Bitcoin and most cryptoassets appear poised to finish the week relatively unchanged despite the softness in US equities. On the positive side, the Fed’s preferred inflation gauge decelerated in April, though price increases remain fairly sticky. The price of ether (ETH) registered moderate gains after spot ether ETFs are on the verge of availability in the US, with the SEC approving key regulatory filings from issuers last week. However, they still need the agency’s approval of their S-1 filings before they can start trading. In a surprising turn of events, the SEC approved eight 19b-4 forms for spot ether ETFs from companies like Ark Invest, Bitwise, BlackRock, Fidelity, Franklin Templeton, Grayscale, Invesco Galaxy and VanEck on May 23. Issuers have quickly started to update their filings, with Fidelity’s proposed spot ethereum fund being listed on the DTCC website under the ticker FETH, joining similar listings from other applicants. Bloomberg analyst Eric Balchunas noted that the updated S-1 filings are a “good sign” and suggested that a launch by the end of June is “a legit possibility.”
In recent months, ether spot volumes had decreased after initial hopes for an ETF dwindled and the Dencun upgrade went live. However, recent data from The Block indicates that the gap between BTC and ETH is closing, with bitcoin’s moving average trading volume at about $12.9 billion compared to ether’s $11.3 billion. Ether’s current 87% of bitcoin’s daily volume is its highest relative share ever, surpassing the previous peak of 85% in June 2021. In notional terms, the $1.6 billion difference between bitcoin and ether volumes is the smallest since January 2020.
Despite the uptrend, spot ether ETFs are likely to see much lower demand than bitcoin ETFs. There are several reasons for this. First, ETH as a token offers a different value proposition compared to bitcoin, which competes with gold in portfolio allocations. Second, a JP Morgan note highlights that lower liquidity and smaller assets under management (AUM) make ether’s spot ETFs less attractive to institutional investors vs. bitcoin. Nonetheless, the bank anticipates that spot ether ETFs could attract up to $3 billion in net inflows this year, potentially rising to $6 billion if staking is allowed. Despite the SEC’s approval, there remains considerably legal uncertainty about whether ETH is considered a security in the US and surrounding its Proof-of-Stake (PoS) consensus mechanism.
Meanwhile, BlackRock’s IBIT became the largest publicly traded bitcoin ETF, surpassing Grayscale. As of Thursday this week, US spot bitcoin ETFs recorded over $50 million in net inflows, marking their 13th consecutive day of inflows. Overall, global digital asset investment products hit a year-to-date record of $14.9 billion in cumulative flows, according to a report by CoinShares. Rising crypto prices have pushed total digital asset ETPs to almost $100 billion. Additionally, long-term bitcoin holders are beginning to re-accumulate for the first time since December 2023, following several months of selling, based on Glassnode data.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $2.67 trillion – compared with $2.69 trillion last week, with bitcoin accounting for about 50.1%. Among the Top 30 cryptoassets by market cap, Uniswap (UNI) outperformed, gaining about 14.6% over the week. The price of bitcoin (BTC) rose slightly by 1.1% to $67,810 while the price of ether (ETH) increased by 2.5% to $3,783. The total value locked (TVL) in DeFi is sitting at $107 billion, with Ethereum (excluding Layer 2s) accounting for about 61% of TVL. Arbitrum One is currently the largest Layer 2 by value locked, accounting for 41% of the $46.5 billion in assets.
This Week’s Headlines
- NASDAQ-listed medical device maker Semler Scientific announces $40 million Bitcoin investment
- A16z Crypto and Ripple each donate $25 million to pro-crypto super PAC Fairshake
- Biden campaign ramps up crypto industry outreach in surprising tone “shift”, The Block reports
- Donald Trump pledges to free Ross Ulbricht, stop CBDCs, and support self custody in speech to Libertarian Convention
- US judge orders SEC to pay $1.8 million in legal fees in Debt Boxcase
- Mastercard launches peer-to-peer network for sending and receiving digital assets across borders to serve users in Europe and Latin America
- PayPal USD to go live on Solana blockchain
- USDC issuer Circle increases Brazil footprint, partners with LatAm investment bank BTG Pactual
- Gemini Earn users will get back $2.18 billion of their crypto in-kind, the crypto exchange says
- Two BlackRock funds added the firm’s IBIT spot bitcoin ETF to portfolio in Q1
- NASDAQ-listed Medical device maker Semler Scientific (SMLR) announces purchase of 581 BTC for $40 million, stock surges
- Former FTX executive Ryan Salame sentenced to seven and a half years in prison
Notable Deals and Fundraising
- Citi-backed crypto unicorn Talos acquires DeFi platform Skolem
- Bitcoin staking protocol Babylon raised $70 million in new funding led by Paradigm
- Tokenization platform Fortunafi raises funds at $48 million valuation, unveils stablecoin protocol Reservoir
- Singapore-based digital market infrastructure firm Marketnode closes Series A round, led by HSBC and Temasek
- Félix Pago raises $15.5 million to help Latino workers send money home via WhatsApp
- Decentralized AI project GaiaNet raises $10 million in funding round
- Web3 oracle developer Switchboard raises $7.5 million in Series A funding
- NodeOps raises $5 million seed round to revolutionize node orchestration layer
- Social network protocol OpenSocial raises $5 million to fuel the growth of SocialFi apps
- Web3 AI and gaming firm PlayAI raises $4.3 million in seed funding
- RWA stablecoin issuer Anzen Finance raises $4 million in seed funding
- Web3 payments firm Coinflow Labs raises $2.25 million in seed funding led by the venture firm CMT Digital
- Riot Platforms reveals bid to buy Bitfarms, following CEO ouster
