Crypto News

BlackRock's Bitcoin Spot ETF Surpasses Grayscale, Amassing Over 300,000 BTC

Investment powerhouse BlackRock, has seen its Bitcoin Spot ETF (IBIT) now accumulate over 300,000 Bitcoin in Assets Under Management (AUM), surpassing Grayscale's Bitcoin Spot ETF (GBTC). Since its inception on January 11th, 2024, BlackRock's ETF has been steadily gaining ground. As of today, BlackRock holds 302,534 BTC, equating to approximately $21 billion in AUM.

The combined holdings of all 11 Bitcoin Spot ETFs now total a staggering 883,000 BTC, valued at about $63 billion. This represents 4.2% of Bitcoin's total supply of 21 million, highlighting the rapid growth of these funds.

A significant factor contributing to BlackRock's ascendancy over Grayscale is the difference in commission fees. Grayscale charges 1.25%, whereas BlackRock charges a much lower 0.25%, making it a more attractive option for investors. Despite Grayscale's insistence that their fees are appropriate, they have experienced a decline in market share. Although the amount of Bitcoin they hold has decreased, the drop in BTC value has not been as severe due to a 50% increase in Bitcoin's price. However, their AUM has still fallen by about 30%, from $28.7 billion to $20 billion. It remains uncertain whether Grayscale will adjust their fees if their market share continues to decline.

U.S. Spot Bitcoin ETFs have recorded 18 consecutive days of net inflows, collectively adding nearly $1.7 billion in one week. BlackRock's IBIT alone saw inflows of $349.9 million in a single day, while Grayscale's GBTC experienced a net outflow of $37.6 million. These figures underscore the shift from Grayscale to BlackRock in this ETF sector.

Despite the recent surge, combined trading volume remains below the peak of $9.9 billion recorded on March 12th, currently at $1.4 billion. The sustained interest in Bitcoin Spot ETFs demonstrates robust institutional investment. Additionally, the filings for an upcoming Ethereum Spot ETF and discussions about potential other cryptocurrency ETFs indicate strong support and interest in the space.

SEC Signals Prolonged Scrutiny for Ethereum ETF Review

The anticipated early registration of an Ethereum Spot ETF (S-1 reports) has come under scrutiny this week. Securities Exchange Commission (SEC) Chairman Gary Gensler, in an interview with CNBC, provided ambiguous hints about the duration of the review process. Following this interview, a prominent Fox Business reporter interpreted Gensler’s comments as indicating a protracted review period before the ETF's approval.

Both BlackRock and VanEck have submitted their initial paperwork to the SEC. However, these submissions will undergo multiple reviews, during which the SEC will provide feedback and likely request modifications. This lengthy review process contrasts sharply with the expedited approval of the Bitcoin Spot ETF in January of this year. The discrepancy in the review timelines has raised concerns among investors and market analysts alike.

Two weeks ago, Ethereum prices surged when eight companies received ETF approvals. Nonetheless, the markets seemed to overlook the potential for an extended review process, which now appears more probable. Consequently, the likelihood of finalising the ETFs in the short term seems diminished. This unexpected development has led to a reassessment of market expectations and timelines for the Ethereum Spot ETF.

In recent days, most altcoins have experienced a gradual decline. This downturn, combined with stronger-than-expected Non-Farm Payroll numbers—which suggest an early interest rate reduction is unlikely—has negatively impacted the cryptocurrency market. The broader economic indicators are adding to the uncertainty surrounding cryptocurrency investments.

Investors will undoubtedly be closely monitoring the SEC in the coming weeks, searching for any indications of a forthcoming decision. The evolving regulatory landscape and economic conditions will play a crucial role in shaping the future of Ethereum and the broader cryptocurrency market. All eyes will be on the SEC's next moves as they navigate this complex approval process.

Robinhood To Buy Bitstamp In Huge $200 Million Deal

American trading giant Robinhood, known for its user-friendly interface and commission-free trading, has made headlines with its recent announcement of plans to acquire the UK-based cryptocurrency exchange Bitstamp. The acquisition, valued at $200 million in all-cash, was unveiled on Tuesday, marking a significant strategic move for Robinhood as it seeks to bolster its cryptocurrency operations and attract institutional investors on a global scale.

