Spot Bitcoin ETFs See Impressive Inflows
This week, spot Bitcoin exchange-traded funds (ETFs) experienced significant inflows as the digital currency faced resistance at the $41,000 level. Notably, BlackRock’s IBIT saw inflows of $500 million, while Fidelity’s FBTC recorded $421 million in inflows. However, the Grayscale Bitcoin Trust (GBTC) saw net daily outflows of $579 million due to its high fees.
Data revealed that all spot Bitcoin ETFs combined commanded a volume of $1.8 billion, which was nearly four times the combined volume of all 500 ETFs launched last year. On the fourth day of trading, these products attracted $2.9 billion in inflows, excluding GBTC.
By the fifth day of trading, GBTC witnessed an outflow of 10,824 BTC worth an average of $445 million. Nevertheless, other ETFs saw additional inflows, resulting in a total market inflow of 10,667 BTC valued at $439 million.
Asian Countries Respond to Spot Bitcoin ETFs
In Asia, Thailand’s Securities and Exchange Commission (SEC) prohibited investors from trading spot Bitcoin ETFs on the international market due to the market’s early stage. Similarly, Singapore’s Monetary Authority of Singapore warned investors against purchasing or trading these products internationally.
Meanwhile, South Korea’s Financial Services Commission (FSC) was urged by the country’s presidency to reconsider its stance on spot ETF products after previously advising against trading them.
Discussions and Future Developments
The performance of spot BTC ETFs sparked discussions about their long-term viability. Grayscale CEO Michael Sonnenshein predicted that less than five out of the existing 11 spot BTC ETFs would survive in the long run.
The U.S. SEC acknowledged Nasdaq’s filing to open derivatives trading for ETF products, potentially paving the way for options trading. Additionally, Fidelity awaited a decision from the SEC on its spot Ethereum ETF filing, which was deferred with a new deadline set for March 5.
Jamie Dimon’s Stance on Bitcoin
Jamie Dimon, CEO of JPMorgan Chase & Co., criticized Bitcoin and advised investors not to get involved in it, despite his bank’s involvement as one of the authorized participants for BlackRock’s IBIT.
Bitcoin Battles at $41,000
Bitcoin has struggled to hold above key psychological price levels since dropping from its $48,969 high. However, it has managed to defend the $41,000 territory despite breaching it briefly. The broader cryptocurrency futures and perpetual market experienced significant liquidations during this period.
A drop in Bitcoin triggered miners to engage in a “buy-the-dip” campaign, accumulating 12,058 BTC worth $494 million after offloading 10,233 BTC amid the collapse.
TrueUSD Depreciates from Dollar Peg
TrueUSD experienced a depegging event as market turbulence persisted. The stablecoin dropped to $0.985 due to massive outflows. Market participants shifted to USDT, resulting in $340 million worth of TrueUSD sales within 24 hours.
Coinbase’s Legal Battle with SEC
Coinbase’s legal dispute with the U.S. SEC gained attention this week. The exchange is seeking a dismissal of the SEC’s case alleging unregistered securities offerings. Judge Katherine Polk Failla criticized the SEC’s use of outdated legislation to regulate cryptocurrencies. Analysts believe the judge is likely to grant Coinbase’s request for dismissal.
Hot Take: Bitcoin ETFs Gain Momentum as Market Volatility Persists
Spot Bitcoin ETFs have garnered substantial attention and inflows in their first week of trading, with BlackRock’s IBIT and Fidelity’s FBTC leading the pack. However, the Grayscale Bitcoin Trust faced outflows due to its high fees. Asian countries such as Thailand, Singapore, and South Korea disclosed their stances on these products, with varying degrees of acceptance. Discussions surrounding the ETFs’ long-term viability and the potential for options trading have also emerged. Meanwhile, Bitcoin continues to battle resistance at the $41,000 level amid market turbulence and criticisms from JPMorgan CEO Jamie Dimon. TrueUSD experienced a depegging event, while Coinbase’s legal battle with the SEC remains ongoing.
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