In the dynamic world of cryptocurrencies, the approval of an ETH futures ETF has significantly reinvigorated trading sentiment. While the SEC remains guarded regarding BTC spot ETFs, its decision on ETH has left a substantial impact on the market, signaling a robust faith in the crypto realm.
The SEC's Calculated Move
Last week, despite mounting pressure from US legislators, the SEC showed no haste in approving spot BTC ETFs. A series of proposed spot BTC ETFs from major institutions like ARK, Global X, BlackRock, Valkyrie, and Bitwise experienced postponements. This trend strongly hints at potential delays for the results of other pending BTC ETF applications set for mid-October deliberation. Unsurprisingly, VanEck and ARK's spot ETH ETFs also experienced delays. SEC Chief Gensler, speaking before the House Financial Services Committee, voiced his concerns regarding the management of customer funds by crypto firms. His emphasis on the risks of commingling assets signaled the SEC's cautionary stance.
Moreover, the SEC announced further proceedings to assess whether spot BTC ETFs, proposed by big players like BlackRock, Invesco, Valkyrie, and Bitwise, should be greenlit or declined. This indicates a more extended reflection period for these applications.
BTC's Resilience Amidst Stock Market
Tremors While the SEC's decision could have dampened spirits, BTC displayed remarkable resilience. Even amidst stock market turbulence, BTC's price surged, a trend we previously anticipated. Factors such as regular BTC purchasers, like MicroStrategy's additional investment of $147.3 million in BTC, played a role. As of 24 September 2023, MicroStrategy's total BTC investment stood at a staggering $4.68 billion.
Moreover, the commitment of long-term BTC holders played a pivotal role in BTC's robustness. Nearly 75% of BTC's circulating supply, equivalent to 15 million units, remains with these holders, preventing a supply surge that could depress its price. Tether and its Implication on Crypto Prices The BTC wallet growth, especially those holding between 10 to 10,000 BTC, has reached unprecedented levels this year, locking approximately 13 million BTC units. Concurrently, the amount of USDT held by major players soared to a 6-week peak of $15 billion. This increase in reserves, whether motivated by potential fears of a US government shutdown or not, alludes to a strengthened buying potential, which could further bolster crypto prices.
ETH & Altcoins
While the BTC ETF saga continues, ETH stole the limelight with the SEC's approval of Valkyrie's ETH futures ETF. This pivotal move saw ETH prices soaring, with a 10% jump post-announcement. This bullish trend wasn't restricted to ETH alone. Altcoins like BCH, LINK, MKR, and RUNE saw upticks, hinting at a potential market shift.
In a similar vein, XRP surged 20%, possibly in anticipation of Ripple's "Proper Party" event. However, its sustainability largely hinges on Ripple's announcements post-event.
Market Consolidation and the BTC
Barrier While traders remain optimistic, the rapid rise in funding rates indicates potential market consolidation. Especially with BTC nearing its crucial $28,000 mark—a threshold it couldn't breach in August. Yet, with BTC surpassing the $27,500 barrier from mid-September, the trend for October appears bullish, which could inevitably support altcoin prices.
Traditional Markets
A Rocky Terrain Last week, traditional stock markets were on shaky ground. Economic indicators, like home sales and consumer confidence, suggested worsening conditions, causing anxiety. The stock market's performance for September was its weakest this year, further fueling concerns. Precious metals like gold and silver also declined, and the US dollar saw an upward trajectory.
Oil prices remained stable, with traders in anticipation of the upcoming OPEC+ meeting. As China preps for the Golden Week holiday, the US managed to temporarily circumvent a government shutdown, extending its deadline to 18 November. This development has been received positively by US stock futures, but its long-term implications remain uncertain.
With a bustling week ahead, featuring crucial employment data releases in the US and pivotal monetary policy meetings by central banks of Australia and New Zealand, all eyes are set on global financial markets' next moves.
