The wait for a US spot Bitcoin exchange traded fund (ETF) is over. After months of speculation and with a deadline looming, the SEC approved the listing of Bitcoin ETF on Wednesday evening – a watershed moment for the largest cryptoasset and the broader crypto ecosystem. Eleven ETF issuers received the green light by the agency: Bitwise, BlackRock, BZX, Fidelity, Franklin, Grayscale, Hashdex, Invesco/Galaxy, Valkyrie, VanEck, and WisdomTree. Coinbase, the custodian to eight spot Bitcoin ETFs, said that “spot bitcoin ETFs introduced by the world’s largest asset managers will unlock diversified pools of new investors to spur long-term growth and product innovation.” Trading also got off to a very good start. On the first two days of trading, the eleven ETFs registered a cumulative $7.7 billion in volume, led by Grayscale’s GBTC and BlackRock’s IBIT. On Thursday, the first day of Bitcoin ETF trading, the price of bitcoin briefly hit $48,000 – it’s highest level since early 2022. Following the initial enthusiasm, it still ended up being a “sell the news” event. On Friday, Bitcoin tumbled below $42,000 in a sell-off with crypto-focused equities including Coinbase, MicroStrategy and Bitcoin mining stocks plummeting as the ETF euphoria turned into a market rout. It appears to be a taste of what might be choppy trading in the next few months for the cryptoasset sector, not least since BTC also experienced a blow-off top after the Bitcoin futures ETF launch in 2021 and the CME futures listing in 2017. Meanwhile, ETH and other Ethereum ecosystem tokens outperformed this week on speculation over a potential Ethereum ETF approval in May. Bloomberg Intelligence analyst Eric Balchunas who predicted the approval of a Bitcoin ETF in early January, said that there is a 70% likelihood for the approval of a spot Ethereum ETF.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $1.76 trillion – slightly up $1.72 trillion last week, with bitcoin accounting for about 47.7%. Among the Top 30 cryptoassets by market cap, Ethereum Classic (ETC) outperformed, gaining about 44% over the week. The price of bitcoin (BTC) fell by 2.3% to $42,860 while the price of ether (ETH) rose by 13.8% to $2,556. The total value locked (TVL) in DeFi is sitting at roughly $56 billion, with Ethereum (excluding Layer 2s) currently accounting for about 56% of TVL. The value locked in Ethereum Layer 2s currently amounts to $22.2 billion, led by Arbitrum One with $11 billion in TVL.
This Week’s Headlines
- Statements by SEC Chairman Gary Gensler and SEC Commissioner Hester Peirce on the approval of a spot Bitcoin ETF
- SEC says the FBI is now involved in investigating false post about spot bitcoin ETF approval
- BlackRock CEO Larry Fink “sees value” in spot Ethereum ETF following successful Bitcoin ETF launch
- BlackRock and Fidelity slash fee to 0.25% for spot bitcoin ETF amid fierce competition
- Investment giant Vanguard blocks clients from buying Bitcoin ETFs
- Bitcoin futures ETF ProShares BITO reaches all-time high of over $2 billion assets
- CoinShares exercises option to acquire Valkyrie Funds following spot bitcoin ETF approval
- USDC stablecoin issuer Circle confidentially files for IPO
- Genesis Global Trading to pay $8 million in settlement after cybersecurity failings
- Sotheby’s opens bidding for curated Bitcoin Ordinals auction
Notable Deals and Fundraising
- Bitcoin Layer 2 Bitfinity raises token round at $130 million valuation
- Crypto custodian Finoa raises $15 million in strategic funding round at flat valuation of $100 million
- DeFi lending protocol Altitude raises $6.1 million to improve capital efficiency
- Pontem raises $6 million to enable Ethereum and Move-compatible apps
- Solana DeFi protocol Saros raises $3.75 million in a private round from Solana Ventures, Hashed, and others
- DeFi protocol Bracket Labs raises $2 million in a pre-seed round
- Etherscan acquires Solscan to expand blockchain data services