Bitstamp, established in 2011, has built a strong reputation for its commitment to regulatory compliance. Originally founded to challenge the dominance of Mt. Gox in Europe, Bitstamp has since evolved into a leading cryptocurrency exchange. With a platform that supports nearly 100 different cryptocurrency assets, Bitstamp also offers institutional lending and staking services, providing investors with opportunities to earn rewards by locking up their cryptocurrency holdings for predetermined periods.

Robinhood's acquisition of Bitstamp not only signifies its ambitions to diversify beyond the U.S. market but also underscores its commitment to expanding its presence in the European cryptocurrency landscape. By tapping into Bitstamp's established infrastructure and customer base, Robinhood aims to reduce its reliance on domestic markets, where competitors like Coinbase hold significant market share.

Moreover, the acquisition is poised to enhance Robinhood's suite of products and services, positioning the company for further growth and innovation in the burgeoning cryptocurrency industry. This strategic move comes on the heels of Robinhood's introduction of cryptocurrency trading to its platform last December, signalling its commitment to meeting the evolving needs of its user base and staying ahead in a rapidly evolving market.

In conclusion, Robinhood's acquisition of Bitstamp represents a pivotal moment in the company's expansion journey, opening up new avenues for growth and cementing its position as a key player in the global cryptocurrency market.

Crypto Analysis

Bitcoin Market Analysis: Weekly Update (BTCUSDT)

Over the past week, Bitcoin once again demonstrated its unpredictability, leaving many traders and investors surprised. The price came close to setting new all-time highs, reaching a new monthly high of $71,997 on Friday before experiencing a significant drop due to higher-than-expected Non-Farm Payroll numbers. Despite this setback, Bitcoin remains just short of March's all-time high of $73,777. Without Friday's decline, Bitcoin had the potential to continue its upward trend and attack the old high, following four consecutive days of gains and a consolidation day on Thursday.

Current Market Dynamics

Excluding fundamental news and focusing solely on price action, the likelihood of a continued upward trend remains high. There are two bullish scenarios to watch for this week:

1. Break and Close Above Trendline: A break and subsequent close above the downward-sloping trendline, possibly followed by a retest of this trendline.

2. Further Pullback to Horizontal Support: A further pullback to the black horizontal support level, indicated by the blue arrow at the recent swing low.

Technical Indicators and Patterns

The Stochastic RSI is emerging from an overbought region, suggesting that the price could soon rise again. Major moving averages continue to climb, with the price remaining above the 50-day exponential moving average (EMA). Additionally, the inverse Head & Shoulders pattern identified in last week’s analysis has not yet reached its measured objective of approximately $72,188.

Support Levels and Price Action

Examining the 4-hour chart, a significant support level around the $67,000 region is evident, marked by the black horizontal line and multiple blue arrows. Following the bearish 4-hour candle on Friday, there is a strong possibility that the price could consolidate in the current area before retesting the support line. Close monitoring of any further bullish or bearish developments is crucial at this stage. Considering the amount of times price has tested support, another retest cannot be ruled out.

Conclusion

Considering all analyses, the upward trend remains the path of least resistance until a break and close below the support line occurs, as illustrated in the accompanying charts. I look forward to revisiting the Bitcoin chart next week to provide further updates.

Market Analysis Report: Bitcoin Dominance (BTC.D) Excluding Major Stablecoins

This week, we observed a significant development in the Bitcoin dominance chart, breaking above the daily resistance level discussed in last week’s analysis. The breakthrough marks an important shift in market dynamics, warranting a detailed update.

Current Market Dynamics

Last week, we analysed two possible scenarios around the horizontal resistance line at approximately 58%, indicated by blue arrows representing swing highs and lows. The first scenario was bearish, with the price testing and holding at the resistance line. The second scenario anticipated a break above the resistance line, turning into new support. The latter scenario unfolded, resulting in a notable bullish breakout.

Technical Indicators and Patterns

Large green bullish candles marked the breakout above the resistance line, demonstrating strong upward momentum. At the time of writing on Monday morning, the price is breaking to new weekly highs, indicating sustained bullish sentiment.

• Daily Stochastic RSI: Despite being in the overbought territory, the Stochastic RSI can remain overbought for extended periods. This often signals a dominant trend, suggesting continued upward movement in this case.

