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March 3, 2024
PI Global Investments
Bitcoin

Spot Bitcoin ETFs, TrueUSD, Coinbase vs. SEC


This week, spot Bitcoin ETFs recorded impressive inflows as the digital currency continued to battle the bears at the $41,000 mark. Meanwhile, the crypto scene witnessed updates on the Coinbase vs. SEC case.

First week of trading: spot Bitcoin ETFs

  • This week marked the first trading week for the recently-approved spot Bitcoin exchange-traded funds. Most products saw massive inflows, with BlackRock’s IBIT recording $500 million and Fidelity’s FBTC seeing $421 million inflows, per a Jan. 16 report.
  • The Grayscale Bitcoin Trust (GBTC), which already commanded investments before its pivot to an ETF, was the only spot Bitcoin ETF to see net daily outflows, totaling $579 million as of Jan. 16. This was attributed to its high fees, which stands at 1.5%.
  • In another interesting metric, data confirmed that, as of Jan. 16, all the spot Bitcoin ETFs commanded a combined volume of $1.8 billion. This figure was nearly four times the combined volume of all 500 ETFs launched last year, which stood at $450 million on the same day.
  • A Jan. 18 report highlighted that the fourth day of trading saw these products attract $2.9 billion overall, with the exclusion of GBTC. The products from BlackRock, Fidelity and Bitwise saw the highest inflows, while GBTC recorded outflows.
  • By the fifth day of trading, GBTC witnessed an outflow of 10,824 BTC worth an average of $445 million. However, other ETFs saw another batch of inflows and the entire market recorded inflows of 10,667 BTC valued at $439 million.

Thailand, Singapore and Korea on spot Bitcoin ETFs

  • Amid the growing market, countries in Asia disclosed their stance on spot Bitcoin ETFs this week. On Jan. 17, Thailand’s Securities and Exchange Commission (SEC) barred investors from trading the ETFs on the international market, citing the market’s nascence.
  • Also, Singapore’s central bank, the Monetary Authority of Singapore, on Jan. 18 warned investors in the city-state against purchasing or trading the spot Bitcoin ETF products on the international market. 
  • Meanwhile, South Korea’s presidency charged the country’s Financial Services Commission (FSC) to reconsider its stance on the spot ETF products. Recall that the FSC previously advised investors against trading the products. 

Sustained discussions

  • Amid the impressive performances of the new spot BTC ETF products, discussions surrounding the investment vehicles spilled into this week. Grayscale CEO Michael Sonnenshein predicted this week that less than five of the existing 11 spot BTC ETFs would survive in the long term.
  • The market might soon see options trading for the ETF products go live, as the U.S. SEC acknowledged Nasdaq’s 19b-4 filing to open derivatives trading for the investment products. The agency has now opened a window for public feedback spanning 21 days.
  • While the discussions have focused mainly on spot Bitcoin ETFs, this week Fidelity expected a decision from the SEC on its spot Ethereum ETF filing. In its typical fashion, the SEC deferred a decision on the filing, setting a new deadline for March 5.

Dimon’s advice for Bitcoin investors

  • Despite JPMorgan Chase & Co. being one of the authorized participants for BlackRock’s IBIT, Jamie Dimon, the bank’s CEO, continues to blast Bitcoin and the entire cryptocurrency industry.
  • Dimon, 67, told CNBC that his advice for investors is not to get involved in BTC.
  • Meanwhile, Bitcoin continued to struggle this week following the drop from $48K on Jan. 11. As the market turbulence lingered, miners started selling off their bags, offloading 10,233 BTC on Jan 17. This marked the biggest daily drop in miners’ reserves in over a year.

BTC battles $41,000

  • Since collapsing from the $48,969 high, Bitcoin has been battling to hold against pivotal psychological price thresholds. However, the asset has failed to hold off the bears in this regard.
  • Despite this colossal failure, BTC has continued to defend the $41,000 territory, hedging against any drops below this level. The asset recorded a breach on Jan. 19, dropping to $40,280. However, a quick recovery saw it reclaim the $41,000 level.
  • Amid the drop to $40,280, the broader cryptocurrency futures and perpetual market saw massive liquidations to the tune of $252 million on Jan. 19, with Bitcoin and Ethereum (ETH) accounting for most of this figure.
  • IntoTheBlock released a report, aiming to highlight factors behind the BTC downturn. They cited increased long-term holders’ movements, an influx of BTC in centralized exchanges, selloffs from long-term holders and a shift in BTC among wallets.
  • However, this drop triggered a “buy-the-dip” campaign from Bitcoin miners. After offloading 10,233 BTC on Jan. 17, miners accumulated 12,058 BTC worth $494 million on Jan. 19 amid the Bitcoin collapse. 

TrueUSD depegs from the dollar

  • Meanwhile, this week witnessed the first case involving the depeg of a mainstream stablecoin as the market turbulence lingered. The latest victim was TrueUSD, which dropped to $0.985 on Jan. 16, per CoinGecko data.
  • Reports suggested that one of the factors behind the de-pegging event was a case of massive outflows involving the stablecoin. 
  • Data confirmed that market participants were offloading their TrueUSD bags to pivot to USDT, with $340 million worth of sales in 24 hours as of Jan. 16. TrueUSD trades for $0.9872 at the time of this report.

Coinbase vs. SEC

  • Coinbase’s legal battle with the U.S. SEC also made headlines this week. Coinbase seeks a dismissal of the SEC’s case, with a hearing scheduled for Jan. 17. In a report on Jan. 16, the Wall Street Journal asserted that its request for a dismissal might not be granted.
  • During the hearing, Judge Katherine Polk Failla, who presided over the case, criticized the SEC’s usage of the Securities Act of 1933 – a 90-year-old legislation – for the regulation of nascent technologies such as crypto and Bitcoin.
  • Shortly after the hearing, Elliott Stein, a prominent litigation analyst, argued that the judge is likely to grant Coinbase’s request to dismiss the case. Recall that the SEC’s lawsuit alleges that Coinbase offered unregistered securities on its exchange platform.


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