Bitcoin revisits $49k as it undergoes another round of testing
A momentous event occurred this week as U.S. regulators gave their approval to all 11 spot BTC ETF filings. Subsequently, Bitcoin experienced a retest of the $49,000 level, a milestone not seen in the past 24 months. Additionally, Circle, the issuer of USDC, filed for its initial public offering (IPO) in the United States.
Updates on the Spot BTC ETF
The crypto industry had been eagerly awaiting a decision from the Securities and Exchange Commission (SEC) regarding the multiple filings for spot BTC ETF products in the U.S. Several asset managers who were planning to launch the product made amendments to include disclosures on product fees.
As anticipation grew, on January 8, SEC Chair Gary Gensler released a series of warnings regarding cryptocurrency investments, advising investors to be cautious of the associated risks. These warnings were interpreted differently within the crypto community, with some believing that they signaled an imminent approval of the ETFs, while others thought they might lead to the rejection of the filings due to industry risks.
Misleading Announcement from the SEC
On January 9, the official SEC account announced that the agency had approved the ETF products. However, minutes later, Gensler clarified that the SEC’s account had been hacked, debunking the disclosure. This false announcement caused Bitcoin’s price to surge and then sharply drop, leading to concerns of market manipulation. Lawyers subsequently revealed plans to investigate this potential case.
Shortly after this incident, U.S. lawmakers wrote to the SEC, seeking a clear explanation of the breach and the misleading announcement. Gensler assured them that there had been no further breaches.
SEC Approves All Spot BTC ETF Products
The withdrawal of the misleading announcement dampened optimism about an imminent approval. However, many experts remained confident. One reason for their confidence was the listing of several spot BTC ETF products on the CBOE.
Finally, on January 10, the SEC announced the approval of all 11 spot Bitcoin ETF filings. These products were expected to start trading on the CBOE from January 11, coinciding with the opening of the U.S. public market.
Despite the approval, Vanguard, the second-largest asset manager globally, decided to block trading of spot Bitcoin ETFs on its platform as they did not align with its offerings. In contrast, U.S.-based trading platform Robinhood confirmed that it would allow trading of all 11 spot Bitcoin ETFs on its platform.
Three days after the SEC’s approval, BitMEX Research highlighted significant inflows into these products. Data indicated that on the second day of trading, the products attracted $532 million in inflows.
South Korea’s Stance
Meanwhile, South Korea maintained its aggressive stance on crypto ETF products despite the developments in the U.S. The country’s Financial Services Commission (FSC) reiterated its ban on these products. As the approved spot BTC ETF products continued to attract inflows, the South Korean FSC disclosed in a statement on January 12 that brokers in the country were prohibited from offering spot BTC ETFs from the global market.
Is an Ethereum ETF on the Horizon?
Now that spot Bitcoin ETFs are in the market, the crypto community expects filings for spot ETFs in other assets, with current focus on XRP and Ethereum (ETH).
In a CNBC interview following the SEC’s approval of the Bitcoin ETF products, SEC Chair Gensler remained cautious when asked about the possibility of an Ethereum ETF. He emphasized that Bitcoin was considered a commodity unlike other crypto assets.
However, Larry Fink, CEO of BlackRock, expressed a more open-minded perspective. In a CNBC interview, Fink acknowledged the potential value that could arise from a spot Ethereum ETF.
Bitcoin Retests Price Mark
Bitcoin experienced mixed sentiments this week due to the discussions surrounding ETFs. The asset started the week positively, with El Salvador’s holdings finally turning a profit of $12.6 million after being underwater for two years.
However, after the SEC retracted its misleading statement about the spot Bitcoin ETF approval on January 9, BTC recorded a 3% dip. It eventually closed the day with a 1.79% decline.
Following the approval of the products on January 10, Bitcoin rallied impressively. The cryptocurrency retested the $49,000 price mark on January 11, reaching $48,975 for the first time in 24 months.
The recent approval of spot Bitcoin ETFs and the subsequent high demand contributed to the surge in BTC’s price. It also led to Coinbase’s over-the-counter BTC trade volume reaching $7.7 billion on January 11, the second-highest figure in history.
Amidst the favorable BTC price movements, Ark Invest CEO Cathie Wood made bullish forecasts for the asset in the next six years. Wood predicted a base case price of $600,000 per BTC and a bullish case price of $1.5 million by 2030.
Circle Files for IPO in the U.S.
The news of USDC issuer Circle’s plans to go public in the U.S. gained attention this week. Reports from January 11 revealed that the Boston-based firm had confidentially filed for an IPO with the U.S. SEC, following a failed SPAC deal two years ago.
Meanwhile, American exchange Coinbase partnered with Yellow Card to promote USDC adoption in Africa. This collaboration will grant millions of Africans access to USDC on Coinbase’s layer-2 network, Base.
Mixed Developments for XRP
Ripple and XRP had mixed developments this week. With Solana surpassing XRP on the list of largest crypto assets by market cap, the Hong Kong Virtual Asset Rating Agency (HKVAC) announced that it would replace XRP with Solana on its index.
Reports also revealed that Ripple initiated a buyback of $285 million worth of its shares, valuing the company at $11.3 billion. Ripple CEO Brad Garlinghouse stated that the firm does not have immediate plans for an IPO.
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