Spot Bitcoin ETFs this week recorded impressive inflows as the digital currency continued to battle the bears at the $41,000 level. Meanwhile, the cryptocurrency scene has seen updates regarding the Coinbase v. SEC case.
First week of trading: Bitcoin ETFs
- This week marked the first week of trading for the recently approved Bitcoin ETFs. Most products saw massive inflows, with BlackRock's IBIT posting $500 million and Fidelity's FBTC seeing inflows of $421 million, according to a January 16 report.
- Grayscale Bitcoin Trust (GBTC), which was already managing investments before converting to an ETF, was the only Bitcoin ETF to see net daily outflows, totaling $579 million as of January 16. This is due to the high fees behind it. By 1.5%.
- In another interesting metric, the data confirmed that as of January 16, all spot Bitcoin ETFs had a combined volume of $1.8 billion. This number was nearly four times the total volume of all 500 ETFs launched last year, which reached $450 million on the same day.
- A report dated January 18 highlighted that the fourth day of trading saw these products attract $2.9 billion overall, excluding GBTC. Products from BlackRock, Fidelity, and Bitwise saw the highest inflows, while GBTC recorded outflows.
- By the fifth day of trading, GBTC saw an outflow of 10,824 BTC with an average value of $445 million. However, other ETFs saw another batch of inflows and the entire market recorded inflows of 10,667 BTC worth $439 million.
Thailand, Singapore and Korea on Bitcoin ETFs
- Amid the growing market, countries in Asia revealed their stance on spot Bitcoin ETFs this week. On January 17, Thailand's Securities and Exchange Commission (SEC) banned investors from trading ETFs in the international market, citing market starvation.
- Also, Singapore's central bank, the Monetary Authority of Singapore, on January 18, warned investors in the city-state against buying or trading spot Bitcoin ETF products in the international market.
- Meanwhile, the South Korean presidency has tasked the country's Financial Services Commission (FSC) to reconsider its position on spot ETF products. Remember, the Financial Services Commission has previously advised investors not to trade the products.
Sustainable discussions
- Amid the impressive performance of the new spot BTC ETF products, discussions surrounding the investment vehicles have spilled over this week. Grayscale CEO Michael Sonnenshein predicted this week that fewer than five out of 11 BTC ETFs would survive the long term.
- The market may soon see the start of options trading for ETF products, as the US Securities and Exchange Commission has acknowledged Nasdaq's 19b-4 filing to open derivatives trading for investment products. The agency has now opened a 21-day window for public comments.
- While discussions have primarily focused on Bitcoin ETFs, Fidelity this week anticipated a decision from the SEC on its instant filing for an Ethereum ETF. In its usual fashion, the SEC delayed a decision on the filing, setting a new deadline of March 5.
Dimon's advice for Bitcoin investors
- Despite JPMorgan Chase & Co. being an authorized participant in BlackRock's IBIT, Jamie Dimon, the bank's CEO, continues to attack Bitcoin and the entire cryptocurrency industry.
- Dimon, 67, told CNBC that his advice to investors is not to get involved in Bitcoin.
- Meanwhile, Bitcoin continued to struggle this week after falling from $48,000 on January 11. As the market turmoil continued, miners began selling their portfolios, offloading 10,233 BTC on January 17. This marked the largest daily decline in miners' reserves in more than a year.
BTC is fighting $41,000
- Since the crash from the highs of $48,969, Bitcoin has been struggling to withstand pivotal psychological price thresholds. However, the asset has failed to fend off the bears in this regard.
- Despite this massive failure, Bitcoin continued to defend the $41,000 area, hedging against any declines below this level. The asset recorded a breakout on January 19, falling to $40,280. However, a quick recovery saw the $41,000 level reclaimed.
- Amid the drop to $40,280, the broader cryptocurrency futures and perpetual market saw massive liquidations worth $252 million on January 19, with Bitcoin and Ethereum (ETH) accounting for most of that figure.
- IntoTheBlock has released a report aimed at highlighting the factors that led to BTC's decline. They noted increased movements by long-term BTC holders, BTC outflow on centralized exchanges, selling from long-term holders, and a shift in BTC between wallets.
- However, this decline triggered a “buy the dip” campaign from Bitcoin miners. After unloading 10,233 BTC on January 17, miners collected 12,058 BTC worth $494 million on January 19 amid the Bitcoin collapse.
TrueUSD decouples from the dollar
- Meanwhile, this week saw the first instance of a mainstream stablecoin being unpegged as market turmoil continues. The latest victim was TrueUSD, which fell to $0.985 on January 16, according to CoinGecko data.
- Reports indicated that one of the factors behind the decoupling event was the massive outflow situation involving the stablecoin.
- The data confirmed that market participants were emptying their TrueUSD portfolios to convert to USDT, with $340 million in sales in 24 hours as of January 16. TrueUSD is trading for $0.9872 at the time of writing.
Coinbase vs SEC
- Coinbase's legal battle with the US Securities and Exchange Commission also made headlines this week. Coinbase is seeking to have the SEC case dismissed, and a hearing is scheduled for January 17. In a report dated January 16, the Wall Street Journal confirmed that its motion to dismiss may not be granted.
- During the hearing, Judge Katherine Polk Failla, who presided over the case, criticized the SEC's use of the Securities Exchange Act of 1933 — a 90-year-old statute — to regulate emerging technologies like cryptocurrencies and bitcoin.
- Shortly after the hearing, Elliott Stein, a prominent judicial analyst, said the judge would likely grant Coinbase's request to dismiss the case. Recall that the SEC lawsuit alleges that Coinbase offered unregistered securities on its exchange platform.
