David Canellis

Bitcoin ETFs backed by actual bitcoin finally hit US exchanges on Thursday after more than a decade of attempts. So far it’s done mostly nothing for bitcoin’s price.



Bitcoin briefly neared $49,000 after the spot ETFs went live but it has since shed about $3,000 to retrace by 6%.



That’s even slightly below where it was before the SEC’s social media hacker <a href="https://blockworks.co/news/sec-investigating-x-account-unauthorized-access">posted an authorized approval announcement</a> about the ETFs on Tuesday, about 24 hours before legitimate confirmation.



Any boon to the price of bitcoin seems to have come way earlier. Bitcoin traded around $25,000 before BlackRock <a href="https://blockworks.co/news/blackrock-files-bitcoin-etf">filed for its spot ETF last June</a> and rallied 20% within days.&nbsp;



With the post-BlackRock pump, bitcoin had reclaimed its <a href="https://blockworks.co/news/one-year-since-terra">pre-Terra implosion</a> price.



Bitcoin would give up those gains in the weeks following. But by mid-October, a <a href="https://blockworks.co/news/bitcoin-etf-report-price-jump">fake news tweet</a> claiming the SEC had approved BlackRock’s bid set bitcoin on a major uptrend. 



There was <a href="https://blockworks.co/news/bitcoin-etf-report-price-jump">immediate volatility around the tweet</a> — climbing $2,000 and down again within 30 minutes — but bitcoin ended up shooting nearly two-thirds in two months, from $27,700 to $44,000 in December.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16433014/embed#?secret=rxQaflPcx8" data-secret="rxQaflPcx8" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">At this rate, ether could soon overtake bitcoin for six-month returns</figcaption></figure>



About there it hovered until earlier this week. Analysts, researchers, traders and pundits were generally in consensus that the SEC would indeed approve spot ETFs for launch in the US, and come Monday bitcoin had jumped 8% to clear $47,000 for the first time in almost two years.



All things considered, the bitcoin spot ETF approval was massively front-run by those trading on the <a href="https://www.coindesk.com/business/2023/06/15/blackrock-close-to-filing-bitcoin-etf-source/">rumor</a>. Anyone who bought bitcoin when word of BlackRock’s filing first broke last year would now be up by more than half.&nbsp;



Anyone who bought bitcoin when the ETFs were officially approved would now be about even and could even be down slightly.&nbsp;



Had they opted for ether, they’d be up to 8% in the green, as traders appear looking to frontrun the next potential wave of crypto spot ETF approvals in the US.&nbsp;



BlackRock and other issuers including Fidelity, VanEck and Invesco Galaxy have filed for a spot ether ETF since lodging their equivalent bitcoin applications.&nbsp;The SEC has between late May and early August to make its first decision.



Read more: <a href="https://blockworks.co/news/sec-snafu-causes-bitcoin-ether-divergence">Bitcoin and ether diverge after SEC’s bitcoin ETF snafu</a>



In the meantime, markets seem to be waiting to find out exactly <a href="https://blockworks.co/news/blackrock-bitcoin-buy">how much bitcoin BlackRock</a>, Fidelity and other ETF issuers actually bought to back their respective funds after a busy day-one session, when <a href="https://blockworks.co/news/day-1-bitcoin-etf-trading-volume">more than $4.6 billion</a> in spot ETF shares were traded in the US overall.



In and outflow figures would be the first indications of investor interest and could shed light on their potential influence on bitcoin prices moving forward.



Some preliminary figures have been floated on social media but analysts warn they may not be totally accurate. Confirmed data is only expected to be completely accurate later in the day, or even early next week.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Buying the rumor paid off for spot bitcoin ETFs — and Ethereum looks to be next

Bitcoin is still down on 21-month highs set directly after the SEC <a href="https://blockworks.co/news/sec-investigating-x-account-unauthorized-access">bungled its spot ETF announcement</a> on Tuesday. Ethereum, on the other hand, is way up.



Ether (<a href="https://blockworks.co/price/eth">ETH</a>) has rallied more than 16% in that time and is now easily the year-to-date best performing top-20 cryptocurrencies by market cap. Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) is so far in second-place, with about half those returns.



Markets sold the news <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">one day early</a> due to the SEC’s unauthorized announcement and appear to have simultaneously bought the rumor on ether ETFs.



Ethereum Classic (<a href="https://blockworks.co/price/etc">ETC</a>) — the original Ethereum hard <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3014782">fork</a> in 25th position — is however having a moment. The blockchain’s native token ETC has spiked nearly 50% over the past day.



