Macauley Peterson

<div id="highlights-block_623df904d2a90" class="highlights">
 <ul>
 <li>Pavel Zavalny, chair of Russia’s Duma committee on energy, said Russia was willing to consider bitcoin for payment of Russian fossil fuels</li>
 <li>Several major digital assets are at technical resistance levels</li>
 </ul>
 
</div>



Crypto markets led by bitcoin have been in a strong short-term uptrend this week, but several of the largest assets by market cap ran into an area of major resistance on Friday, bounded by the confluence of their 200-day exponential moving average price and previous range highs.



The Bitcoin CME Futures are up about 15% since the start of the week, at a level not seen since mid-February. If bitcoin ends the week above $43,000, it will be the first time since the end of September.



Renewed institutional interest is providing a tailwind, according to Noelle Acheson, Head of Market Insights at Genesis.



<blockquote class="wp-block-quote">“Just this week alone, we had statements from <a href="https://cms.blockworks.co/blackrock-ceo-ukraine-war-could-speed-digital-currency-adoption/" target="_blank" rel="noreferrer noopener">BlackRock</a>, <a href="https://cms.blockworks.co/goldman-sachs-makes-milestone-crypto-trade-with-galaxy-digital/" target="_blank" rel="noreferrer noopener">Goldman Sachs</a>, Bridgewater, <a href="https://cms.blockworks.co/financial-firm-cowen-unveils-digital-assets-unit/" target="_blank" rel="noreferrer noopener">Cowen</a> and Virtu about crypto services and/or investments,” Acheson told Blockworks.</blockquote>



Acheson also points to the <a href="https://cms.blockworks.co/?s=funding+roundup" target="_blank" rel="noreferrer noopener">steady stream</a> of large fundraises in the crypto space, as well as an <a href="https://cms.blockworks.co/?s=hiring" target="_blank" rel="noreferrer noopener">influx of new talent</a>, including from traditional Wall Street firms.



Bitcoin has been oscillating between about $37,000 and $45,000 for the past two months, with long-term declining volatility that, like a tightly coiled spring, typically precipitates large price swings. On the five-day timeframe, bitcoin has not seen volatility this low since October 2020.



<div class="wp-block-image"><figure class="aligncenter"><img decoding="async" src="https://lh3.googleusercontent.com/-MURfQ1mrLipDqhYSQ5IgU56pJmO84QxIlPug7hLHoJ27iSOYF0aO1umxU5sgpwKMtRwbEavmoisWuVmf3qFrjhdJSR7KwNBWxVfmaSm3KSSdC-JyRX0NRcQTGxmTztWoANHByL1" alt=""/><figcaption>Bollinger Band Width Percentile, a volatility-based indicator, 5 day time frame; Source: TradingView</figcaption></figure></div>



Both bitcoin and ether were bouncing off their daily 200-EMA in midday Friday trading.



<div class="wp-block-image"><figure class="aligncenter"><img decoding="async" src="https://lh6.googleusercontent.com/nLtIoYwyy-4zcCPjHL284soU-0X4nNRQXBfS629zwZfmchNTxJMu_rf3HUoQ5hwAtlAixfkO-40rAPOV0TsqWiEaRX1qrFmKlYT94fpjy1EwMNivAGls-Q1qQGQW3kB2jaLGUSO4" alt=""/><figcaption>The ETHUSD daily chart on the Coinbase exchange, with 200-EMA (blue line); Source: TradingView</figcaption></figure></div>



<h3 class="wp-block-heading">An uptick in bitcoin interest</h3>



Bitcoin’s global open interest has reached <a href="https://app.krowntrading.net/desk/cryptos/dashboard" target="_blank" rel="noreferrer noopener">upwards of $13.5 billion</a> across all exchanges for the first time since the start of the year.



“In part, this uptick in interest is down to bitcoin’s resilience and liquidity. A large part of it, though, is also driven by the growing attention on BTC’s role on the global stage as a result not just of the war in Europe but also the extraordinary monetary policy framework central banks around the world are trying to navigate,” Acheson said.



The war in Ukraine has become a fundamental driver of price action for another reason, Kevin Kang at BKCoin Capital, told Blockworks.



<blockquote class="wp-block-quote">“Russia’s chairman of the Energy Committee [in the State Duma], Pavel Zavalny, showed his willingness to accept bitcoin as payment for energy exports,” Kang said.</blockquote>



Zavalny’s comments came in a <a href="http://pressmia.ru/pressclub/20220324/953580633.html">video interview with RIA Novosti</a>, a Russian state-owned television station earlier this week, which were widely circulated on Twitter and picked up by Western media including <a href="https://www.cnbc.com/2022/03/24/russia-might-take-bitcoin-as-payment-for-oil-and-gas-as-sanctions-rise.html">CNBC</a> and the <a href="https://www.bbc.com/news/business-60870100">BBC</a>.



