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GBTC and futures markets show bullish signals
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This week we evaluate what the market is telling us in anticipation of a potential Bitcoin ETF being approved. We review GBTC’s performance, signals coming from futures markets, the bullish reaction to the Ripple hearing and on-chain momentum forming within the crypto market.
Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Bitcoin fees dropped to their lowest since March, despite transaction activity rebounding
- ETH fees dropped slightly compared to the previous week, though they accelerated sharply on Thursday afternoon
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
- Bitcoin and Ether recorded negligible outflows from CEXs
Analyzing Bitcoin’s ETF Odds
30 days after Blackrock’s filing for a spot Bitcoin ETF, sentiment has shifted dramatically in the crypto space. Bitcoin and Ether prices are up 22% and 15% respectively, while many altcoins are up significantly more following Ripple’s win against the SEC.
With the market outlook taking such a u-turn within the month since Blackrock’s ETF application, it’s worth reviewing its status and what odds the market is giving a potential approval. A great point to start is by looking at GBTC’s price action.
Via ITB’s Free Capital Market Insights
GBTC Discount Reaches Yearly Lows — The discount of Grayscale’s Bitcoin Trust reached the lowest it has been since May 2022
- GBTC’s price is up by 60% over the past 30 days, compared to Bitcoin’s 22%
- The GBTC discount has recovered from -50% in December to -26% currently
- GBTC’s outperformance since the Blackrock application is likely a signal that the market not only believes that its ETF will pass, but also that GBTC has decent odds at winning its case allowing it to convert into an ETF
- Following the Ripple news on Thursday, the GBTC discount narrowed even further, potentially suggesting that the market is betting on the SEC easing off its pressure against crypto after losing their securities case with Ripple
This has led to positive sentiment for crypto in the US growing, as echoed by futures market data.
Via ITB’s Bitcoin futures indicators
The CME Premium — Since Blackrock’s filing, the price of Bitcoin futures on the CME has been consistently higher than on international futures exchanges
- All major futures contracts expiring at the end of the quarter are currently in contango, being priced at a premium relative to spot markets
- This premium has also been increasing (typically it reduces as the expiration date approaches), showing strong optimism in the market
- The CME’s premium accelerated sharply on Thursday, suggesting that American investors were particularly bullish following the Ripple ruling
This sentiment is also being reflected on-chain, where momentum has shifted to the bulls.
Via ITB’s Bitcoin financial indicators
Only 20% of BTC Holders Losing Money — Just about 1/5th of Bitcoin holders are currently losing on their positions
- This percentage is the lowest since April 2022, when Bitcoin was at $44,000
- Since then the number of addresses profiting has grown by over 5 million, showing that many addresses were eager to double down on Bitcoin below $30,000
- The total number of Bitcoin holders has also grown since the Blackrock ETF application, suggesting more are looking to accumulate prior to a potential launch
We should be finding out by September 2nd whether the SEC decides to accept, reject or postpone their decision regarding Blackrock’s Bitcoin spot ETF. It is also possible that Ark’s Bitcoin ETF application gets approved earlier as its next decision deadline is on August 13. Though the final decision from the SEC remains uncertain, on-chain and markets data indicate that investors see high odds of the ETF being approved relatively soon.
Analyzing Bitcoin’s ETF Odds was originally published in IntoTheBlock on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.