Due to the timing, there doesn’t appear to be any real rhyme or reason for ETC to be climbing so quickly.&nbsp;



The devil’s advocate would say that Ethereum Classic is gearing up for a hard fork later this month <a href="https://ethereumclassic.org/blog/2023-12-09-spiral-fork-announcement/">tipped</a> to better align the network’s EVM with Ethereum’s, which could help inspire projects to work with the chain.&nbsp;



And the network’s <a href="https://2miners.com/etc-network-hashrate">hashrate</a> did <a href="https://blockworks.co/news/ether-price-flat-after-merge-as-miners-hunt-for-hashrate-home">spike to all-time highs</a> following Ethereum’s switched to proof-of-stake in late 2022, as former ETH miners sought a substitute revenue stream at which to direct their GPU mining rigs.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16419617/embed#?secret=8oAaNABYv4" data-secret="8oAaNABYv4" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Ether has jumped from $2,200 to $2,650 this week. Ethereum Classic has gone from $20 to $30.&nbsp;</figcaption></figure>



Much of Ethereum Classic’s post-Merge hashrate has stuck around, despite the network only seeing around 30,000 in transactions per day (about the baseline for Bitcoin Cash).&nbsp;



For scale, Litecoin is currently processing more than half a million transactions per day (boosted by the network&#8217;s own brand of <a href="https://blockworks.co/news/avalanche-ordinals-asc20-transaction-record">inscriptions</a>) while Ethereum mainnet handles about twice as much, per <a href="https://bitinfocharts.com/comparison/litecoin-transactions.html#3y">BitInfoCharts</a>.



Still, Ethereum Classic only boasts less than 15% of Ethereum’s hashrate recorded just before the Merge.



ETHPoW, the hard fork of Ethereum from around the Merge meant to compete with Ethereum Classic, currently has about one-tenth of the latter’s hashrate.



Read more: <a href="https://blockworks.co/news/grayscale-deciding-ethpow-future">Grayscale Still Deciding What To Do With ETHPoW</a>



In fact, until yesterday’s formal SEC approval of spot bitcoin exchange-traded funds, ETC had returned nothing over the past year.&nbsp;



The more likely explanation is that traders are looking to frontrun the next big media narrative around crypto: the SEC approving spot bitcoin ETFs means an eventual greenlight for spot ether funds.&nbsp;



Due to illiquid markets, dumb money or widespread left-curving, Ethereum Classic has tagged along for the ride but ended up dominating ether for gains over the short-term.&nbsp;



Grayscale does already sell exposure to the token through one of its <a href="https://www.grayscale.com/crypto-products/grayscale-ethereum-classic-trust">trusts</a>, and the firm is now set to convert its $29 billion bitcoin trust into an ETF.



Some reckon fund issuers might soon seek approval for ETFs for other cryptocurrencies, including XRP and solana.



The odds of fund issuers lining up to launch ETFs for Ethereum Classic are slim. Although stranger things have happened in crypto.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Ethereum ETF hype spills over to Ethereum Classic, leading to 50% pump

Bitcoin is eyeing a price breakout after clearing $38,200 earlier today, reaching its highest point in 17 months.



That puts bitcoin up 130% this year, far more than almost all other top-25 cryptocurrencies.



<a href="https://blockworks.co/price/btc">BTC</a> only trails bitcoin cash (<a href="https://blockworks.co/price/bch">BCH</a>), chainlink (<a href="https://blockworks.co/price/link">LINK</a>) and solana (<a href="https://blockworks.co/price/sol">SOL</a>), which were up 133%, 163% and 508%, respectively, as of 5am ET.



For scale, bitcoin’s year-to-date gains are in line with Tesla stock and double Intel and Microsoft. 



Chipmaker Nvidia is meanwhile up more than 230% on the back of artificial intelligence hype, which made it the ninth company in history to reach trillion-dollar market value. Crypto’s overall market cap is now close to $1.5 trillion, with bitcoin making up more than half of that total.



Nailing down the exact catalyst for bitcoin’s recent growth is difficult, however.&nbsp;



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/15938748/embed#?secret=5UVKj8zeuu" data-secret="5UVKj8zeuu" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Click the swatches to toggle lines on the chart</figcaption></figure>



The <a href="https://blockworks.co/bitcoin-etf">pending suite of applications</a> for spot bitcoin ETFs from Wall Street mega giant BlackRock and nearly a dozen other firms is one theory. “Spot bitcoin” means they’ll have to actually buy bitcoin when they issue new shares to meet investor demand, which may or may not pick up, depending on which analyst you ask.



Bitcoin indeed jumped by nearly a quarter — from $25,500 to $31,500 — days after BlackRock <a href="https://blockworks.co/news/blackrock-files-bitcoin-etf">filed in June</a>. Low <a href="https://www.bloomberg.com/news/articles/2023-07-06/crypto-quarterly-trading-volume-dropped-to-lowest-since-2019">liquidity</a> led BTC to quickly drop, and by the middle of August had practically given up all those gains.



BTC has popped by half since then. Almost all of that came directly after a <a href="https://blockworks.co/news/blackrock-spot-bitcoin-etf-rumors">fake news headline suggested</a> that BlackRock&#8217;s application had been approved (it hasn’t). 



