Fingers Crossed🤞🏿
ETF Preparations? Bitcoin's Rallies. ETF Fees Compete as Approval Nears. VanEck and Bitwise Seed the ETF Hype. SEC Chair's Caution. ARK Invest continues selling Coinbase.
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Everyone is waiting for the big news of January 10.
Bitcoin's price exceeded $47,000 for the first time since December 2021.
On January 8, Bitcoin traded at $47,109, marking a 6.85% increase in 24 hours.
Bitcoin is $46,794 at the time of writing. 6.21% increase in the last 24 hours.
The crypto market is buoyed by the prospect of the first-ever spot Bitcoin ETF approval.
The Outflow: Bitcoin short ETPs experienced a $1 million outflow in the past week.
Digital asset investment products saw inflows of $151 million in the first week of 2024, bringing the total since the Grayscale vs. SEC lawsuit to $2.3 billion.
Meanwhile, Bitcoin ETF applicants announce new fees.
That's how you attract your investors - cut the fees.
ETF issuers have filed final amendments to their S-1 forms, which now feature competitive fee rates.
Lowest Fees Offered
Bitwise: No fee for the first six months and first $1 billion in assets, then a 0.24% fee.
ARK Invest and 21Shares: Similar structure, with a fee of 0.25% after the initial waiver.
Other Notable Fees
VanEck: 0.25%
Franklin: 0.29%
Fidelity: 0.39%
BlackRock: 0.20% initially (until the fund reaches $5 billion), rising to 0.30%.
Higher Fee Range
WisdomTree: 0.50%
Galaxy Invesco: No fee for first six months, then 0.59%.
Valkyrie: 0.80%
Hashdex: 0.90%
Grayscale: Reduced from 2% to 1.5%, the highest in the group.
Eric Balchunas commented on the intense competition and fee reductions.
Grayscale's Massive Scale
Grayscale Investments stands out in the spot bitcoin ETF arena with over $27 billion in assets under management (AUM) and over 619,000 BTC.
While other issuers are starting from zero, Grayscale's large existing investor base and high trading volume offer a significant advantage.
Despite proposing higher fees than competitors, Grayscale is banking on its volume and liquidity to attract investors.
Investors may not readily switch to lower-fee ETFs due to potential tax implications on capital gains.
Hashdex's Unique Approach: Hashdex's application is distinctive as it aims to convert an existing crypto futures ETF to hold spot Bitcoin.
Let’s see how’s everyone preparing to welcome the ETF approval.
TTD Predicting 🔮
The predictions are on spot.
Standard Chartered Bank estimates $50-100 billion could flow into spot bitcoin ETFs in 2024 if approved.
Bitcoin Price Projection: The bank anticipates Bitcoin could reach $200,000 by the end of 2025.
The prediction draws parallels to the impact of gold ETFs on the gold market, particularly citing the SPDR Gold Shares (GLD) as a benchmark.
Detailed Analysis
GLD's influence on gold market capitalisation used to estimate potential Bitcoin ETF inflows.
Expectations are based on market capitalisation comparisons between gold then and Bitcoin now.
Applicant Expectations
VanEck anticipates $1 billion in inflows within days and $2.4 billion within a quarter.
Galaxy predicts $14 billion within the first year.
Bitwise foresees a $72 billion market size in five years.
LMAX strategist Joel Kruger predicts that Bitcoin could rally an additional 10%-15% if the SEC approves the spot bitcoin ETFs.
TTD Seeding 🌱
VanEck and Bitwise are seeding their Bitcoin ETFs with significant capital ahead of potential approval.
Seed Capital Details
VanEck: Seeding its ETF with $72.5 million.
Bitwise: Providing $500,000 seed basket and offering a $200 million investment opportunity.
Pantera Capital indicated interest in purchasing up to $200 million of Bitwise's shares.
Pledge for Bitcoin Development💰
VanEck has pledged 5% of potential profits from its spot bitcoin ETF, if approved, to support Bitcoin core developers at Brink.
Alongside this commitment, VanEck has made an initial donation of $10,000 to Brink.
Brink's Role in Bitcoin Ecosystem
Founded in 2020, Brink focuses on enhancing the Bitcoin protocol through research and development.
It supports the Bitcoin developer community with a fellowship program for new engineers and a grants program for existing developers.
TTD Warning ⚠️
SEC Chair Gary Gensler
"Investments in crypto assets continue to be subject to significant risk."
The same old stuff: Gary Gensler cautioning investors about crypto assets.
“Those offering crypto asset investments/services may not be complying [with] applicable law, including federal securities laws …Investors in crypto asset securities should understand they may be deprived of key info [and] other important protections in connection [with] their investment.”
But that's not what we are interested in
A similar warning was issued by the SEC’s Investor Education account in 2021, a day before the first bitcoin futures ETF application became effective, suggesting Gensler's post might hint at impending positive news.
The SEC is set to rule on Ark and 21Shares’ bitcoin ETF application by Jan. 10.
TTD Selling 🤑
Guess who’s selling more of Coinbase?
ARK Invest, led by Cathie Wood, offloaded 133,823 shares of Coinbase, valued at approximately $20.6 million.
Distribution Across ETFs: The sale was distributed among three of ARK's ETFs:
ARK Innovation ETF (ARKK): 107,151 shares.
ARK Next Generation Internet ETF (ARKW): 15,892 shares.
ARK Fintech Innovation ETF (ARKF): 10,780 shares.
Recent Trading Activity:
ARK also sold 166,000 Coinbase shares on Jan. 3 and 237,000 shares on Dec. 5, 2023.
In total, ARK has netted around $78 million from Coinbase share sales in December and January.
Coinbase's Role in ARK's Portfolio: Despite the sales, Coinbase remains a significant holding in ARK's ETFs, being the largest asset in ARKK, ARKW, and ARKF.
Read: Why does ARK Invest Trim Coinbase Holdings by 133,000 Shares?
TTD Surfer 🏄
Volkswagen plans to integrate OpenAI's ChatGPT chatbot into its cars by mid-2024.
South Korean crypto exchange Upbit has obtained a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS) for its Singapore branch.
The advisory committee for the CFTC urges the government and industry to focus on understanding and developing DeFi in a responsible and compliant manner.
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