“What we saw is that Bitcoin can be both a risk-on and a risk-off asset. It can be used for both inflation and in fears of deflation.” – Tom Staudt, COO of ARK
Biweekly News Roundup
1. Spot Bitcoin ETFs and Regulatory Developments
On Jan. 10, eleven spot Bitcoin ETFs were approved by the SEC after months of speculation and waiting, bringing BTC to mainstream institutions for the first time. Spot Bitcoin ETFs trades volume surpasses $1.6B within minutes of launch, with BTC rallying to nearly $49K and ETH hitting a 12-month high. The total volume of spot Bitcoin ETFs reached more than $4.5B in total volume for day one trading. Even BTC tumbled below $42K on Jan. 12, plunging almost 10%, the listing of ETFs based on spot BTC is both a milestone for Bitcoin and Wall Street. The CEO of BlackRock backed the notion of an ether ETF a day after the much-anticipated bitcoin ETF went live.
2. Bitcoin Market Trends and Projections
On January 1st, Bitcoin kicked off 2024 by surpassing $45,000 for the first time in 21 months. Celebrating its 15th birthday on Jan. 3, BTC experienced a flash BTC price weakness that sparked half a billion dollars of crypto-long liquidations. Applications for the spot Bitcoin ETF got full approval from the SEC on Jan. 10 and started trading on Jan. 11. BTC rallied over 60% in the three months leading up to the ETF launch. An asset without jurisdiction, without controller, without issuer other than a strip of code is now accepted in the highest echelons of finance, by the largest fund managers in the largest financial market in the world. In just 15 years, that is an astonishing progression. Since the Winklevoss filed unsuccessfully for the first Bitcoin ETF in July 2013, spot Bitcoin ETF approval has marked conclusion of a decade-long journey. Bloomberg analyst James Seyffart believes there will be $10B in inflows to Bitcoin ETFs in the first year. Cathie Wood said that BTC could reach $1.5M in price by 2030, raising her estimate by 50% from a previous prediction of $1M. Standard Chartered Bank recently predicted that the price of Bitcoin could rise to levels closer to $200K by the end of 2025.
3. Cryptocurrency Investment Trends
Crypto investment products saw inflows totaling $243M in the final week of 2023, bringing the total flows of the year to $2.2B, according to CoinShares. The crypto developments in 2023 signaled a maturation of the market and an ongoing transition to an institutional landscape. This transition and broadening of the ecosystem towards more traditional, more regulated market participants is expected to lie at the core of the narrative for the next market cycle. It is expected that these characteristics will enhance the appeal of Bitcoin, positioning them as attractive, liquid alternatives and diversifiers within investment portfolios, offering a balance to traditional bonds and unleashing demand for Bitcoin-tied solutions, accelerating innovation in the Bitcoin ecosystem. Between 2014 and 2023, a standard 60/40 asset allocation portfolio, rebalanced quarterly without Bitcoin, yielded a 71% cumulative return. However, adding a mere 5% allocation of Bitcoin to this portfolio would have boosted the return to 157%, illustrating Bitcoin’s remarkable effect in enhancing portfolio performance.
4. Corporate Developments in the Crypto Industry
On Jan. 11, Reuters reported that Circle’s IPO filing is part of the company’s plans to become a publicly traded firm. However, Circle did not reveal the proposed price range for its IPO filing or the number of shares that it planned to sell. BitMEX has organized a mission to land a physical Bitcoin on the moon, with the scheduled landing set for Feb. 23.
5. Advancements in Consumer Technology
The CES consumer tech convention concluded its 4-day event in Las Vegas on Jan. 12. It showcased the latest in virtual reality, robots, and AI, with a focus on new metaverse technology. Highlighting future trends, Microsoft announced a new “AI Copilot” key for Windows keyboards, the first key addition since 1994’s “Windows” key. The WEF also noted that AI offers productivity benefits and breakthroughs in fields as diverse as healthcare, education and climate change.