One month later, a <a href="https://blockworks.co/news/blackrock-xrp-fake-news">phony story about an XRP ETF</a> briefly pumped the fifth-largest crypto by 10%. XRP immediately corrected once the news was debunked.&nbsp;



<h2 class="wp-block-heading">Bitcoin price is correlating with 2012 halving</h2>



Markets are clearly ready to bounce on any good news — like the upcoming halving.&nbsp;



Sometime around April 19, 2024, Bitcoin miners will suddenly earn 50% fewer coins for each block they find, dropping from 6.25 BTC ($238,000) to 3,125 BTC ($119,000).



Bitcoin’s next halving will be its fourth ever. To some, halvings are magic: Previous events — in 2012, 2016 and 2020 — all preceded monumental bull markets.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/15936076/embed#?secret=eHTQz9sgaj" data-secret="eHTQz9sgaj" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Hit the log button for a clearer view</figcaption></figure>



At one year after each halving, Bitcoin had rallied:



<ul class="wp-block-list">
<li>8,900% after its first halving ($12 to $1,100).</li>



<li>285% after its second ($670 to $2,500).</li>



<li>540% after its third ($8,700 to $55,900).</li>
</ul>



Bitcoin even went up in the 200 days leading up to all three occasions — so no matter how you cut it, BTC’s price has gone up around halvings. 



This time around is even somewhat unique: demand could go up due to a spot ETF just as supply is slashed in half.



Still, buying bitcoin around the halvings is much like buying the rumor with no intention to sell the news. The sample size is incredibly small, leaving little room for reliable analysis of how the halving in April might impact bitcoin’s price.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/15936491/embed#?secret=dupzeERIo8" data-secret="dupzeERIo8" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Bitcoin&#8217;s performance is so far in line with what happened before the 2012 event</figcaption></figure>



Bitcoin miners, no doubt, hope the next halving mirrors the others. Axing issuance is expected to crush their profit margins, especially those without extremely cheap access to power (or even their own power stations). 



Recent estimates suggest the most efficient bitcoin miners pay $15,100 to mine each coin. That number doubles after the halving, “which would likely put the majority of the mining market into severe income stress,” <a href="https://insights.glassnode.com/the-week-onchain-week-39-2023/">according</a> to data unit Glassnode. 



All this means bitcoin had better stay above $30,000 after the next halving, which is 141 days away. So far, so good.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Bitcoin flirts with breakout, price mirrors lead-up to 2012 halving

Ben Strack

After Franklin Templeton became the latest large traditional finance firm to file for a spot bitcoin ETF, industry watchers await who could be the next big company to throw its hat in the ring.&nbsp;



Several market observers have named fund giants Schwab Asset Management and State Street Global Advisors as those who could soon follow, though the firms aren’t letting on.&nbsp;



BlackRock, a fund group managing $9.4 trillion in assets as of June 30, <a href="https://blockworks.co/news/blackrock-clout-bitcoin-etf-approval">applied for a spot bitcoin fund in June</a>. Fellow financial titans <a href="https://blockworks.co/news/fidelity-bitcoin-etf-refiling">Fidelity</a> and <a href="https://blockworks.co/news/bitcoin-etf-invesco-wisdomtree">Invesco</a> re-filed for their own planned spot bitcoin ETFs later that month.&nbsp;



Franklin Templeton’s filing signals there are even more large companies to follow, according to Ric Edelman, founder of Edelman Financial Engines and the Digital Assets Council of Financial Professionals.&nbsp;



Read more: <a href="https://blockworks.co/news/franklin-templeton-bitcoin-etf">Fund giant Franklin Templeton plots spot bitcoin ETF</a>



“This will be a snowball effect; every fund sponsor will have no choice but to offer a spot bitcoin ETF,” he told Blockworks. “Even those that don’t agree with the investment premise will recognize that they are losing [assets under management], and in some cases even clients, to competitors that do offer these products.”&nbsp;



<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">You may think bitcoin is a scam, but some of the world&#39;s largest asset managers believe it&#39;s worth their time&#8230; BlackRock, Fidelity, Invesco, Franklin Templeton, etc. We&#39;re talking a who&#39;s who of asset management. That should get your attention regardless. <a href="https://t.co/omn3QGKdmC">https://t.co/omn3QGKdmC</a>&mdash; Nate Geraci (@NateGeraci) <a href="https://twitter.com/NateGeraci/status/1701640086373441883?ref_src=twsrc%5Etfw">September 12, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h2 class="wp-block-heading">So, who’s next?</h2>



Nate Geraci, president of The ETF Store, said in an X <a href="https://twitter.com/NateGeraci/status/1672708730939424768">post</a> in June that Schwab Asset Management was a “dark horse” candidate to pursue a spot bitcoin ETF.&nbsp;



David Botset, head of equity product management and innovation at Schwab Asset Management, told Blockworks in January 2022 that the company was evaluating “opportunities such as spot cryptocurrency or blockchain technologies in the form of an ETF.”



