SEC considers spot Ether ETF application from ProShares

June 10, 2024 Coin Telegraph

The commission approved 19b-4 filings from eight asset managers in May, but they won’t begin trading on U.S. exchanges until the SEC signs off on the S-1 registration statements.

The United States Securities and Exchange Commission (SEC) has added a spot Ether (ETH) exchange-traded fund application from asset manager ProShares roughly three weeks after approving eight of the investment vehicles.

In a June 10 filing, the SEC said the New York Stock Exchange (NYSE) Arca had proposed a rule change allowing it to list and trade shares of the ProShares Ethereum ETF. The commission said it was soliciting public comments on the ETF application for 21 days after publication in the Federal Register, giving the SEC 45 days to approve, disapprove, or extend the timeline for its decision.

On May 23, the SEC officially approved 19b-4 filings from eight asset management firms that applied to list and trade spot Ether ETFs on U.S. exchanges for the first time. Final approval requires the SEC to sign off on S-1 registration statements for the spot Ether ETFs before they can officially begin trading — a process that could take months, but some experts expect to go through sometime in July.

Investment Giant BlackRock Registers Ethereum Trust in Delaware As ETH Surpasses $2,000

November 9, 2023 The Daily Hodl

First Bitcoin Futures ETF Registers $1,700,000,000 in Trading Volume Last Week: Bloomberg Analyst

October 30, 2023 The Daily Hodl

Bitcoin price drops its early week gains — Here is why

October 3, 2023 Coin Telegraph

CME

Bitcoin price gave up its recent gains as concerning signals from the US economy continue to weigh on investor sentiment.

Bitcoin (BTC) price gained 6% from Oct. 1 to Oct. 2 but after failing to break the $28,500 resistance, the price dropped by 4.5% on the same day. This decline happened because of the disappointing performance of Ether (ETH) futures exchange-traded funds (ETFs) that were launched on Oct. 2 and concerns about an upcoming economic downturn.

*Bitcoin price index, USD. Source: TradingView*

This correction in Bitcoin's price on Oct. 3 marks 47 days since Bitcoin last closed above $28,000 and has led to the liquidation of $22 million worth of long leverage futures contracts. But before discussing the events affecting Bitcoin and the cryptocurrency market, let's attempt to understand how the traditional finance industry has affected investor confidence.

The overheated US economy could lead to more Fed action

Investors have heightened their expectations of further contractionary measures by the U.S. Federal Reserve following the release of the latest U.S. labor market data on Oct. 3, revealing that there were 9.6 million job openings at the end of August, up from 8.9 million in July.

Fed Chair Jerome Powell had indicated during a speech at the Jackson Hole Economic Symposium in August that "evidence suggesting that tightness in the labor market is no longer easing could necessitate a monetary policy response."

Consequently, traders are now pricing in a 30% chance that the Fed will raise rates at their November meeting, compared to 16% in the previous week, according to the CME's FedWatch tool.

The Ether futures ETFs launch falls short

On Oct. 2, the market welcomed nine new ETF products expressly designed to mirror the performance of futures contracts linked to Ether. However, these products saw trading volumes of under $2 million during the first trading day, as of midday Eastern Time. Senior ETF analyst at Bloomberg, Eric Balchunas, noted that the trading volumes fell short of expectations.

*Ethereum futures-based ETF volumes on Oct. 2, USD. Source: K33 Research / @VetleLunde*

On the debut day, the trading volume for Ether ETFs significantly lagged behind the remarkable $1 billion launch of the ProShares Bitcoin Strategy ETF. It's worth noting that the Bitcoin futures-linked ETF was introduced in October 2021 during a flourishing cryptocurrency market.

This occurrence may have dampened investors' outlook on the potential inflow after an eventual Bitcoin spot ETF. Still, there remains uncertainty surrounding the probability and timing of these approvals by the U.S. Securities and Exchange Commission (SEC).

Regulatory pressure mounts as Binance faces a class-action lawsuit

On Oct. 2, a class-action lawsuit was filed against Binance.US and its CEO Changpeng "CZ" Zhao in the District Court of Northern California. The lawsuit alleges unfair competition aimed at monopolizing the cryptocurrency market by harming its competitor, the now-defunct exchange FTX.

The plaintiffs claim that CZ's statements on social media were false and misleading, particularly since Binance had previously sold its FTT token holdings before the announcement on Nov. 6, 2022. The lawsuit asserts that CZ's intention was to drive down the price of the FTT token.

