Overview
In a historic event for Bitcoin and the larger crypto industry, the US Securities and Exchange Commission approved the first US-listed exchange-traded funds (ETF) to follow Bitcoin. Following the Securities and Exchange Commission’s approval on Wednesday afternoon, the highly awaited products will make their debut on U.S. platforms operated by the NYSE, Cboe Global platforms, and Nasdaq, aided by major trading firms that aim to offer liquidity because U.S. stock exchanges open at 4 a.m. ET (09:00 UTC), the buying and selling might technically begin as early as 4 a.m. ET (09:00 UTC). Following the decision, the price of Bitcoin surpassed $47,500. Other cryptocurrencies rose as well.
Fundamental Updates
Let’s delve into the significant developments shaping the crypto market landscape:
- Fee War for Bitcoin ETF: Some Bitcoin ETF issuers are decreasing their projected fee hours after stating how much they’ll charge investors, indicating how fierce the fight to accumulate assets will be if these products are authorized this week.
- Grayscale, which already offers a bitcoin investment product the entrants are seeking, is sticking to its far higher charge, and Tuesday’s reduction increased the distance. Valkyrie dropped its fee in half to 0.49% from 0.8% and stopped charging for three months.
However, the crypto asset management remains higher than competitors Invesco, which also decreased its charge by 20 basis points to 0.39%. Bitwise, already the lowest-cost choice at 0.24%, dropped to 0.20%, making it even cheaper than 21Shares, Ark, and VanEck, which have maintained their 0.25% starting costs. WisdomTree dropped 20 basis points to 0.30%, and Fidelity to 0.25%. It’s easy to lower the cost, but hard to raise it after conversion. It seems reasonable to start high and adapt to minimize asset under management (AUM) losses and sustain fees.
- Smart money bets on the Ethereum ETF speculation: Ether traders, who are expecting a spot ether product as well, are optimistic about the approval of spot bitcoin ETFs. BlackRock has already submitted a prospectus to the SEC for its exchange-traded fund that tracks spot ether, called the iShares Ethereum Trust.
An ether ETF’s possible approval might spur interest in and investment in layer 2 networks and Ethereum-based initiatives, spurring further ecosystem development and innovation. The price of ETH has increased by 10% in a day. An ETF for spot ether is already in the works. The documents were submitted to the Securities and Exchange Commission (SEC) in September by Ark 21Shares and VanEck, the sponsors of authorized bitcoin exchange-traded funds. Additionally, an S-1 prospectus for its iShares Ethereum Trust was submitted in November by BlackRock, the largest asset manager in the world and sponsor of a Bitcoin ETF.
Key Data Points
- Total market capitalization: The total market capitalization of the crypto market is currently around $1.893 trillion. This is a net $130 Billion change from last week.
- Bitcoin dominance: Bitcoin dominance, which tracks the percentage of the total market capitalization that is held by Bitcoin, is currently at around 48.8%. This is 2% down from last week.
- ETH dominance: ETH dominance, which tracks the percentage of the total market capitalization that is held by Ethereum, is currently at around 16.900%. This is 4% up from last week.
Bitcoin Price Analysis:
Bitcoin closed above the resistance level at $44,919, signaling that the second leg of the uptrend has begun, with a probable objective of $48,000. The bears are attempting to drive the price back below the breakout mark of $44,919 in order to catch the aggressive bulls off guard. If they do, the BTC/USDT pair may see an extended liquidation and fall to $42,000. Below this level, selling might pick up, and the pair could drop to $39,000.Instead, a rebound from $44,919 indicates that the bulls are attempting to convert the level into support. This increases the chances of a rally to $48,000 and then to $50,000.
BTC Technical Indicator:
Macro Updates:
- European Central Bank Vice-President Luis de Guindos has predicted a Eurozone economic downturn and a slowing in disinflation from last year. De Guindos said in Madrid that mild signs suggest a decrease in December 2023, raising concerns about a technical recession in the second half of the year and worsening near-term prospects.
- Inflation continues over the 2% objective, complicating the ECB’s interest rate cut decisions.
- The US stock market gained as investors awaited new inflation data, which is expected to provide further insight into future interest rate developments.
- The focus now switches to tonight’s 21:30 SGT release of the US Consumer Price Index (CPI), which is likely to be a crucial indicator for future economic and monetary policy developments.
Bitcoin returns were 9.2% for this week. The Alpha Blue Chip Focused Strategy returns were 1.07% during the same period (05 January -11 January). The Top Cap Digital Assets Strategy and Arbitrage Opportunities & Balanced Strategy returns were -6.57% and -1.72%, respectively.