<a href="https://blockworks.co/news/first-charles-schwab-crypto-etf-set-to-launch-next-week">The firm launched the Schwab Crypto Thematic ETF</a> (STCE) last year. Investing in crypto-related stocks such as Coinbase, MicroStrategy and various bitcoin miners, the fund has about $11 million in assets. Schwab was also <a href="https://blockworks.co/news/tradfi-launches-crypto-exchange">among the backers of crypto exchange EDX Markets</a>, which launched in June.



A company spokesperson declined to comment on whether it could pursue a spot bitcoin ETF.



State Street Global Advisors (SSGA) is another candidate for entering the spot bitcoin ETF race, according to CK Zheng, co-founder of crypto hedge fund ZX Squared Capital. The firm’s US ETFs hold nearly $1.1 trillion — the second-largest of which is its SPDR Gold Trust (GLD), which manages $54 billion.&nbsp;&nbsp;



“As we view BTC as a commodity and a digital gold, State Street is in a unique position to expand their SPDR GLD ETF to a SPDR BTC ETF with their expertise and influence,” Zheng told Blockworks.&nbsp;



Bloomberg Intelligence senior analyst Eric Balchunas agrees, noting in a <a href="https://twitter.com/EricBalchunas/status/1672949604210429954">response</a> to Geraci’s June post: “How on Earth do you be the [company with]<a href="https://twitter.com/search?q=%24GLD&amp;src=cashtag_click"> GLD</a> and not look to add spot bitcoin asap?”



“We continuously evaluate our product lineup and pricing structure in order to offer investors attractive solutions to help them meet their goals,” a State Street spokesperson told Blockworks in an email Monday, declining to comment further.&nbsp;



State Street <a href="https://blockworks.co/news/state-street-launches-digital-finance-unit-for-crypto">formally launched a digital finance division</a> in 2021 — a unit whose priorities this year were set to include <a href="https://blockworks.co/news/state-street-sees-significant-opportunity-in-tokenization">tokenizing funds and private assets</a>.&nbsp;



But Rory Tobin, head of SSGA&#8217;s ETF business, told Financial News in June the firm didn’t have immediate plans to launch crypto products — noting “it’s been hard to come up with an investment case for crypto.”



ProShares runs the largest bitcoin-related ETF in the US — albeit one that holds bitcoin futures instead of BTC directly. Roughly $900 million of its $65 billion in US ETF assets under management reside in its Bitcoin Strategy ETF (BITO).&nbsp;



The firm has not yet applied with the US Securities and Exchange Commission for a spot product. A spokesperson declined to comment.&nbsp;



“If they can bring this success to a spot BTC ETF, they will become a dominant player in this space,” Zheng said.&nbsp;



<h2 class="wp-block-heading">Remaining on the sidelines</h2>



Matthew Sigel, head of digital assets research at prospective bitcoin ETF issuer VanEck, said jumping into the bitcoin ETF race isn’t exactly attractive right now, considering the SEC has blocked every such launch attempt over the last decade.&nbsp;



Read more: <a href="https://blockworks.co/news/sec-delay-decision-bitcoin-etf-blackrock">Delays mount: SEC defers ruling on BlackRock, Fidelity bitcoin ETFs</a>



“Who would possibly want to join the stampede to offer a bitcoin ETF, given that an over-zealous regulator is making the usual process impossible, fees will race to the bottom, and there may be little differentiation among sponsors?” Sigel said.&nbsp;&nbsp;



Though Edelman expects others to look to offer a spot bitcoin ETF, there will be a few exceptions, he said.&nbsp;



“Some fund companies and advisory firms specialize in certain market segments, and they won’t offer crypto funds if those aren’t consistent with their brand,” Edelman said. “But these will be in the minority.”&nbsp;



JPMorgan is “very unlikely” to join the bitcoin ETF race, according to Zheng, given CEO Jamie Dimon’s repeated criticisms of the asset class. Dimon called bitcoin a “hyped-up fraud” in January during an <a href="https://www.youtube.com/watch?v=qdIooHrQeK8">interview</a> with CNBC.



Vanguard, whose US ETFs manage nearly $2.2 trillion, has not signaled any interest in the space to date.



Chief investment officer Greg Davis <a href="https://investor.vanguard.com/investor-resources-education/article/vanguard-view-on-investing-in-cryptocurrency">called</a> crypto “more of a speculative asset class” in May 2022. He added that while the firm finds blockchain technology compelling, crypto “doesn’t fit from an investment perspective.”



JPMorgan and Vanguard did not return requests for comment.&nbsp;



Edelman said there will eventually be widespread availability of spot bitcoin ETFs from most registered investment advisers (RIAs) and brokerage firms. Wirehouses, he added, are likely to be slower to offer a spot bitcoin ETF — whether it’s their own product or ones issued by others.