The criminal case against Sam Bankman-Fried will begin on Oct. 4 in New York. Despite CZ's denial of unfair competition allegations, speculation within the crypto community continues to circulate regarding this matter.

BTC’s correlation to traditional markets seems higher than anticipated

Bitcoin's price decline on Oct. 3 appears to reflect concerns about an impending economic downturn and the potential Federal Reserve's monetary policy response. Furthermore, it demonstrated how closely cryptocurrency markets are tied to macroeconomic factors.

Exaggerated expectations for the cryptocurrency ETFs also signal that the $28,000 level might not be the consensus for investors given the regulatory pressures and legal challenges, such as the class-action lawsuit against Binance, which underscore the ongoing risks in the space.

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.

Flood of Ethereum Futures Exchange-Traded Funds Could Launch on Monday, According to Bloomberg ETF Analyst

September 30, 2023 The Daily Hodl

U.S. SEC To Approve Ethereum Futures ETF Nearly Two Years After Authorizing Similar Bitcoin Product: Report

August 18, 2023 The Daily Hodl

Bitcoin ETF fever returns: ‘Biggest’ inflow to ProShares’ BITO in a year

June 26, 2023 Coin Telegraph

BITO

ProShares’ BITO Bitcoin ETF saw a weekly inflow of $65 million as institutional investors have seemingly regained their mojo for Bitcoin futures.

Bitcoin (BTC) exchange-traded fund (ETF) fervor is back with a raft of new applications and an increase in capital inflows from institutional investors.

On June 26, a surge of inflows to the ProShares Bitcoin Strategy ETF (BITO) — a Bitcoin futures fund — was observed by Bloomberg senior ETF analyst Eric Balchunas.

The fund had its largest weekly inflow in a year at $65.3 million with its assets topping $1 billion.

BITO was the first BTC-linked ETF in the United States and is one of the most popular among institutional investors.

Balchunas claimed BITO “pretty much has tracked Bitcoin perfectly,” lagging spot prices by 1.05% annually and has a fee of 0.95%.

The Bitcoin Futures ETF $BITO had its biggest weekly inflow in a year as assets top $1b again. It also traded half a billion in shares on Friday, which it's only done about 5 times before via @SirYappityyapp pic.twitter.com/Xrq0lUaaTO
— Eric Balchunas (@EricBalchunas) June 25, 2023

The BITO fund has made a 59.6% gain since the start of 2023 according to ProShares. There’s been an uptick in Bitcoin derivatives interest across the board since BlackRock filed for its own Bitcoin ETF on June 15.

According to the Deribit crypto options exchange, Bitcoin futures open interest (OI) has surged since last week. It is currently $319 million as of June 25, up around 30% from the same period last week.

OI is a measure of the total number of outstanding futures contracts that have not been settled.

*BTC futures OI over the past month. Source:* *Deribit*

The resurgence in ETF trading and the resultant BTC price pump has also been good news for the world’s largest crypto asset manager, Grayscale. The Grayscale Bitcoin Trust (GBTC), which has been trading at a massive discount to spot BTC prices for months, is heading in the right direction as that gap diminishes.

According to Coinglass, the Grayscale premium, also known as its discount, is -31.2%. It fell as low as -49% in December.

It remains unclear if the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF, but the race is now on as a new wave of filings has followed BlackRock’s.

WisdomTree, for the third time, filed with the SEC to create a spot Bitcoin ETF, just hours later Invesco renewed its application for a similar product.

On June 25, ETF Store President Nate Geraci tweeted his list of ETF issuers that he “would keep an eye on” as he believes they will file or refile for a spot Bitcoin ETF based on past filings. Geraci named First Trust, VanEck, Global X, Fidelity, and what he called the “dark horse,” Schwab.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Institutions ‘extremely interested’ in crypto ETFs, but buying has cooled: Survey

April 4, 2023 Coin Telegraph

asset manager

Almost half of surveyed fund managers plan to “add” crypto ETFs to their portfolio in 2023, while only a quarter will be increasing digital asset exposures.

Institutional interest in cryptocurrencies hasn’t budged despite the market being down 60% from the all-time highs (ATH), as a majority of asset managers stated they’re “extremely interested” in crypto themed-Exchange Traded Funds (ETFs).

