On Wednesday, Cboe BZX exchange issued listing notifications for six spot bitcoin ETFs proposed by BlackRock (BLK), Invesco, VanEck and ARK Investments.
Trading volume surged past $4 billion on Wednesday, yet investor enthusiasm quickly dissipated after an offensive tweet from the SEC dampened investor enthusiasm.
Bitcoin losses accelerate following ETF launch
Bitcoin declined from near $49,000 as cryptocurrency investors digested news that eleven spot bitcoin ETFs will launch with S-1 forms becoming effective, opening it up to billions from institutional investors who had previously shied away due to concerns over safely storing crypto assets and trading them through unmonitored exchanges that aren’t overseen by the Securities Exchange Commission (SEC).
Coinbase and Robinhood saw their shares decline by 6.7% and 3.5% respectively, further precipitating price erosion. Traders are curious whether the approval of US spot bitcoin ETFs will weigh on crypto trading platforms who may face higher operating costs and capital requirements as a result.
However, this decline may not last for too long; within 24 hours of BITO’s debut trading day on December 15th, Valkyrie’s bitcoin strategy fund (BTF) made its debut trading. Although BTF didn’t start as strongly as its counterpart BITO did initially, still managed to attract significant trading volumes and is likely an indicator that the SEC will approve two applications for ETFs that they still need to approve – something expected to spur demand for digital assets.
Ether heads for an 18% gain on week
A significant milestone in crypto was reached this week when the SEC granted approval for three exchange-traded funds that provide retail investors with exposure to bitcoin without having to handle cryptographic keys or interact with unregulated exchanges. New York Stock Exchange, Nasdaq and Cboe Global Markets each secured approval from regulators so their products could list these exchange-traded products that will allow retail investors to gain exposure without handling cryptographic keys themselves or engaging in unregulated trading platforms.
Traders took to social media to celebrate Grayscale, BlackRock and Fidelity’s announcement of three Exchange Traded Funds that will allow investors to invest in multiple assets related to bitcoin rather than having to own individual coins individually.
Crypto advocates have long anticipated ETFs. But their enthusiasm quickly dissipated after the SEC’s “X” social media account was compromised and made a false announcement that spot ETFs had been approved.
Investors also retreated from crypto-exposed companies such as chipmaker Aehr Test Systems (AEHR) and crypto mining firm Marathon Digital Holdings (MARA). MicroStrategy Inc. (MSTR), which benefits from owning Bitcoin holdings, saw shares decline after it was downgraded from “buy” to “neutral,” leading one brokerage to lower its price target to $19. Despite these selloffs, most analysts still anticipate crypto will see increases by 2024; become an Insider today and become part of this movement!
The next catalyst
Traders will closely follow the price of bitcoin and other crypto assets to see if the anticipated excitement over ETF approval holds up. Analysts predict that these funds will serve as a bridge between traditional financial markets and digital asset markets, providing newcomers an entryway into this industry.
Investors will also keep an eye out for two important inflation reports due out later this week: December’s consumer price index and producer price index will provide investors with insight into rising costs that could impact Federal Reserve interest rate decisions in 2017.
Thursday saw an unprecedented surge in trading volume for new bitcoin ETFs approved by US regulators, showing strong investor enthusiasm for these funds that provide exposure to this digital asset without holding cryptographic keys or trading with unregulated exchanges.
BlackRock Inc.’s iShares ETF unit reported that 11 newly launched spot bitcoin ETFs garnered more than $4 billion in inflows on their first day of trading, led by BlackRock’s ETF with more than $2 billion, roughly on par with what iShares Gold Trust ETF experienced upon launch. Other issuers such as Bitwise, ARK Invest and Invesco offered steep discounts for buyers attracted by such ETFs.
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