There is no indication that bitcoin is actually being used in this manner, and Jerry Brito, Executive director at CoinCenter, doubts their significance, <a href="https://twitter.com/jerrybrito/status/1507344116698554368">noting on Twitter</a>, “the reference to Bitcoin was clearly a throwaway line.”



Kang also pointed to favorable news regarding <a href="https://cms.blockworks.co/exxon-mobil-powering-bitcoin-mining-pilot-using-excess-natural-gas-report/" target="_blank" rel="noreferrer noopener">bitcoin mining by major energy companies</a>.



“Exxon [is] using excess gas to mine bitcoin. That is big, as Exxon could lead other energy producers to do the same,” Kang said.



Morgan Chittum provided additional reporting for this story.



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Bitcoin Presses Range Highs Amid Russian Gas Payment Speculation

Morgan Chittum

<div id="highlights-block_6202cca5fc708" class="highlights">
 <ul>
 <li>Bitcoin hit a three-month low of $33,708 Jan. 24, according to Messari</li>
 <li>OpenSea notched a record-high single-day trading volume last month of $261 million, according to Dune Analytics</li>
 </ul>
 
</div>





NFTs missed the memo that crypto markets were due for the doldrums to start in 2022.



Stephen Young, founder of NFT (non-fungible token) marketplace NFTfi, told Blockworks that typically people believe that “everything in crypto grinds to a halt” when markets dive.



But NFTs are now about “more than just financials,” Young said, adding that the digital collectibles are no longer tied to fluctuations in the price of ether.



Trading volumes for blue-chip NFT collections have remained steady, including <a href="https://cms.blockworks.co/bored-apes-dao-mulls-closing/" target="_blank" rel="noreferrer noopener">Bored Ape Yacht Club</a>, <a href="https://cms.blockworks.co/sothebys-set-to-auction-off-104-cryptopunks-valued-at-20-to-30m/" target="_blank" rel="noreferrer noopener">CryptoPunks</a> and Mutant Ape Yacht Club.



Noelle Acheson, head of market insights at Genesis, told Blockworks that NFTs now “move to a different investment thesis” than other cryptos.



“NFT investors are looking for more than price appreciation,” Acheson said. “The lack of tangible valuation parameters on NFTs make the investment more emotional, and that does not ebb and flow with risk sentiment.”



That is, in part, why the non-fungible market held steady as bitcoin notched a three-month low Jan. 24, trading at $33,708, according to crypto dashboard <a href="https://messari.io/" target="_blank" rel="noreferrer noopener">Messari</a>. Ethereum followed suit, hitting its cycle low the same day at $2,179.



Both cryptocurrencies are down more than 30% from all-time highs in November.


[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#5D25E5&#8243; assets=&#8221;BTC-USD,ETH-USD&#8221; start_expanded=&#8221;true&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;1mo&#8221; chart_interval=&#8221;1d&#8221;]



NFT marketplace OpenSea, meanwhile, hit record-high single-day trading volume last month at $261 million of ether, according to data from <a href="https://dune.xyz/rchen8/opensea" target="_blank" rel="noreferrer noopener">Dune Analytics</a>. The exchange eclipsed 546,000 active users last month in another historic high.



The nascent space is bound for a market correction within the next year, Young said, adding that the “money grab projects will die,” but the broader market will not.



“[NFT] prices are a bit crazy, so we are in [a] kind of bubble and frothy stage of the market,” he said. “[NFTs] are just disconnected from the bubble in the crypto markets. The [number of NFTs] will just continuously increase. At some point, there&#8217;s not going to be enough new people buying to be able to absorb that supply.”



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While Bitcoin, Ether Sank, NFT Trading Chased Record Highs

<div id="highlights-block_61bcb7d6f0ae3" class="highlights">
 <ul>
 <li>BTC fell to $45,490 in Friday trading; ETH slid to $3,700</li>
 <li>A new set of projections on the spread of the Omicron variant paints a bleak picture</li>
 </ul>
 
</div>



The S&amp;P 500 and Nasdaq indices briefly traded about 1.5% lower on Friday as market participants digest the news stemming from the latest projections for the spread of the Omicron variant of the coronavirus that causes COVID-19. Bitcoin dropped over 3.4% after markets opened in New York, but recovered back above $46,500 over the next 90 minutes, giving hope to bitcoin bulls.



Researchers at the University of Texas <a href="https://covid-19.tacc.utexas.edu/media/filer_public/20/b0/20b055db-78da-41e6-a1e4-d3afaad6167b/omicron_emergence_-_us_scenarios_-_ut.pdf">released a study</a>, Thursday, on the possible trajectory of Omicron cases. Under the “optimistic scenario” Omicron is 50% more transmissible than Delta, the variant that currently accounts for the vast majority of cases detected.