On April 3, financial services firm Brown Brothers Harriman (BBH) released its 2023 Global ETF Investor Survey which polled 325 institutional investors, financial advisors, and fund managers from the United States, United Kingdom, Europe and China.

It found nearly three-quarters of institutional investors claimed they’re “extremely” or “very” interested in crypto ETFs, but the effects of crypto winter have chilled their appetite as only a quarter said they’re expecting to increase allocation to crypto ETFs over the next 12 months, a 6% fall from 2022.

The findings of our 2023 Global ETF Investor survey are out. Explore the report to learn about the shifts ETF investors are making in the face of macro and market changes, and what the last decade in ETFs can tell us about the next ten years. https://t.co/KeTeAUfz8G #ETFs pic.twitter.com/ueDlwvynNQ
— Brown Brothers Harriman (@bbh) April 3, 2023

While crypto-themed ETFs fell down the priority list for some — nearly half still plan to “add” crypto ETFs to their portfolios this year to diversify investments.

*58% of fund managers in China are looking to add crypto ETFs to their portfolios, followed by the U.S. (55%) and Europe (29%). Source:* *BBH*

BBH explained the rise in interest for crypto ETFs is partly due to fund managers learning to stomach the inevitable volatilities in the crypto market:

“As investors adapt to volatility, they are diversifying their portfolios and adding more innovative products. Even with a tumultuous year in crypto, interest hasn’t cooled entirely.”

BBH believes a clearer crypto regulatory framework will further increase the demand for related ETF exposure as it will provide more “comfort” when doing business with the crypto sector:

“Initiatives such as the draft regulation from the EU’s Markets in Crypto Assets proposal is expected to significantly ‘derisk’ investments in crypto assets for asset managers and provide an ‘additional layer of comfort’ for fund managers to engage with crypto exchange.”

More than 40% of the respondents claimed to manage assets worth more than $1 billion and over half said to have more than a quarter of their portfolio invested in ETFs.

Among the largest crypto ETFs are ProShares Bitcoin Strategy (BITO) available on the New York Stock Exchange (NYSE) and the Bitwise 10 Crypto Index Fund (BITW). BITO was reportedly the first bitcoin-linked ETF launched in the United States, while BITW tracks the top 10 largest cryptocurrencies by market cap.

Grayscale’s Bitcoin Trust (GBTC), while not an ETF, is one of the largest digital asset investment products by market cap traded on a stock exchange with a current value of $11 billion according to Google Finance.

Not all crypto ETFs have fared well as the effects of the crypto market winter saw two Australian crypto ETFs — BetaShares Crypto Innovators ETF (CRYP) and Cosmos Global Digital Miners Access ETF (DIGA) — take the title as the worst-performing ETFs in the country.

It resulted in DIGA, along with Cosmos Purpose Ethereum Access ETF (CPET) and Cosmos Purpose Bitcoin Access ETF (CBTC) being delisted at the end of 2022.

Magazine: Crypto winter can take a toll on hodlers’ mental health

Crypto stocks surge: Coinbase up 69%, MicroStrategy up 74% since lows

January 18, 2023 Coin Telegraph

Bitfarms

Crypto-related stocks, ETFs and tokens have all surged in price so far in 2023 despite experts expecting the Federal Reserve to continue hiking interest rates.

The share price of cryptocurrency exchange Coinbase has surged by 69% since its all time lows and other crypto-related stocks including business intelligence firm MicroStrategy have recorded similar jumps with green candles all around since the start of 2023.

The share price of Coinbase fell as low as $31.95 on Jan. 6, before shooting up to $54.14 by the close of trading on Jan. 17.

*Coinbase’s share price for the last month. Source: Yahoo Finance*

The rising share price will likely be accompanied by a huge sigh of relief for Coinbase executives after a challenging 2022 saw it cut 20% of its workforce and decide to wind down its Japanese operations. Despite the surge, COIN remains more than 84% below its all time high.

Other crypto-related stocks such as MicroStrategy and digital payments company Block Inc. have also posted strong gains in the new year.

MicroStrategy's share price has increased to nearly $236 from a low of just over $135 on Dec. 29 — representing an increase of over 74% — while Jack Dorsey’s Block has seen its share price increase by a muted but still respectable 27%, after rebounding from a low of under $59 on Dec. 28 to over $75.