“They will certainly engage eventually due to demand from both their reps and their clients,” Edelman said. “The barrier to all this is the SEC’s refusal to approve the applications to date. There is widespread optimism that this will soon change.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Which TradFi giant could jump into the bitcoin ETF race next?

Though the US currently hosts only four out of the top 25 crypto exchange-traded products (ETPs), successful attempts by firms to gain approval for over two dozen such offerings from the Securities and Exchange Commission could rapidly change that.



The largest crypto ETPs by far are Sweden-based XBT Provider’s Bitcoin Tracker One (COINXBT) and Ethereum Tracker One (COINETH), according to a Wednesday report by CoinGecko. The data is as of Sept. 11.



Both are exchange-traded notes (ETNs), which are debt instruments typically collateralized by the underlying exposure.



COINXBT and COINETH have roughly $4.4 billion and $2.6 billion in assets, respectively — well ahead of third-place Hashdex Nasdaq Crypto Index fund in Brazil, which has nearly $1.1 billion in assets under management.



The ProShares Bitcoin Strategy ETF (BITO) — a fund holding bitcoin futures contracts that launched in the US in October 2021 — has $915 million, while Canada’s Purpose Bitcoin ETF sits in fifth at $819 million.&nbsp;



Canada is home to six of the top 25 largest ETPs in the world, the CoinGecko data shows.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1250" height="1372" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=1024&amp;h=1024" alt="" class="wp-image-68033" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=1250 1250w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=273 273w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=933 933w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=234 234w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=238 238w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=200 200w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/Coingecko-ETP-rankings.jpg?w=73 73w" sizes="auto, (max-width: 1250px) 100vw, 1250px" /></figure>



The crypto ETP rankings include nine ETFs, five ETNs, eight exchange-traded commodities (ETCs), two closed-end funds, and one investment trust.



However, if the SEC adjusts its stance, these top products could shift rapidly. Over the past decade, the US agency has turned down dozens of attempts from issuers aiming to introduce ETFs that would hold bitcoin directly.



Bloomberg Intelligence analyst James Seyffart said in July that a US spot bitcoin ETF “<a href="https://blockworks.co/news/approved-spot-bitcoin-etf-launch-size">could be the largest, if not one of the largest, launches in history</a>.”



Matt Hougan, chief investment officer of Bitwise, said <a href="https://blockworks.co/news/bitwise-cio-blackrock-btc-etf">during a webinar</a> last month that such a fund could attract $55 billion in net flows in its first five years on the market.



Read more: <a href="https://blockworks.co/news/us-spot-bitcoin-etf?utm_source=CryptoNews&amp;utm_medium=app">US spot bitcoin ETF not impossible — just ask the rest of the world</a>



Grayscale Investments’ court win against the SEC last month has led various industry watchers to believe <a href="https://blockworks.co/news/grayscale-sec-spot-bitcoin-etf">spot bitcoin ETF approvals are now more likely</a> in the next year or so.&nbsp;



<a href="https://blockworks.co/news/judges-grayscale-sec-ruling">Judges in the DC Circuit Court of Appeals ruled</a> that the SEC denying the conversion of the Grayscale Bitcoin Trust (GBTC) to an ETF — but allowing bitcoin futures ETFs to launch — was “arbitrary and capricious.”&nbsp;



The SEC is not forced to approve the product, but it cannot block GBTC’s conversion under the same reasoning.



GBTC currently has $16.2 billion in assets under management. When asked about competition the fund would face if US spot bitcoin ETFs are ultimately greenlit, <a href="https://blockworks.co/news/grayscale-bitcoin-etf-sec">Grayscale Chief Legal Officer Craig Salm said</a> GBTC is the only ​​”actual fund today with [assets under management], trading volume and investors.”



<h2 class="wp-block-heading">List of US live filings continues to grow</h2>



<a href="https://blockworks.co/news/blackrock-clout-bitcoin-etf-approval">The first-time proposal by asset management giant BlackRock</a> in June to launch a spot bitcoin ETF spurred other firms to reignite their previous efforts.&nbsp;



<a href="https://blockworks.co/news/franklin-templeton-bitcoin-etf">Franklin Templeton became the latest to file for a spot bitcoin ETF</a> on Tuesday.&nbsp;



Fund issuers have now sought to bring crypto ETFs to market that go beyond bitcoin, as more than a dozen <a href="https://blockworks.co/news/sec-consider-ether-futures-etfs">planned ETFs that would hold ether futures contracts</a> are now in front of the SEC.



<a href="https://blockworks.co/news/grayscale-victory-spot-ether-etf">Planned spot ether ETFs entered the fold last week</a>, with Ark Invest and 21Shares collaborating on one, and VanEck renewing its bid to launch another.