• Weekly Chart: The weekly chart reveals a robust bounce off the lower trendline of the bearish ascending wedge identified last week. This trendline has provided support approximately seven times since September 2022, underscoring its significance.

Support Levels and Price Action

The recent price action shows strong support at the former resistance level, now acting as a new support. The sustained hold at the weekly highs further strengthens the bullish outlook. The repeated bounces off the lower trendline of the ascending wedge on the weekly chart highlight a key support level, reinforcing the bullish trend and we may now expect a rise to the top of the wedge.

4-Hour Analysis

The recent price movements in the market have shown significant activity, particularly on the 4-hour chart. A notable development is the spike above the 0.618 Fibonacci retracement level. This level is derived from the price swing from May 16th to the swing low on May 29th, which corresponds to a 59.07% retracement. At the current time of writing on Monday morning, the price is once again breaking above this area.

Key Observations:

1. Price Movement:

   1. The price has risen above the 0.618 Fibonacci retracement level, indicating strong upward momentum.

   2. This retracement level is a critical point of resistance, and surpassing it suggests potential for further gains.

2. Potential for Further Gains:

   1. If the price continues to perform well and maintain above this level, there is a significant probability that the market could revisit the swing high observed on May 16th.

   2. Achieving and maintaining this level would be indicative of strong market sentiment and could pave the way for new highs in Bitcoin dominance.

3. Implications for Bitcoin and Altcoins:

   1. A move towards the May 16th swing high would likely result in increased Bitcoin dominance.

   2. This scenario would suggest that Bitcoin may outperform altcoins in the near to medium term.

Conclusion

Considering the breakout above the daily resistance and the strong bullish indicators, the path of least resistance remains to the upside for Bitcoin vs Altcoins. The dominance of the current trend, supported by both daily and weekly technical indicators, suggests that Bitcoin is likely to continue its upward trajectory vs altcoins although at the current time of writing, this is becoming increasingly unlikely. Close monitoring of any new developments is crucial, particularly around the new support level and the lower trendline on the weekly chart.

We look forward to revisiting the Bitcoin dominance chart next week for further updates.

Market Analysis Report: Pepe Coin (PEPE)

Overview

Meme coins have demonstrated a remarkable performance in the cryptocurrency market, especially in contrast to the more established assets such as Bitcoin and a majority of altcoins which are currently experiencing downward trends. Pepe coin has emerged as a leader among these meme coins, consistently achieving new all-time highs.

Pepe Coin: Background and Recent Performance

Pepe coin originated from the comic strip "Boy's Club" by cartoonist Matt Furie. Its rise in the crypto market has been notable, outperforming most assets and becoming a significant player in the meme coin sector.

Pepe/USDT and Pepe/BTC Charts

• All-Time Highs: Both the Pepe/USDT and Pepe/BTC charts have recently hit all-time highs. This indicates a strong upward momentum and investor confidence in the coin.

• Support Levels: The price has bounced off a key support level, identified by a horizontal green shaded zone. This zone is reinforced by three blue arrows marking relevant swing points, suggesting robust support at these levels.

• Moving Averages:

  • 50-day EMA: The price has seen a significant bounce off the 50-day Exponential Moving Average (EMA), which is a positive sign for the continuation of the uptrend.

  • 100-day EMA: The 100-day EMA is also sloping upwards, reinforcing the bullish sentiment.

Stochastic RSI

• Oversold Condition: The Stochastic RSI is in a majorly oversold condition. This technical indicator suggests that the coin is due for a reversal, as the oversold condition often precedes an upward price movement.

Key Signal

• 10-day EMA: A move back above the 10-day EMA could signal the resumption of the primary uptrend. Investors should watch for this indicator as a potential entry point for new positions.

Market Sentiment and Future Outlook

The strong performance of meme coins, particularly Pepe coin, in a generally bearish crypto market highlights their unique appeal and potential for high returns. This performance can be attributed to the community-driven nature of meme coins and their viral appeal.

• Short-term outlook: In the short term, if Pepe coin moves above the 10-day EMA, it is likely to continue its primary uptrend, given the supportive technical indicators.

• Medium to long-term outlook: The consistent upward trajectory of the 50-day and 100-day EMAs, combined with a potential reversal signalled by the Stochastic RSI, suggests a continued bullish outlook. However, investors should remain cautious and monitor key support and resistance levels closely.