The rebound has been even more dramatic for crypto mining stocks. Bitfarms and Marathon Digital Holdings recorded surges of 140% and 120% respectively throughout the first two weeks of the year.

Crypto exchange-traded funds (ETFs) also rebounded to a lesser degree with Valkyrie Bitcoin Miners ETF (WGMI) more than doubling its price from a low of just over $4 on Dec. 28 to over $8.

The ProShares Bitcoin Strategy ETF (BITO) jumped from over $10 on Dec. 28 to a current price of around $13 — increasing by just under a third.

Even Grayscale Bitcoin Trust has managed to regain some of its 2022 losses, after increasing from a low of $7.76 on Dec. 28 to a current price of $11.72, a 51% increase.

While the trust is designed to mirror the price of Bitcoin (BTC) it often trades at a discount or premium to the value of its underlying holdings and is now sitting at a discount of just over 36% after having traded at over a 45% discount on Dec. 28.

Some pundits believe Bitcoin in particular has skyrocketed on the back of the positive inflation figures from the United States released on Jan. 12 — having increased in price by over 17% since then — but it is interesting to note that Dec. 28 seemed to represent a market bottom across many cryptocurrencies and stocks.

Total #crypto market cap is back over 1 trillion dollars!!! pic.twitter.com/wS4N9qjA4G
— Lark Davis (@TheCryptoLark) January 17, 2023

While the recent surge in crypto-related stocks is bound to be a huge relief to those who have invested in them, it is worth noting that many of these companies have a long way to go to return to thier all-time highs, as highlighted by a Jan. 10 tweet from financial advisor Genevieve Roch-Decter.

Crypto stocks over the last year:

Voyager -99.7%
Silvergate -90.8%
Marathon Digital -83.1%
Coinbase -82.3%
HIVE Blockchain -81.3%
MicroStrategy -63.9%
— Genevieve Roch-Decter, CFA (@GRDecter) January 10, 2023

World’s first short Bitcoin ETF sees exposure explode 300% in days

July 6, 2022 Coin Telegraph

Bitcoin

Since launching last month, the ProShares Short Bitcoin Strategy ETF (BITI) has eclipsed others in inflows.

Bitcoin (BTC) remains a popular institutional investment target in July, but the money is not betting on a bright future.

According to data from research firm Arcane Research published July 6, institutional flows focused on products offering exposure to shorting BTC in the first week of the month.

Shorting Bitcoin is the name of the game

Since launching in the United States in late June, the ProShares Short Bitcoin Strategy ETF (BITI), the first exchange-traded fund (ETF) to be "short" BTC, has proved a hit.

That trend has only accelerated in July, with short exposure jumping over 300% in days, data confirms.

"BITI, the first inverse BTC ETF, grew further last week," Arcane summarized in Twitter comments.

"After becoming the second-largest bitcoin-related BTC ETF in the U.S. after only four days of trading, the net short exposure has grown further and increased by more than 300% last week."

*ProShares Short Bitcoin Strategy ETF (BITI) exposure chart. Source: Arcane Research/ Twitter*

The timing for BITI in the U.S. is conspicuous in itself, coming as BTC/USD plumbed multi-year lows of $17,600.

As Cointelegraph reported, expectations among analysts remain skewed to the downside, and the BITI inflows appear to confirm that institutional sentiment is likewise.

Separate data published by digital asset investment firm CoinShares on July 4, meanwhile, put weekly inflows into Short BTC products at $51 million — easily the majority of the week's total of $64 million.

While long BTC investments were just $20 million, CoinShares nonetheless highlighted persisting demand for such products despite shorts stealing the limelight.

"This highlights investors are adding to long positions at current prices, with the inflows into short-Bitcoin possibly due to first-time accessibility in the US rather than renewed negative sentiment," it wrote.

Business (or lack of) as usual for GBTC

Testing times, meanwhile, remain for the stalwart institutional Bitcoin investment vehicle, the Grayscale Bitcoin Trust (GBTC).

After U.S. regulators rejected Grayscale's application to convert the Trust to a Bitcoin spot ETF, the firm began legal action, a sign of the frustration facing an industry dealing with both regulatory scrutiny and declining asset prices.

The so-called GBTC premium, the difference between Bitcoin spot price and shares of GBTC, has been negative for over a year, at several points becoming a more than 30% discount.

*GBTC premium vs. asset holdings vs. BTC/USD chart. Source: Coinglass*

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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