<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">Re live ETF filings, there&#39;s now 15 Eth Futures, 12 spot bitcoin, 3 spot Eth and a partridge in a pear tree. <a href="https://t.co/e8p4pK1hqk">https://t.co/e8p4pK1hqk</a>&mdash; Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1701681832712949811?ref_src=twsrc%5Etfw">September 12, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Most recently, Hashdex on Tuesday shared <a href="https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/filings/SR-NASDAQ-2023-035.pdf">plans</a> to launch an Ethereum ETF that would hold both spot ether and ether futures contracts.&nbsp;&nbsp;



A spokesperson for the company declined to comment.&nbsp;



The Hashdex filing came after the company said in a filing last month that it intends to change its Bitcoin Futures ETF (DEFI) — launched in September 2022 — to a fund that also holds bitcoin directly.



Read more: <a href="https://blockworks.co/news/hashdex-bitcoin-etf?utm_source=CryptoNews&amp;utm_medium=app">How Hashdex’s planned bitcoin ETF differs from competing proposals</a>



Both of Hashdex’s proposals note that their net asset values would be calculated using spot bitcoin and ether prices derived from the prices of the assets’ respective futures traded on the Chicago Mercantile Exchange (CME) “to avoid any exposure to potential manipulation from unregulated exchanges.”



While <a href="https://blockworks.co/news/crypto-fund-trading-spot-etf">ether futures ETFs could launch as soon as next month</a>, the SEC has <a href="https://blockworks.co/news/sec-delay-decision-bitcoin-etf-blackrock">240 days to rule on the proposed spot bitcoin and ether funds</a>, bringing those deadlines to 2024.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Sweden, Canada lead in crypto ETPs as proposal stack in the US grows

Sebastian Sinclair

Bitcoin remains stagnant, moving a mere $100 from last week, as investors hold their breath in anticipation of the US Security and Exchange Commission’s decisions surrounding exchange-traded funds (ETFs).



Despite early optimism that drove prices from $25,000 to $29,000 earlier this summer, the market has been trapped in a state of uncertainty, with participants seemingly indifferent to minor volatility. Bitcoin is currently trading near $29,150 and remains little changed on the day.



In the past 24 hours, the bitcoin derivatives market has displayed a near-balanced distribution between long and short positions across major exchanges, including <a href="https://blockworks.co/tag/binance">Binance</a>, <a href="https://blockworks.co/tag/okx">OKX</a>, and Deribit, <a href="https://www.coinglass.com/LongShortRatio" target="_blank" rel="noreferrer noopener">Coinglass data</a> shows. The equilibrium may be reflecting <a href="https://blockworks.co/news/bitcoin-low-volatility">a state of uncertainty</a> or mixed sentiment among traders, without a clear consensus leaning either bullish or bearish.



The market had anticipated increased action earlier this month, with potential dates for SEC feedback on spot bitcoin filings. No decision forthcoming leaves the crypto community in continued suspense.



The <a href="https://blockworks.co/news/sec-delays-bitcoin-etf-decision">delay concerning ARK&#8217;s 21Shares BTC ETF</a>, bolstered by applications from financial giants like <a href="https://blockworks.co/tag/fidelity">Fidelity</a> and <a href="https://blockworks.co/tag/blackrock">Blackrock</a>, has contributed to the market&#8217;s wait-and-see stance. 



While not an outright rejection, the deferment has tempered some of the previous optimism surrounding a seemingly certain bitcoin ETF, according to digital asset firm BitOoda.



New dissenting opinions such as those expressed in a detailed letter from <a href="https://bettermarkets.org/newsroom/sec-should-reject-bitcoin-etf-filings-because-they-will-expose-investors-to-fraud-manipulation-and-other-investor-harms/" target="_blank" rel="noreferrer noopener">Better Markets</a>, outlining reasons a bitcoin ETF should be rejected, compound the uncertainty. If similar concerns influence the SEC&#8217;s ultimate decision, it could prolong the current market stagnation, the firm added.



Nevertheless, clarity may be on the horizon, with many anticipating <a href="https://blockworks.co/news/industry-weighs-crypto-asset-reporting">an update or ruling from the ongoing Grayscale vs SEC dispute</a> about the asset manager converting its flagship Trust to a spot ETF.



This could paint the picture for all spot ETFs, including those for ether (<a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a>), adding yet another layer of complexity to muted price action.



&#8220;The conditions of the bitcoin market continue to resemble the bear market hangover seen in prior cycles, with an outsized wealth held by long-term high conviction holders,&#8221; Glassnode wrote in a recent <a href="https://insights.glassnode.com/the-week-onchain-week-33-2023/?utm_campaign=woc_33__2023&amp;utm_medium=woc_newsletter&amp;utm_source=email" target="_blank" rel="noreferrer noopener">note</a>.



Still, with low volatility comes “apathy and exhaustion” which may signal a relatively weak inflow of demand, the on-chain intelligence platform said.



