A Bloomberg analyst says that the U.S. Securities and Exchange Commission (SEC) is gearing up to approve all bids for a spot market Bitcoin (BTC) exchange-traded fund (ETF). In a lengthy thread on the social media platform X, James Seyffart says that the SEC making earlier-than-expected rulings on Franklin’s bids for a BTC ETF means […]
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The U.S. Securities and Exchange Commission (SEC) is delaying its decisions on several Bitcoin (BTC) and Ethereum (ETH) exchange-traded fund (ETF) applications until next year. In new filings, the regulatory agency says that it will be delaying its decisions on applications filed by asset management firm Hashdex to create a mixed spot and futures Ethereum […]
The post US SEC Delays Decisions on Multiple Bitcoin (BTC) and Ethereum (ETH) ETF Applications appeared first on The Daily Hodl.
Earlier in the day, BlackRock registered corporate entity “iShares Ethereum Trust” in Delaware, the first hint that a filing for a spot Ethereum ETF filing was imminent.
Blackrock’s plans for a spot Ethereum exchange-traded fund (ETF) has now been confirmed, per a 19b-4 form filing submitted to the United States Securities and Exhange Commission on Nov. 9.
Nasdaq filed the 19b-4 form to securities regulator on behalf of the $9 trillion asset management firm for a proposed ETF called the "iShares Ethereum Trust."
The move signals BlackRock’s intention to expand beyond Bitcoin with its ETF aspirations.
Earlier on Nov. 9, it emerged that BlackRock registered corporate entity iShares Ethereum Trust in Delaware, the first hint that a spot Ethereum ETF filing could be imminent.
UPDATE: BlackRock #Ethereum ETF confirmed. They just submitted a 19b-4 filing with Nasdaq pic.twitter.com/pLhuhhK7jo
— James Seyffart (@JSeyff) November 9, 2023
BlackRock and other financial firms have expressed interest in cryptocurrency-backed ETFs over the last few months.
Bloomberg ETF analyst James Seyffart noted that there are at least five firms in the running to win the Securities and Exchange Commission’s approval for a spot Ethereum ETF.
Related: Ethereum futures ETFs garner lukewarm reception on first day of trading
Among them are VanEck, ARK 21Shares, Invesco, Grayscale and Hashdex.
There are 5 other live spot Eth filings that i'm aware of:@vaneck_us @ARKInvest/ @21Shares @hashdex @InvescoUS/ @galaxyhq
— James Seyffart (@JSeyff) November 9, 2023
andddd @Grayscale's filing to convert $ETHE.
In no particular order.
Ether (ETH) spiked 8.9% to $2080 on the news that BlackRock is moving forward its plans for an iShares Ethereum Trust and is up 10.1% over the last 24 hours, according to CoinGecko.
The price surge has helped ETH claw back some market dominance against Bitcoin (BTC), which has outperformed ETH in recent months.
ETH’s market dominance now sits at 17%, up 1.3% percentage points prior to the news.
BTC trading volume at CME recently eclipsed Bybit, but what does this mean for Bitcoin's price?
The Chicago Mercantile Exchange (CME) introduced its Bitcoin futures contract in December 2017. This was around the same time that Bitcoin (BTC) had reached an all-time high of $19,800, but by late 2018, the price had dropped to $3,100. Investors in cryptocurrencies quickly learned that CME derivative contracts allowed them to make bullish bets with leverage but also enabled them to bet against the price, a practice known as shorting.
Historically, the Securities and Exchange Commission has rejected Bitcoin exchange-traded fund (ETF) proposals due to concerns about manipulation on unregulated exchanges. The growing significance of CME’s Bitcoin futures market might address this issue, and recently, Hashdex has even requested a Bitcoin ETF that relies on Bitcoin's physical trades within the CME market.
Professional traders often use BTC derivatives to hedge risks. For instance, one can sell futures contracts while simultaneously buying BTC using borrowed stablecoins using margin. Other examples include selling longer-term BTC futures contracts while purchasing perpetual contracts, which could help a trader benefit from price discrepancies over time.
CME has played a key role in the Bitcoin futures market since 2020, amassing an impressive $5.45 billion in open interest by October 2021. However, over the following years, the gap widened, as CME's Bitcoin futures market reached $1.2 billion in January 2023, trailing behind exchanges like Binance, OKX, Bybit and Bitget.
More recently, the Bitcoin price dropped by 12.8% between Aug. 16 and Aug. 17, leading to a $2.4 billion reduction in the aggregate futures open interest. Notably, CME was the only exchange unaffected in terms of open interest. As a result, CME became the second-largest trading platform on Aug. 17, with $2.24 billion in BTC open interest, according to data from CoinGlass.
