Bitcoin ETF race heats up as crypto spot trading volumes rise
Data from CryptoCompare shows that the price of the flagship cryptocurrency Bitcoin (BTC) dropped slightly from around $30,500 to roughly $30,200 over the past week. Throughout the week BTC tested the $31,000 mark twice but failed to remain above it.
Ethereum’s Ether, the second-largest digital currency by market capitalisation, dropped steadily throughout the week, starting it off at around $1,950 and ending at $1,860.
Headlines in the cryptocurrency space this week focused on the Chicago Board Options Exchange (Cboe) updating its regulatory filings for proposed spot Bitcoin exchange-traded funds (ETFs), which apply for the filings of the Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, WisdomTree Bitcoin Trust, and Wise Origin Bitcoin Trust.
These updated filings came on the heels of reports indicating that the U.S. Securities and Exchange Commission (SEC) communicated that the recent spot Bitcoin ETF filings from BlackRock, Fidelity, and others weren’t “clear and comprehensive.”
The revised filings, it’s worth noting, mention surveillance sharing agreements with the Nasdaq-listed cryptocurrency exchange Coinbase, as does a revised application to list the spot Bitcoin ETF from BlackRock, the world’s largest asset management firm.
As the race for a spot Bitcoin ETF heated up, spot trading volumes on centralized cryptocurrency trading platforms rose 16.4% to $575 billion last month, marking the first volume increase seen in three months. Trading volumes, however, remain at historically low levels, recording the lowest quarterly volumes since Q4 of 2019, according to CCData’s latest Exchange Review report.
The report details that the combined spot and derivatives trading volumes on centralized exchanges rose 14.2% to $2.7 trillion in June. Volumes rose even as the SEC pursued legal action against leading cryptocurrency exchanges Coinbase and Binance.
Notably, leading cryptocurrency exchange Binance saw a number of key executives leave the firm last week, including its Chief Strategy Officer, General Counsel, and a Compliance Official.
Following these departures Changpeng ‘CZ’ Zhao, co-founder of Binance, sought to alleviate public concerns about the future of the platform in light of intensifying regulatory oversight, insisting the firm continues to build and hire.
BlackRock CEO sees potential in Bitcoin
The CEO of the world’s largest asset manager BlackRock, Larry Fink, has said Bitcoin and other cryptocurrencies could transform the financial system. In an interview, Fink said tokenising assets and securities was a way to achieve this.
The CEO of the near $10 trillion asset manager had in the past shown skepticism towards cryptocurrencies, saying these were mostly used for illegal activities. During the interview, Fink also highlighted Bitcoin’s role as a global asset that can hedge against inflation and currency devaluation, saying:
“Instead of investing in gold as a hedge against inflation, a hedge against the onerous problems of any one country, or the devaluation of your currency whatever country you’re in – let’s be clear, bitcoin is an international asset, it’s not based on any one currency and so it can represent an asset that people can play as an alternative.”
His words come after BlackRock’s iShares unit applied for a spot Bitcoin ETF with the SEC on June 16. The filing reignited institutional interest in the cryptocurrency space, to the point that the ProShares Bitcoin Strategy ETF, which uses futures contracts to provide exposure to the cryptocurrency, has seen inflows of $14.9 million on June 29, and $11.9 million on July 3 to the point its assets under management are now at $1.04 billion.
Bitcoin and Ethereum supply on exchanges dropped in June
Over the week a report from Goldman Sachs citing on-chain data revealed that the supply of both Bitcoin and Ethereum on cryptocurrency exchanges contracted in June, as investors gravitated towards self-custody solutions as regulations ramped up.
The report detailed that the supply of BTC tumbled by 4% on exchanges, to approach levels seen in December 2002, the lowest level seen since November 2020 ahead of the 2021 bull market.
The report from Goldman Sachs also observed that Ether’s supply on exchanges decreased by 5.8%, attaining a level that has not been seen since May 2018. Per the bank, staked Ether withdrawals have “led to investors’ preference to stake ether, instead of passively holding on exchanges.”
Goldman Sachs also noted that June experienced an unprecedented volume of Bitcoin inventory sales by miners, who capitalized on the opportunity provided by the cryptocurrency’s positive price performance. The total monthly inflow of Bitcoin from miners to exchanges almost doubled from the previous month, reaching $99 million
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
Featured image via Unsplash.