Bitcoin hit $30,000 for the first time since August this week against the backdrop of regulatory tailwinds and increasing optimism regarding the SEC greenlighting a spot Bitcoin ETF. The cryptoasset also shook off a false rumor of a BlackRock ETF approval on Monday which led to increased volatility and more than $180 million in liquidations. In contrast, US equities ended the week lower amid ongoing geopolitical risks, rising rates and mixed earnings reports. The S&P 500 is now only up 11.5% YTD after shedding almost 8% since its 2023 high at the end of July. Meanwhile, the selloff in longer-dated US bonds continues, with the 10-year US Treasury yield briefly hitting 5% for the first time since 2007. On Thursday, Fed Chair Jerome Powell signaled the US central bank could hold rates steady at its next policy meeting, but he also warned that inflation was still too high and that more interest rate hikes are still possible if inflation remains elevated.
A false rumor that BlackRock’s iShares spot Bitcoin ETF was approved by the SEC triggered a brief BTC rally on Monday. The news was first reported by crypto news outlet Cointelegraph on X (formerly Twitter). The initial tweet was later edited and then deleted shortly after 10AM ET (4PM CET). Cointelegraph later apologized for the false information saying that its social media team posted the message on the social media platform X without prior editorial approval. While other well-informed journalists such as Bloomberg’s James Seyffart remained skeptical in the absence of other sources confirming the news, the price of Bitcoin immediately shot up to $30,000 from below $28,000 amid the news but gave up most gains within less than 20 minutes. The ensuing volatility was particularly frothy for derivatives traders. According to data from Coinglass as reported by Blockworks, $105 million in positions were liquidated in less than an hour, including $73 million in shorts and $32 million in longs. Overall, 40,000 traders have been liquidated for nearly $180 million. The SEC couldn’t resist taking a jab at the gullible crypto community and commented on X: “Careful what you read on the internet. The best source of information about the SEC is the SEC.”
Given the fake news, BlackRock felt compelled to release a press statement which clarified that “BlackRock’s iShares spot Bitcoin Application is still being reviewed by the SEC”. More importantly, BlackRock CEO Larry Fink appeared on Fox Business saying that a rally in the price of bitcoin triggered by the false rumors about the approval of a spot ETF served as an example of the “pent up interest in crypto.” Fink said that “I think the [bitcoin] rally today is about a flight to quality, with all the issues around the Israeli war now, global terrorism. I think there’s more people running into a flight to quality, whether that is in Treasuries, gold or crypto, depending on how you think of it. And I believe crypto will play that type of role, as a flight to quality.” Many investors viewed the incident and its implication on price as a kind of trial run for the day when a spot Bitcoin ETF gets approved which is why BTC continued to edge higher this later this week, eventually reclaiming the $30,000 level on Friday. The day on which an ETF is approved might not be too far in the future. When asked about the ongoing review process for a Bitcoin ETF, SEC Chair Gensler said on Wednesday that “The staff is doing work on those multiple filings”. Many crypto market participants such as Galaxy’s Mike Novogratz or ARK’s Cathie Wood think that it’s not a matter of if but when, suggestion that the SEC is already showing a change in behavior toward the current applications.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $1.18 trillion – compared with $1.09 trillion last week, with bitcoin accounting for almost 50%. Among the Top 30 cryptoassets by market cap, Solana (SOL) outperformed, gaining about 32% over the week. The price of bitcoin (BTC) rose by 11.1% to $29,915 while the price of ether (ETH) increased by 4.8% to $1,628. The total value locked (TVL) in DeFi is sitting at roughly $37 billion, with Ethereum (excluding Layer 2s) currently accounting for about 54% of TVL.
This Week’s Headlines
- SEC moves to dismiss charges against Ripple’s CEO Garlinghouse and former executive Larsen
- US Treasury plans to designate international crypto mixers as money-laundering hubs, WSJ reports
- Coinbase picks Ireland for EU hub with MiCA regulation set to open European market
- JPMorgan expects spot bitcoin ETF approvals to come “within months”
- BlackRock, Fidelity, Grayscale and others amend their spot Bitcoin ETF SEC filings
- Tether will publish USDT stablecoin reserve data in real time in 2024
- Lightning Labs teases protocol for minting real-world assets, stablecoins on Bitcoin
- Reddit plans to sunset its blockchain-based reward service Community Points
- Ferrari to start accepting crypto payments in US, Europe to follow
Notable Deals and Fundraising
- DTCC acquires blockchain technology firm Securrency to “fast-track” DeFi efforts
- Custody firm BitGo acquires HeightZero, a crypto wealth management platform
- Derivatives DEX SynFutures raises $22 million in a Series B round
- DeFi liquidity protocol Elixir raises $7.5 million in a Series A funding round at a $100 million valuation
- EOS-based crypto game Upland raises $7 million from EOS Network Ventures, Animoca and others
- Crypto data firm Coin Metrics raises $6.7 million from new investor
- Solana-based multisig protocol Squads raises $5.7 million in a strategic round
- opBNB-based AI platform MyShell raises $5.6 million at $57 million valuation
- Bitcoin metaverse token pre-sale from “Life Beyond” team raises $3.5 million
- Web3-powered file management app Fileverse raises $1.5 million to offer alternative to Google
- Crypto startup Ryder raises $1.2 million to build wallets with no seed phrase