But it’s the “pessimistic scenario” that is the cause of <a href="https://www.nytimes.com/2021/12/17/us/covid-hospitals-omicron.html">alarming headlines</a> today. The projections suggest that the Omicron surge would peak in February at 1.8 times the rate seen during the January 2021 peak of hospitalizations and 1.2 times the daily deaths caused by winter infections. Total US deaths attributed to COVID-19 <a href="https://www.nytimes.com/live/2021/12/15/world/covid-omicron-vaccines">passed 800,000</a> this week.



Noelle Acheson, head of market insights at Genesis, told Blockworks that general bearish sentiment is in line with macro uncertainty thanks to the virus.



<blockquote class="wp-block-quote">“We also have some investors starting to rebalance portfolios as, with the FOMC meeting out of the way, no significant potential catalysts are expected between now and the end of the year — BTC has had a weak Q4 but is still up on the year, and we could be seeing some macro profit taking,” Acheson said.</blockquote>



She notes that BTC is still outperforming most other major tokens today, hinting at its safe haven status among digital assets.



Ether has fallen -4.4% against the US dollar in the past 24 hours, while the only crypto asset among the top 20 to trade markedly in the green on the day is Avalanche’s AVAX, trading about 9% higher.



Bitcoin&#8217;s quick recovery brought it back inside the descending triangle — generally a bearish trading pattern — that has formed over the past ten days, which indicates there were willing buyers of this dip.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="476" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png" alt="Bitcoin bulls cling to hope" class="wp-image-12810" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screenshot-2021-12-17-at-17.32.58-1024x476.png?w=1073 1073w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>BTC/USD on the 12-hour timeframe since Dec. 7; Source: TradingView</figcaption></figure>




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Bitcoin Bulls Hold Breath as BTC Tumbles Below $46k but Bounces

Ben Strack

<div id="highlights-block_616d9d868025e" class="highlights">
 <ul>
 <li>Front-month bitcoin futures contracts have historically had high correlation to spot bitcoin market</li>
 <li>Industry watchers split on how much demand exists for futures-based bitcoin products as the SEC has not yet allowed physically backed offerings in the wrapper</li>
 </ul>
 
</div>



ProShares plans to launch a futures-based ETF — the first bitcoin-linked ETF in the US — on Tuesday, firm executives said, marking what the company called a milestone for the nascent asset class.&nbsp;



The ProShares Bitcoin Strategy ETF (BITO) is actively managed and is set to invest in bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), according to the <a href="https://www.sec.gov/Archives/edgar/data/1174610/000168386321004445/f9424d1.htm" target="_blank" rel="noreferrer noopener">initial disclosure</a>. Though the first filing indicated that the fund may also invest in Canadian ETFs, <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/1174610/000168386321006052/f10028d1.htm" target="_blank" rel="noreferrer noopener">an amended prospectus</a> filed Friday afternoon took out that portion.



The offering, which will be listed on NYSE, has an expense ratio of 95 basis points.&nbsp;



Although ETFs that invest in bitcoin directly still await the green light from regulators, the expected listing of a bitcoin futures-based ETF can offer investors exposure to bitcoin returns through a brokerage account.



The announcement comes after Bitwise Asset Management published research as part of a <a href="https://cms.blockworks.co/bitwise-tries-once-more-for-spot-bitcoin-etp/" target="_blank" rel="noreferrer noopener">filing for a bitcoin ETF</a> last week showing that the CME bitcoin futures market leads price discovery compared to both spot bitcoin markets and offshore bitcoin derivatives exchanges.



“There’s lots of evidence that futures prices are a better place for discovery than spot and of course the regulated nature of the futures marketplace in terms of both the protections from manipulation and the clearinghouse for settlement,” ProShares Global Investment Strategist Simeon Hyman told Blockworks. “You put those belts along with the suspender of an ETF, and we think it’s a real robust solution.”



BITO is focused on investing in front-month contracts, Hyman added, which have historically had high correlation to spot bitcoin.



ProShares’ affiliate company, ProFunds, launched the <a href="https://cms.blockworks.co/profunds-launches-bitcoin-futures-strategy/">first bitcoin-linked mutual fund</a> in the US in July. Hyman, who noted that the futures-based mutual fund has returned 52% since inception through October 15, said the firm believes these products can coexist.&nbsp;



“We do think the use cases are similar but not entirely overlapping for both and there’s really an opportunity for a real convenient way to include this in their portfolios to now have a very effective solution,” he said.



