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Bitcoin (BTC-USD) is set to rise at 2.8% on a weekly basis, in a week that saw the SEC approve applications for eight exchange-traded funds that invest directly in Ether (ETH-USD) in a landmark decision.
“The market wasn’t expecting ETH approval till Monday evening, when a Bloomberg ETF analyst raised the approval likelihood from 25% to 75%. ETH price recovered the loss (Mar-May) within 24 hours,” Lucy Hu, Senior Analyst, Metalpha, said.
The SEC approved applications from Nasdaq (NDAQ), Intercontinental Exchange’s (ICE) NYSE, Cboe Global Markets (CBOE), and five others to list exchange-traded funds that invest directly in Ether (ETH-USD)
ETFs that got approved still need a separate green light from the SEC before the products can go live, the deadline of which has yet to be set.
Standard Chartered expects the approval to lead to inflows of $15 billion-45 billion in the first 12 months, adding “This could drive ETH to the $8,000 level by end-2024 and the $14,000 level by end-2025.”
However, Ether (ETH-USD) fell after the approval in a “buy the rumor, sell the news” move as the crypto had gained around 20% this week amid speculation over the SEC’s decision.
“Analyzing Bitcoin’s (BTC-USD) price action reveals an initial strong performance, a “sell the news” dip, and a subsequent rally. ETH’s ETF approval is likely to result in similar price action,” SA analyst Growth Arcane said.
We recommend buying dips. The “sell the news” event and potential Grayscale outflows, should they occur, could present attractive buying opportunities, Growth Arcane added.
Bitcoin (BTC-USD) caught a bid on Monday as it went above the $70K mark, leaving behind the subdued price action of the past few days.
The oldest cryptocurrency, however, failed to hold on to the $70K mark and retreated below it on Wednesday. BTC along with Ether (ETH-USD), however, saw wild swings on Thursday before the eventual approval of spot Ether ETFs.
“Bitcoin’s short-term price action will continue to fluctuate, but its long-term value proposition as a scarce digital asset in a macro-environment where fiat currencies continue to be debased, remains attractive,” said Cory Klippsten, CEO of Swan, a Bitcoin (BTc-USD) financial services firm.
“However, as the U.S. inflation concern resurfaces, the 2-year rate was up almost 10bps after the PMI number last night, and crypto assets took a hit together with other risky assets,” Hu added.
Data from S&P Global showed that U.S. business activity in May grew at its fastest rate since April 2022. Input prices also continued to rise sharply in May, with the rate of inflation accelerating to register the second-largest monthly increase over the past eight months.
Notable News
- The U.S. Supreme Court ruled against Coinbase Global (COIN) in a case where the cryptocurrency exchange contended that disputes about a sweepstake it ran should only be settled by arbitration.
- A state appeals court in Florida overturned an emergency license suspension of Binance in the state on Wednesday, saying that the Office of Financial Regulation (“OFR”) didn’t follow proper procedure in suspending the cryptocurrency exchange.
- Sam Bankman-Fried is being transferred to a new prison, a process that started early Wednesday.
- Failed cryptocurrency lender Genesis won court approval of its bankruptcy liquidation plan to return about $3B in cash and crypto to its defrauded customers.
- Michael Sonnenshein is stepping down as CEO of Grayscale Investments to “pursue other interests,” the cryptocurrency asset manager.
Bitcoin, Ether prices
Bitcoin (BTC-USD) was up 2.3% to $68.9K at 3:11 pm on Friday, and Ether (ETH-USD) was down ~1% to $3.7K.
