETF launch.The most important factor, though, will be mainstream adoption, according to Joel Kruger, market strategist at LMAX Group."Now that the bitcoin spot ETFs have been approved, more of an effort will be made from traditional institutions to promote bitcoin's value proposition," Kruger told IBD.But we still have yet to see the full force of institutional inflows, says Kyle DaCruz, Director of Digital Assets Products at VanEck. VanEck launched its spot bitcoin ETF, the VanEck Bitcoin Trust (HODL) on Jan. 11. HODL recorded more than $75.5 million in inflows since launch and has $161.7 million in assets under management as of Feb. 9, according to BitMEX.A majority of financial advisors don't have access to the ETFs yet because a lot of the platforms require due diligence and other parameters to be met, which can typically take months, DaCruz told IBD. "I think when that changes, then you're talking about the true unlock of that multitrillion dollar FA chattel," he said.

02 Feb, 2024

Sneak Peek into May 23 ETF Approval Likelihood

Introducing the SEC's Potential Approval of Spot Ethereum ETFsThe Securities and Exchange Commission (SEC) is on the cusp of potentially approving Spot Ethereum Exchange-Traded Funds (ETFs), marking a significant milestone in the cryptocurrency market. Exchange-Traded Funds (ETFs) represent investment funds traded on stock exchanges, comprising a diverse range of assets such as stocks, commodities, or, in this case, cryptocurrencies.The Role of ETFs in Investment PortfoliosETFs play a pivotal role in investment portfolios by offering diversification, liquidity, and cost-efficiency, allowing investors to gain exposure to various asset classes without directly owning the underlying assets. Spot Ethereum ETFs are investment vehicles designed to track the price of Ethereum directly, providing investors with exposure to the cryptocurrency's price movements without the need to own or manage the digital assets themselves. This innovative approach extends the benefits of traditional ETFs to the realm of cryptocurrencies, offering investors a regulated and accessible avenue to invest in Ethereum.How Spot Ethereum ETFs Differ from Other Crypto ETFsSpot Ethereum ETFs differ significantly from other types of crypto ETFs, particularly futures-based ones. While futures-based ETFs derive value from futures contracts, Spot Ethereum ETFs hold physical Ethereum tokens, providing investors with direct exposure to the underlying cryptocurrency's performance. Notably, the tracking method and liquidity trading hours set them apart.In futures-based ETFs, derivatives like futures contracts are utilized to track the performance of the underlying asset, potentially leading to disparities between the ETF's value and the spot price of the asset. On the other hand, Spot Ethereum ETFs aim to closely mirror the spot price of Ethereum, offering investors a more direct and accurate reflection of the asset's price movements.Moreover, liquidity and trading hours differ between the two types of ETFs. Futures-based ETFs typically trade during the hours when futures markets are open, with liquidity potentially lower during off-hours. In contrast, Spot Ethereum ETFs trade during regular stock market hours, attracting a broader investor base and generally offering higher liquidity.Implications of SEC Approval on the Crypto MarketSEC approval of Spot Ethereum ETFs would signify a significant milestone for the cryptocurrency market, providing institutional and retail investors with a regulated avenue to invest in Ethereum. Regulatory approval instills confidence in investors by providing assurance of compliance with regulatory standards and oversight, thereby mitigating risks associated with investing in cryptocurrencies. The approval of Ethereum ETFs by the SEC is anticipated to have a positive impact on Ethereum's price and adoption, as it opens up a new avenue for investors to gain exposure to the cryptocurrency, potentially driving demand and liquidity.Potential Benefits of Ethereum ETFsEthereum ETFs offer investors regulated and accessible exposure to Ethereum, enabling them to invest in the cryptocurrency via conventional brokerage accounts and retirement savings plans. This accessibility is projected to drive both institutional and retail adoption of Ethereum, as investors are provided with a familiar and regulated investment avenue.Moreover, the introduction of Ethereum ETFs is anticipated to enhance market liquidity and efficiency. By offering additional channels for investors to buy and sell Ethereum, these ETFs can potentially reduce price volatility and enhance overall market stability. This increased liquidity benefits both investors and the cryptocurrency market ecosystem, fostering a more robust and reliable trading environment for Ethereum.Boosting Ethereum AdoptionThe approval of Ethereum ETFs is poised to significantly boost Ethereum adoption by expanding its accessibility to a broader investor base, including those who may have reservations about directly investing in cryptocurrencies. These ETFs offer a regulated and familiar investment avenue, potentially enticing mainstream investors who are intrigued by cryptocurrencies but hesitant about the intricacies of digital asset custody and management.By providing a regulated and familiar investment vehicle, Ethereum ETFs have the potential to encourage mainstream investment in Ethereum. This move not only addresses concerns about digital asset management but also fosters confidence among investors who may have been previously deterred by the complexities of cryptocurrency investing.Furthermore, the availability of Ethereum ETFs marks a crucial step towards integrating Ethereum into the traditional finance infrastructure. This integration bridges the gap between conventional financial markets and the emerging realm of cryptocurrencies, paving the way for Ethereum's broader acceptance and utilization in traditional financial settings.Moreover, Ethereum ETFs are expected to play a pivotal role in advancing Ethereum's involvement in decentralized finance (DeFi). By offering investors exposure to Ethereum-based DeFi protocols and applications, these ETFs contribute to the growth and development of the decentralized finance ecosystem, further solidifying Ethereum's position in the realm of digital finance.Looking Ahead to the Future of Ethereum ETFsLooking ahead, Ethereum ETFs hold the key to unlocking broader adoption and liquidity within the cryptocurrency market. With their regulated framework, these ETFs are poised to attract a wider investor base, injecting new liquidity into Ethereum and bolstering its stature as a legitimate investment option.Moreover, the integration of Ethereum ETFs into traditional finance infrastructure heralds a new era of legitimacy for cryptocurrencies. This integration not only bridges the gap between conventional financial markets and the crypto space but also opens doors to innovation and collaboration between these realms.As we await the SEC's verdict, investors and market participants need to remain vigilant. Assessing the potential risks and rewards associated with Ethereum ETFs and understanding their role in investment strategies is paramount. By staying informed and proactive, investors can navigate the evolving landscape of Ethereum ETFs with confidence and foresight.