Wednesday, 20 October 2021

Market Summary

Market Summary 20 October 2021

Market Creeps Higher as Bitcoin Futures ETF Debuts

  • All eyes are on Proshare’s Bitcoin Futures ETF today, the first Bitcoin-linked ETF in the US, as it made its trading debut. Over $1B worth changed hands on its first day (including after-hours trading volume). Spot BTC remains steady in the ~$63-64k range, but has yet to break above its prior all-time high near ~$65k. Finally, the Valkyrie Bitcoin ETF launch—due to debut tomorrow with the memorable ticker BTFD—underscores this week’s focus on new financial products.
  • GBTC is currently trading near its steepest discount of the year on the back of the ProShares Bitcoin Futures ETF launch today.
  • Today, Grayscale filed to convert GBTC into a Spot Bitcoin ETF, probably in reaction to competition posed by the Proshares and Valkyrie ETFs. If successful, the discounts seen on GBTC will be cleared quickly as ETFs tend to track their underlying much more closely.
  • Transactions on the Terra Blockchain have increased considerably since the middle of the year.
  • This growth comes on the back of several new protocol launches including Nexus Protocol, Valkyrie Protocol, and a bunch of NFT mints over the last few weeks.
  • Binance just announced their largest ever BNB burn at $635.44m in the 3rd quarter of 2021.
  • An important point to note is that the formula for Binance quarterly token burns are not specifically disclosed, hence it is difficult to ascertain whether the burns are a direct result of higher trading volume and revenue. FTX  burns FTT equal to a third of exchange fees while Huobi dedicates 15% of total revenue to HT burns, drawing a direct correlation between the two.
  • Both Binance and Huobi have been plagued with regulatory issues in China over the last month, with the former announcing restricted access for mainland customers last week and Huobi halting new registrations for Chinese users in September, in compliance with Beijing’s crypto ban.
  • Alameda Research has proposed a $180m token swap of FTT and BIT to the BitDAO Treasury, with a commitment of not to sell for 3 years.


Bitcoin futures ETF debuts with highest ever first day ‘natural’ volume of $1B

  • ProShares’ Bitcoin Strategy exchange-traded fund (BITO) saw the highest ever first day “natural” volume for an ETF, with the figure reaching a little over $1 billion by the end of the opening day.
  • It is second overall, tailing just behind the Blackrock US Carbon Transition Readiness ETF which booked $1.16B in volume on its debut in April.
  • The ProShare’s Bitcoin futures-based ETF launched on the New York Stock Exchange (NYSE) on October 19 with an opening price of $40.88. According to data from TradingView, BITO closed the day at $41.94 with a total of 24.313 million shares changing hands, equating to a first-day volume of just over $1 billion.


Cosmos announces launch of new blockchain, Sagan

  • The Cosmos cross-chain network is building a new blockchain aimed at allowing developers to experiment with different protocols.
  • In its quarterly keynote report published on Tuesday, Cosmos said its Sagan blockchain was currently in development. The project teased the release of the blockchain in a video message with a quote from famous astronomer Carl Sagan and a picture of a canary among the stars.


Crypto market cap breaks $2.5T — Is this the season for ETFs?

  • The total cryptocurrency market capitalization broke $2.5 trillion as the United States Securities and Exchange Commission seems to be open to approving additional crypto futures-linked exchange-traded funds.
  • According to data from Cointelegraph Markets Pro, the value of all cryptocurrencies has more than doubled since hitting a $1 trillion market capitalization in January. The prices of Bitcoin (BTC) and Ether (ETH) rose to more than $63,000 and $3,800, respectively, as the total crypto market capitalization dipped its toes above $2.5 trillion.


Grayscale starts the clock on SEC decision to convert GBTC to an ETF

  • NYSE Arca has filed to list Grayscale’s proposed bitcoin exchange-traded fund, starting the clock on a decision from the Securities and Exchange Commission (SEC).
  • Grayscale was said to be ramping up its efforts to convert its flagship fund, the Grayscale Bitcoin Trust (GBTC), into an ETF this July. It announced it would offload fund account and administration functions to BNY Mellon in October. At the time, CEO Michael Sonnenshein said engaging BNY Mellon was an important milestone for converting the trust.

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