It’s worth noting that CME exclusively offers monthly contracts, which differ from perpetual or inverse swap contracts, the most traded products on crypto exchanges. Additionally, CME contracts are always cash-settled, while crypto exchanges provide contracts based on both stablecoins and BTC. These distinctions contribute to the difference in open interest between CME and crypto exchanges, but there's more to the story.
Aside from differences in contract settlement and the absence of perpetual contracts, the trading of Bitcoin futures on the CME diverges significantly from most crypto exchanges in terms of both volume and pricing dynamics. The CME records an average daily volume of $1.85 billion, which falls short of its $2.24 billion open interest.
In contrast, Binance’s BTC futures see a daily volume nearing $10 billion, three times greater than its open interest. A comparable pattern is observed at the OKX exchange, where daily trading in BTC futures reaches about $4 billion, surpassing its $1.4 billion open interest. This variance can be attributed partially to CME’s higher margin requirement and the fee-free trading environment for market makers on crypto exchanges. Additionally, CME’s trading hours are constrained, with a halt from 4:00 pm Central Time to 5:00 pm and a full closure on Saturdays.
However, various factors contribute to price distinctions compared to other exchanges. These include shifts in demand for leverage among long and short positions, along with potential disparities in the Bitcoin index price calculation across different providers. Lastly, it’s crucial to consider the solvency risks associated with the tie-up of margin deposits (collateral) until the BTC futures contract settlement.
Related: When will it be too late to invest in Bitcoin?
Notably, CME Bitcoin futures have traded at approximately $280 higher than those on Binance for the same December 2023 expiration. Ultimately, the day-to-day pricing of BTC futures contracts hinges on several variables. While CME’s trading volumes are trending upward, its pricing mechanism might not flawlessly mirror Bitcoin’s price movements on crypto exchanges.
Given the intricate interplay of variables impacting its pricing and trading dynamics, it fails to provide enhanced price guidance to BTC investors.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Hashdex has promised to invest a portion of the assets managed by its new BITH11 ETF into carbon credits and green tech.
BITH11, a new exchange-traded fund (ETF) launched in Brazil by crypto-focused alternative investment firm Hashdex Asset Management, claims to be the country’s first “green” Bitcoin ETF.
The fund plans to neutralize its associated carbon emissions through purchasing carbon credits. To meet the ETF’s objectives, Hashdex has partnered with Germany’s Crypto Carbon Ratings Institute (CCRI) — which will produce annual reports estimating the energy consumption and carbon emissions underpinning the creation of BTC acquired by the fund.
The ETF is currently aiming to invest 0.15% of its liquid assets into carbon credits and eco-friendly technologies every year. The fund was launched on the B3 Brazilian Stock Exchange late last week under the ticker BITH11.
According to a rough translation, Rogerio Santana, relationship director at the São Paulo-based B3 exchange, stated:
“The new ETF offers investors exposure to variations in the world's main digital asset, with all its growth potential and value reserve, in a regulated, secure manner and under sustainability goals,”
Hashdex is an issuer of regulated crypto investment funds, having launched its first crypto-focused ETF, HASH11, in April of this year. Over the past month, HASH11 has gained 33% according to Bloomberg.
In addition to HASH11 and BITH11, Hashdex also offers a weighted Nasdaq Crypto Index (NCI) fund tracking BTC, and its Bitcoin Risk Parity Gold Fund.
Related: SkyBridge buys 38,500 tons of carbon offsets
Green crypto funds have grown in popularity this year as concerns over the fossil fuel-based energy consumption of crypto mining operations entered mainstream discourse.
In May, Canadian Bitcoin ETF issuer, Ninepoint, announced plans to offset the carbon footprint of its BTC fund, partnering with carbon offsetting service provider CarbonX.
The following month, crypto-focused hedge fund manager One River Digital reported a surge in demand for carbon-neutral Bitcoin investment products.
On August 3, Global investment firm SkyBridge Capital announced that it had partnered with carbon credit provider MOSS Earth to purchase tokens representing 38,436 tons of carbon offsets.
An asset management firm with nearly $160 billion in assets under management, Victory Capital, has announced that it is entering the cryptocurrency market. The firm has established exclusive agreements with Nasdaq and asset manager Hashdex. Asset Management Firm Entering Crypto Market Victory Capital Holdings Inc. (Nasdaq: VCTR) unveiled its plans to enter the cryptocurrency market […]