While major blue-chip digital assets remained flat, the majority of cryptos within the top 50 by market capitalization fell roughly between 3% and 10% late Tuesday.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Bitcoin stalls near $29K as markets await spot ETF outcome

<div id="highlights-block_625447e2895f1" class="highlights">
 <ul>
 <li>While 86% of financial pros plan to boost their crypto allocations in the next year, none plan to decrease</li>
 <li>Advisers, on average, report wanting to allocate 6% of a client’s total portfolio to crypto</li>
 </ul>
 
</div>



Nearly nine of 10 financial advisers investing in crypto expect to increase their allocations over the next year, according to a Nasdaq survey, though the approval of a spot crypto ETF would help speed further adoption.



The survey published Monday gathered input from 500 advisers who are currently or considering allocating to crypto. While 86% plan to boost their allocations to the space in the next 12 months, none plan to decrease over that span.



“This is significant because it shows that neither advisers nor their clients are feeling buyer’s remorse as a result of their decisions,” Jake Rapaport, Nasdaq’s head of digital asset index research, told Blockworks.



But 72% of advisers would be more likely to invest client assets in crypto if a spot ETF were offered in the United States, the survey found.



The Securities and Exchange Commission has not yet approved a product that invests directly in cryptocurrencies, such as bitcoin, and 31% of respondents said they find it unlikely that such a product will be approved this year.



Bloomberg Intelligence analysts <a href="https://cms.blockworks.co/is-a-change-to-exchange-definition-key-to-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">have said</a> they do not expect a spot bitcoin ETF to be approved until mid-2023.



In the meantime, fund groups ProShares, Valkyrie Investments and VanEck last year launched ETFs that primarily invest in bitcoin futures contracts. The SEC <a href="https://cms.blockworks.co/sec-approves-bitcoin-futures-etf-filed-under-the-33-act/" target="_blank" rel="noreferrer noopener">last week approved</a> a bitcoin futures ETF from asset manager Teucrium filed under the Securities Act of 1933 — the regulation under which spot bitcoin ETFs are filed.



Half of the advisers already investing in crypto are allocating to bitcoin futures ETFs, and 28% plan to start using them in the next 12 months, Nasdaq discovered.



<h3 class="wp-block-heading">Who is allocating, and how?</h3>



About a third of registered investment advisers (RIAs) use crypto, compared to 19% of independent broker-dealers (IBDs) and 17% of wirehouse advisers.



Advisers, on average, report wanting to allocate 6% of a client’s total portfolio to crypto.



Roughly 70% would consider using an index fund for broad exposure, followed by sector-specific index funds (57%), actively managed funds (52%), individual digital assets (40%) and high-yield funds (31%).



Despite this, only 10% of advisers say they are very knowledgeable about crypto. Nasdaq partnered with asset manager Hashdex last month to launch a digital assets curriculum for financial professionals.



“There is so much room for educational growth on the subject,” Rapaport said, noting that asset managers, index providers and media publishers can all help narrow the gap. “What’s less surprising is that advisers know what they want, and they largely want access to passive investment products for their clients’ portfolios.”



Nasdaq launched its crypto index in February 2021. It allocated roughly 67% to bitcoin and nearly 30% to ether, as of March 1, as well as allocations of less than 1% to eight other cryptoassets.&nbsp;



“We continue to believe that the Nasdaq Crypto Index simplifies access to the entire asset class by adhering to principles that matter to advisers and investors,” Rapaport said. “We look forward to driving further innovation in crypto to support all types of investors.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Nasdaq Survey: Spot Crypto ETF Would Speed Adviser Allocation

<div id="highlights-block_62167c1871c86" class="highlights">
 <ul>
 <li>The lobbyist is “optimistic” about the crypto executive order expected this week</li>
 <li>The Blockchain Association, which educates lawmakers and regulators on crypto and blockchain technologies, hopes to further grow its lobbying forces</li>
 </ul>
 
</div>



Blockchain Association Executive Director Kristin Smith expects a pending digital assets executive order from President Biden to set up a roadmap for federal agencies to cooperate on everything from taxation to securities regulations.



The prominent crypto lobbyist talked with Blockworks at ETHDenver to give her take on regulatory expectations this year. Founded in 2018, the association focuses on public policy crypto initiatives, including outreach to lawmakers.



Smith, a former Senate and House of Representatives staffer, is also an independent director at Anthony Scaramucci’s SkyBridge Capital and on the Filecoin Foundation’s board.



The executive order — which reportedly will include a strategy for assessing a central bank digital currency (CBDC) — could come this week, <a href="https://finance.yahoo.com/news/biden-order-on-crypto-oversight-expected-next-week-source-says-173452499.html" target="_blank" rel="noreferrer noopener">according to Yahoo Finance</a>. What else it covers is up for debate.



“I’m sure there will be some mention of illicit finance,” Smith said. “But I think that might be balanced with a more positive message that this is an important area and an important step forward in the evolution of networks.”



