Crypto Automated Trading

ETF Week

It only took 10 years, a lawsuit won on appeal and financial giants like BlackRock and Fidelity getting involved for the SEC to finally admit defeat and approve a Bitcoin Spot ETF. Of course by now we know that little concerning crypto happens without drama. On Tuesday, Hackers took over the X/Twitter account of the SEC and announced that the ETF was approved. The statement was quickly retracted by the SEC only for the approval to be eventually announced on Wednesday. On Thursday at NASDAQ market opening, Blackrock will ring the bell to officially announce the listing of its ETF product IShares Bitcoin Trust.  10 other ETF providers including Grayscale and VanEck are launching at the same time. Interestingly, the market reacted similarly to both the ‘fake’ announcement and the actual announcement: Bitcoin rallied, Ethereum rallied even more. Volatility is running wild so by the time you are reading this, markets might have once again turned up, down or side-ways.

Whichever way you look at it, this is a momentous step for the crypto industry. A digital asset hacked together by an anonymous developer and considered to be only of use for nefarious reasons can now be traded through an ETF product. Any institutional investor such as US Pension Funds or Mutual Funds can now hold actual real Bitcoin without needing to deal with custody, wallets or accounts with unregulated crypto exchanges. Arguably, for the first time in crypto history, ‘not your keys not your coins’ no longer holds true as for most regular investors other than crypto purists, holding an ETF is as good as owning Bitcoin directly on-chain. ETFs enjoy legal protection, tax benefits and cannot be hacked and drained like a Crypto Exchange. How long will it be until most institutional investors will want to have a certain percentage of their portfolio to be allocated to Bitcoin?

After the ETF is before the ETF though. All eyes are now on a possible Ethereum ETF. The SEC is facing deadlines to make decisions on various applications between May and August. Given the narrow 3:2 decision that the SEC commissioners took to approve the Bitcoin ETF, the expectation is that the appetite among the SEC for an ETH ETF is lower than low. But the same large institutional players are pushing for it and the precedent now exists. It might be hard to argue for the SEC why an ETH ETF would not receive the same treatment as the BTC ETF. Either way, the speculation and rumours could support an Ethereum catch-up rally over the next months as the market is repositioning.

In the meanwhile, the Bitcoin Halvening is also approaching. Other narratives to watch out for are emerging with AI/Blockchain (Unlike in 2017 maybe this time for real?), the usual set of new exciting L1s launching (Monad, Berachain and SEI are capturing attention) and of course excitement is building around restaking and app-chains secured by it (Eigenlayer, Celestia, Dymension). The catalysts are certainly in place for an interesting 2024.