Bitcoin remains resilient to the weakness in equities which are battered by surging oil prices and a hawkish Fed this week. While major stock indexes registered drops of 3% to 5% for the month, BTC’s correlation with equities continues to diverge despite the absence of ETF tailwinds. The SEC seems in no hurry to approve or reject a spot Bitcoin ETF despite pressure from US lawmakers. The agency came out early this week and delayed all applications with an October deadline. In contrast, the launch of futures-based Ether ETFs seems imminent. According to Bloomberg analysts, the SEC could accelerate applications from up to six different issuers ahead of a potential US government shutdown on October 1st. It remains to be seen whether the ETF launch will also boost the price of ether which continues to hit new lows vs. BTC – a trend that began in September 2022. In equities, the S&P500 gave up earlier gains today and looks set to end the week lower despite a drop in the PCE index – the Fed’s preferred inflation indicator. The reading came in at the lowest level since September 2021, fueling hopes that the Fed will not hike in November. Elsewhere, long-term rates hit fresh highs this week, with the 10-year Treasury yields rising to 4.61%, their highest level since September 2007. As a result, the US housing market remains under pressure as mortgage rates rose to their highest level since December 2000.
The US SEC once again delayed its decision on four prominent spot Bitcoin ETF filings currently under consideration, including BlackRock, Bitwise, Invesco Galaxy Digital and Valkyrie. Originally, the deadline for making a decision for these ETF applications was scheduled between October 16 to 19. On Tuesday, the securities regulator already extended its deadline to approve the Ark/21Shares Bitcoin ETF to January 10. Given the looming government shutdown this weekend, the SEC expedited its announcement. This marks the SEC’s second extension within one month for the funds in question.
Earlier this week, a group of Republican and Democratic lawmakers urged SEC Chair Gensler in a letter to approve the listing of a spot bitcoin ETF arguing a regulated ETF would increase investor protection. The authors of the letter made reference to a court ruling in August, stating that “the SEC violated the Administrative Procedures Act when it denied Grayscale’s application to convert Grayscale Bitcoin Trust (GBTC) to a spot Bitcoin ETP.” Last month, GBTC issuer Grayscale Investments won a case against the SEC where a US appeals court ruled that the SEC must re-evaluate its approval of a bitcoin ETF.
Meanwhile, Invesco Galaxy joined Ark Invest/21 shares and VanEck in filing for a spot Ether ETF which would also hold the cryptoasset directly. While spot ETFs remain in limbo, the launch of futures-based ETH ETFs is imminent. ProShares is likely to field three Ether ETFs on Monday, joining futures equivalents by by Bitwise (two ETFs) and VanEck (one ETF), among others. Bloomberg analysts Eric Balchunas and James Seyffart expect that up to 7 futures-based ether ETFs could launch on Monday.
Elsewhere, MicroStrategy continues to accumulate bitcoin, announcing that it purchased an additional 5,445 BTC for approximately $147 million. The company now holds a total of around 158,245 BTC worth roughly $4.1 billion at current prices.
Market Overview
The global cryptoasset market capitalization currently amounts to roughly $1.11 trillion – compared with $1.10 trillion last week, with bitcoin accounting for more than 47%. Among the Top 30 cryptoassets by market cap, Chainlink (LINK) outperformed, gaining about 17% over the week. The price of bitcoin (BTC) rose by 1.1% to $26,885 and the price of ether (ETH) increased by 4.6% to $1,664. The total value locked (TVL) in DeFi is sitting at roughly $38.5 billion, with Ethereum (excluding Layer 2s) currently accounting for about 55% of TVL.
This Week’s Headlines
- Coinbase gains regulatory approval to launch perpetual futures trading for retail users outside US
- SEC Chair Gary Gensler takes heat from US lawmakers over the agency’s approach to regulating cryptoassets during a House hearing
- Valkyrie and VanEck prepare to offer futures-based ether ETFs
- Crypto exchange Kraken plans to allow users to trading shares listed in the US and UK, Bloomberg reports, also expands to Ireland and Spain
- Binance fully exits Russia amid legal risks, sells business to CommEX
- Tension rises between Coinbase and SEC over Celsius bankruptcy plan
- The Bank for International Settlements (BIS) concludes CBDC pilot, says elements of DeFi could form “new generation” of market infrastructure
- Hong Kong to issue guidance on tokenizing stocks “in near term”
- Three Arrows Capital Co-Founder Su Zhu apprehended in Singapore, Bloomberg reports
- Binance halts EUR trading for Paysafe users as banking partner withdraws services
- Arbitrum DAO treasury boosted by $57 million in unclaimed airdrop tokens
- Walmart to sell Pudgy Penguins NFTs toyline in 2,000 stores
Notable Deals and Fundraising
- Ripple decides against the outright acquisition of Fortress Trust, according to CEO Brad Garlinghouse
- Web3 startup IYK raises $16.8 million in a seed round led by a16z
- Ethereum explorer startup Rated Labs raises $12.9 million to expand to other blockchains
- Fireblocks acquires tokenization firm BlockFold for $10 million
- DeFi portfolio management startup Bril Finance raises $3 million in seed funding
- AnchorWatch raises $3 million for Bitcoin custody and insurance platform
- Ethereum infrastructure startup Pimlico raises $1.6 million pre-seed round
- Knowledge graph protocol 0xScope secures investment from OKX Ventures
- Alchemy acquires subgraph startup Satsuma
- Aptos and Thala launch $1 million fund to foster new DeFi protocols