Former presidential and New York City mayoral candidate Andrew Yang said at ETHDenver he’s optimistic about the upcoming executive order. Yang <a href="https://cms.blockworks.co/andrew-yang-turns-to-dao-in-web3-lobbying-push/" target="_blank" rel="noreferrer noopener">announced last week</a> a DAO to fund pro-Web3 lobbying.



“No one knows exactly what the approaches are going to be, what the regime is going to be, what the rules are going to be, even who the regulators are necessarily going to be,” Yang said. “If you get clarity on those things…you can imagine the future of this just multiplying over and over again, because people will know what the rules of the road are.”&nbsp;



Check out more excerpts from Blockworks&#8217; Ben Strack&#8217;s conversation with Smith below.



<hr class="wp-block-separator"/>



Strack: How have the focuses of the Blockchain Association changed over time?



Smith: When the Blockchain Association started three and a half years ago, we were pretty focused on the securities clarity issue at the time, and in 2018, it was coming off the [initial coin offering] craze of 2017 and there were a lot of concerns about the pre-sale of tokens at the time.



I think if you fast-forward to today, there are a lot of different ways now for tokens to be issued. There’s still confusion about securities laws, but the issue has changed a little bit. Also on the securities front, there’s questions around secondary market trading and what are the best practices there.&nbsp;



Even further with DeFi being a major force today — I don’t think that term existed in 2018 — just trying to figure out [how] those protocols might be regulated in the future.



The tax policy issues have gotten much more complicated. There’s questions around staking and lending, which were less common activities in 2018. Reserve-backed stablecoins have become a thing.



Strack: What do you make of the recent Congressional hearings on crypto?



Smith: It’s really getting better. I think <a href="https://cms.blockworks.co/crypto-industry-will-move-offshore-if-congress-doesnt-act-executives-warn/" target="_blank" rel="noreferrer noopener">that hearing</a> from the Financial Services Committee back in December was really a great hearing — interestingly not just for crypto, but for all of tech.



It was really thoughtful. There were really well-informed questions, and I think the level of education has grown.&nbsp;



​​We have a lot of inbound [requests] from individual offices on [Capitol Hill], from regulators, from federal agencies, from groups of congressmen that want to learn, and are asking for us to come in and tell them about Web3 or come in and tell them about NFTs. It’s a lot different than when we were sort of begging for anyone to take a meeting with us.&nbsp;



Strack: How has participation from the broader crypto community evolved?



Smith: The Blockchain Association represents the industry perspective, but this space is so much more than a traditional industry. It’s a whole ecosystem of creators and users and developers, and there needs to be a way for those people to participate in the process.



I think that given the communicative nature of the industry — and all of our Twitter chats and Discord channels and everything else — we’ve done a pretty good job when we’ve needed to mobilizing people to weigh in with the Senate or FinCEN [Financial Crimes Enforcement Network] or whatever agency or body of Congress we need to reach. But I think we can take that to a higher level.



I think Andrew Yang’s focus on the poverty alleviation of this is a really important piece of the conversation. I think that what [Messari Founder] Ryan Selkis is trying to do with the Digital Freedom Alliance and giving people information about candidates and finding ways for them to be involved is a great effort.&nbsp;



Strack: What are some areas of crypto that might not be getting as much regulatory attention?



Smith: We need to have a serious conversation about the legal status of DAOs [decentralized autonomous organizations] and giving them legal liability. That’s probably something that has to be done on the state-level.



I also think there’s a really good conversation to be had around privacy — being able to not have to show your entire net worth and transaction history to someone who is sophisticated enough to trace it back to you. At the moment, that’s not really at the forefront of lawmakers’ minds — maybe some regulators’ minds.



If you look at Congress, they’re really into stablecoins, largely because I think they can understand what a stablecoin is, and it’s kind of like banking, and so they sort of get that. And people are interested in the securities laws issues, particularly [SEC Chair] Gary Gensler.



Strack: A spot bitcoin ETF has not yet gained approval in the US. How do you feel about that?



Smith: We think the fact that they have approved a futures ETF but not a spot ETF is an [Administrative Procedure Act] violation, and so we think that they should move quickly. There have been members of Congress that have reached out to us that we’ve educated on the issue and want to learn more.



That’s something that we’re taking a serious look at, and our lawyers are taking a serious look at trying to figure out if there are other actions we could take to help move that along and be productive.



Strack: Do you believe a spot bitcoin ETF will be approved in the US anytime soon?



Smith: I don’t see it happening. Based off what Gary Gensler has said, he wants to see regulation of the spot markets. But that is not an easy thing to do, because I don’t believe that most of these tokens — at least the ones trading in the US — are securities. I think they’re commodities, and there is no clear authority, outside of the [Commodity Futures Trading Commission]’s anti-fraud and anti-manipulation authority, for a spot market regulator.



So, that would take an act of Congress, and I think that’s going to take a little bit of time before we see some momentum on that front.



I don’t think that Gary Gensler is going to approve a spot ETF unless he’s held to by the courts or something. I think it’s going to be awhile.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.