Bitcoin Price Stabilizes with Reduced Volatility
The price of Bitcoin has stabilized, closing the week at around $41,600. This represents a marginal 0.4% decline compared to the previous week’s closing value of approximately $41,750. The reduced volatility can be attributed to the recent approval of ETFs by the SEC, which has put an end to speculation surrounding this development.
According to Matteo Greco, a research analyst at Fineqia International, the introduction of Bitcoin Spot ETFs has attracted significant inflows from traditional finance into the digital assets market. Since their launch, the 11 Spot ETFs have collectively attracted approximately $1.15 billion in cumulative inflows. The Blackrock Spot ETF leads the pack with about $1.40 billion in assets under management (AUM), followed closely by the Fidelity Spot ETF with approximately $1.26 billion in AUM.
GBTC Sees Over $2.8 Billion in Outflows
On the other hand, the Grayscale Bitcoin Trust (GBTC) has experienced outflows of about $2.81 billion following its conversion into an ETF. This has reduced the net inflow of the BTC Spot ETFs from $3.96 billion to $1.15 billion. Before the conversion, GBTC held approximately 620,000 BTC, which has now decreased to around 552,000 BTC.
The outflows from GBTC can be attributed to two factors. Firstly, customers holding GBTC shares were previously restricted from redeeming them and could only sell them on the secondary market. Secondly, the higher management fee set by Grayscale (1.5%) compared to most competitors (0.2%/0.3%) led some investors to withdraw their investments from GBTC.
ETH Spot ETFs on the Horizon
Following the successful launch of BTC Spot ETFs, market participants and analysts are now focusing on the potential inclusion of Ethereum (ETH) Spot ETFs. Analysts predict a high likelihood, at over 70%, of ETH Spot ETFs receiving approval this year. This expectation is reinforced by the price action of ETH immediately after the approval of BTC Spot ETFs, with capital shifting from BTC to ETH.
Market participants are banking on the approval of ETH Spot ETFs and adjusting their positions accordingly. This indicates that there is anticipation and optimism surrounding the potential approval of ETH Spot ETFs.
Hot Take: Crypto Prices Stabilize as SEC Approval of ETFs Ends Speculation and Reduces Volatility
The recent approval of ETFs by the SEC has had a positive impact on the stability of crypto prices. Bitcoin’s price has stabilized, and the introduction of BTC Spot ETFs has attracted significant inflows from traditional finance into the digital assets market. However, the conversion of GBTC into an ETF has resulted in substantial outflows from the product.
Looking ahead, there is anticipation for the potential inclusion of Ethereum in ETFs, with analysts predicting a high likelihood of ETH Spot ETFs receiving approval this year. Market participants are adjusting their positions accordingly, indicating optimism for the future.
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