<h3 class="wp-block-heading">What’s the demand?</h3>



Some question how well bitcoin futures ETFs will be received. Industry professionals have noted <a href="http://v">the downsides</a> to such products, including roll costs and contango — a situation when the futures price is above the expected future spot price.&nbsp;



Nate Geraci, president of The ETF Store, said that though he views futures-based ETFs as “suboptimal products,” there is significant pent-up demand among investors wishing to access bitcoin price exposure through traditional financial services plumbing.



“I expect these ETFs to experience sizable inflows and rocket up the leaderboard of top ETF launches this year,” he told Blockworks.



<blockquote class="wp-block-quote">“While shorter-term traders will likely lean heavily on these ETFs, I wouldn’t be surprised to see longer-term investors jump in as well, despite the products’ flaws.”&nbsp;</blockquote>



But Noelle Acheson, head of market insights at Genesis Global Trading, is not as bullish on investor interest in bitcoin futures ETFs, arguing that the demand for bitcoin futures ETFs will likely be disappointing.&nbsp;



“These could be of interest to a limited audience of institutions that can’t hold spot or derivatives directly, as well as retail investors that prefer the familiarity and convenience of ETFs,” she said. “Most investors, however, are more likely to continue to access BTC exposure through spot or derivatives, or through any of the many listed securities or international funds that offer spot BTC exposure.”



Acheson added that disappointment from the bitcoin futures ETF listing could provoke a correction, noting that the market fell sharply after the listing of bitcoin futures contracts on the CME in December 2017 and the listing of Coinbase on Nasdaq in April.&nbsp;



“However, even if there is some sell-off, it is unlikely to be as deep or lasting as the previous examples because of where we are in the market cycle,” Acheson explained. “In both previous cases, the market was already frothy and showing signs of exhaustion — that is not the case this time around.”



<h3 class="wp-block-heading">Who will be next?</h3>



Similar futures-based bitcoin products proposed by Valkyrie and Invesco, which were filed just after the ProShares offering, could also launch this week. <a href="https://cms.blockworks.co/valkyrie-files-8-a-in-key-step-for-bitcoin-futures-etf-approval/">Valkyrie filed</a> an <a href="https://www.sec.gov/Archives/edgar/data/1877493/000138713121010022/valk-8a12b_101521.htm" target="_blank" rel="noreferrer noopener">8-A with the SEC</a> on Friday, a form companies must complete before offering securities on an exchange.&nbsp;



Ed Lopez, head of ETF product for fund manager VanEck, told Blockworks on Friday that he hopes the firm will launch <a href="https://cms.blockworks.co/vaneck-files-for-bitcoin-strategy-etf/" target="_blank" rel="noreferrer noopener">its proposed bitcoin strategy ETF</a> by the end of the month.&nbsp;&nbsp;&nbsp;&nbsp;



“The competition will be exceedingly fierce among bitcoin ETF issuers, with relentless fee cuts and aggressive marketing tactics becoming the status quo,” Geraci said.



He added that investors may have to wait awhile for a physically backed bitcoin ETF, as the SEC likely wants to ensure futures-based ETFs don’t experience any hiccups before allowing a spot offering.



The SEC did not immediately respond to Blockworks’ request for comment.&nbsp;&nbsp;



Grayscale Investments executives have expressed plans to convert the Grayscale Bitcoin Trust (GBTC) to an ETF. David LaValle, the firm’s head of ETFs, previously said the company was <a href="https://cms.blockworks.co/grayscale-urging-sec-to-approve-bitcoin-spot-futures-etfs-at-same-time/" target="_blank" rel="noreferrer noopener">urging the SEC</a> to allow such a conversion at the same time that bitcoin futures ETFs were allowed to begin trading so as to maintain a “level playing field.”



Jennifer Rosenthal, the firm’s communications director, elaborated in a Twitter post Monday morning:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">What does that mean? Once there’s official and verifiable evidence of the SEC’s comfort with the underlying <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> market &#8211; likely in the form of a Bitcoin Futures ETF being deemed effective &#8211; the <a href="https://twitter.com/hashtag/NYSE?src=hash&amp;ref_src=twsrc%5Etfw">#NYSE</a> Arca will file a document called the 19b-4 to convert <a href="https://twitter.com/search?q=%24GBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$GBTC</a> into an ETF.&mdash; Jennifer Rosenthal (@jenn_rosenthal) <a href="https://twitter.com/jenn_rosenthal/status/1450085087467372548?ref_src=twsrc%5Etfw">October 18, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



ProShares declined to comment on whether it would look to also launch a spot bitcoin ETF.



“BITO will continue the legacy of ETFs that provide investors convenient, liquid access to an asset class,” ProShares CEO Michael Sapir said in a statement. “1993 is remembered for the first equity ETF, 2002 for the first bond ETF, and 2004 for the first gold ETF. 2021 will be remembered for the first cryptocurrency-linked ETF.”



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