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SEC delays BlackRock's Ethereum spot ETF to March

SEC delays BlackRock's Ethereum spot ETF to March

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The SEC has extended its review of BlackRock’s proposed Ethereum spot ETF, pushing a decision date back to March 10th, 2024. The delay reflects the cautious regulatory stance towards crypto investment vehicles amid volatility and compliance concerns. While disappointing for investors eager for exposure, thorough vetting aims to ensure protections are in place once an Ethereum fund is approved.

Meanwhile, fresh data reveals FTX’s bankruptcy estate dumped $1 billion worth of Grayscale’s Bitcoin ETF shares following its conversion approval. The selling pressure from liquidating such substantial holdings helps explain recent major outflows from what was formerly the world’s largest Bitcoin fund. Yet with FTX’s position now erased, some see redemption slowing if underlying appetite persists.

Still on the ETF front, confluent tailwinds surround Bitcoin as its next “halving” supply cut coincides with spot ETF powered by institutional demand. Top funds have already purchased over $4.3 billion of BTC rapidly. With miners generating far less new bitcoins by April, analysts forecast an impending supply shock as competition intensifies for the asset’s fixed 21 million cap.

Does more institutional exposure and investment do good for crypto as an industry? Price stagnation amid crypto’s first regulated foray into Wall Street’s domain muddies the waters.

While untouchable for over a year, whether Ethereum joins this fray holds keys for any crunch plays in the coming months. Between the arguably slow but steady inroads with ETFs and swelling mainstream acceptance, crypto’s dynamics enter 2024 facing transformations – for better or worse.

Today’s Newsletter

  • SEC delays BlackRock’s Ethereum spot ETF to March
  • FTX sold about $1b of Grayscale’s Bitcoin ETF, explaining much of outflow: sources
  • Bitcoin set for supply shock as ETF buys surge and halving nears

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ETHEREUM

SEC delays BlackRock’s Ethereum spot ETF to March

The SEC has extended its review window for considering a proposed rule change allowing BlackRock’s iShares Ethereum Trust ETF. Originally facing a January 25th deadline, the regulator now has until March 10th to approve or deny the spot crypto product. The SEC stated it required more time to thoroughly assess the Ethereum fund proposal and related issues.

While disappointing to investors awaiting easier exposure, the cautious stance reflects ongoing concerns around crypto volatility and compliance. With Ethereum ETF approval marking a significant adoption milestone, the SEC aims to ensure adequate protections are in place first. Still, as the deferred decision date nears, anticipation will likely again reach fever pitch over whether Wall Street finally embraces Ether. [cryptobriefing]

BITCOIN

FTX sold about $1b of Grayscale’s Bitcoin ETF, explaining much of outflow: sources

New data reveals FTX’s bankruptcy estate dumped approximately $1 billion worth of Grayscale’s Bitcoin ETF shares following its high-profile conversion to an exchange-traded fund. The massive position sale explains much of the heavy recent outflows from what was formerly the world’s largest Bitcoin investment fund. Now with FTX’s holdings erased, some optimism exists that selling pressure could ease absent more unusual liquidations.

FTX had held substantial Grayscale exposure to capitalize on a persistent premium around the trust’s shares compared to its underlying Bitcoin. But after profiting from that disparity for years, the collapsed trading firm’s sellers are finally exhausted. While poor market structure clearly enabled FTX to artificially prop up GBTC, its absence could allow normal supply-demand dynamics to regain dominance. [coindesk]

BITCOIN

Bitcoin set for supply shock as ETF buys surge and halving nears

Bitcoin could be on the brink of a major supply shock as growing spot ETF demand converges with the network’s upcoming halving this April. Top funds have already accumulated over $4.3 billion worth of Bitcoin in just one week after the SEC greenlit the long-awaited products. Meanwhile the halving will cut miner block rewards in half, drastically reducing new supply entering circulation.

This combination has all the makings of a squeeze, with intensifying competition predicted for Bitcoin’s limited liquidity. However, stagnant prices after Bitcoin’s Wall Street debut muddies the narrative. And sizable inactive supply not moving for a year provides potential relief valves if holders get motivated by volatility. Still, with demand spikes ahead and programmed emission drops nearing, Bitcoin’s supply-demand equilibrium faces mounting pressure. [cryptobriefing]

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