Conclusion

Pepe coin's remarkable performance in a challenging market environment underscores its potential as a high-reward investment. The technical analysis indicates strong support levels and potential for further gains, especially if key moving averages are surpassed. Investors should watch for the 10-day EMA as a crucial signal for the continuation of the uptrend. As always, while meme coins can offer significant returns, they also come with heightened volatility and risk, necessitating careful market monitoring and risk management strategies.

In Summary

Recently, there has been a concerted effort to discern whether we are on the verge of an altcoin season. However, given the recent rebound observed in the weekly Bitcoin dominance trendline, confidence in such a scenario is waning, with Bitcoin poised to reclaim its dominance.

Nonetheless, the prospect of Bitcoin reaching new heights remains viable, with the potential for another upward surge this week serving as a potential catalyst. The decline in altcoin performance can be primarily attributed to the sustained influx of investments into meme coins. Against the backdrop of Bitcoin's steady ascent and the persistent uptrend in meme coins, a rotation into altcoins appears increasingly inevitable. It is not a matter of if, but rather a question of timing.

Wishing everyone a prosperous and fruitful week ahead.

Mid-Week Updates

I am delighted to announce that Learning:Crypto will be introducing mid-week updates. This strategic move will enable investors to closely monitor multiple charts as assets reach critical points throughout the week. While the weekly update will continue to provide valuable insights, this additional feature will empower us to evaluate more charts regularly, ensuring we stay abreast of significant developments as they unfold. I eagerly anticipate the launch of this new service in the days ahead.

Macro News & Analysis

To Cut or Not to Cut? All Eyes on the Federal Reserve

The European Central Bank and Bank of Canada both cut policy rates by 0.25% last week, joining Switzerland and Sweden and raising the number of major central banks to cut ahead of the Federal Reserve. The US base rate will be decided on Wednesday, although at the time of writing, CBOE’s FedWatch tool has the probability of a Fed cut at just 0.6%, down from 2.2% likelihood on Friday.

This week’s FOMC meeting includes an updated Summary of Economic Projections (SEP), which contains meeting participants’ projected paths for GDP growth, unemployment rate, and inflation to 2026 and over the longer run. Unless the Fed surprises markets with anything but holding rates—and they don’t like to surprise markets—attention will be focused on the SEP.

Opinion on the US economy remains divided, with highly experienced market participants still split on whether a deflationary recession or structural inflation are the more likely path. Market veteran David Rosenberg maintains his recessionary view and long bond bullish stance, whilst others such as Andy Constan fear the Fed cut too soon, resulting in a resurgence in inflation.

US inflation has fallen more slowly than in other advanced economies, alongside robust economic growth and a tight labour market. Outside of the US, inflation has officially slowed significantly. Once a trend of slower growth and slower inflation is established, this disinflationary trend can rapidly turn into deflation (where an economy shrinks), which is a central bank’s worst-case scenario. Brent Johnson, who proposed the much-talked-about Dollar Milkshake Theory, said in his latest weekly Milkshake Pod, “Deflation is the enemy of central banks”.

So, if this week is off the table, when does the Fed cut? The US presidential election is on 5th November. As illustrated in the table below, that doesn’t leave much room to cut ahead of the election, without being labelled as politically motivated. So if consensus is correct, the US cutting cycle either starts in July’s meeting, or will be held until November or December, if they’re to start this year.

Whilst recent messaging has been on the dovish side, the Fed does have an economic advantage over its central bank peers. Higher rates don’t impact the US consumer anywhere near as much as other major economies. US mortgages are typically offered with 30-year fixed rate terms, whereas most other economies including Canada, Australia, the EU and UK, only offer up to 3-5 years fixed rate terms. This puts significantly more pressure on the non-US consumer and non-US economies.

FDIC Reports $517bn Unrealised Losses; 63 Banks to Brink of Insolvency

According to the Federal Deposit Insurance Corporation’s (FDIC) Q1 2024 report, US banks collectively hold $517 billion in unrealised losses. The report states the number of banks on the “problem bank list” grew to 63, up from 52 in the previous quarter. This comes 15 months after Silicon Valley Bank (SVB) collapsed under similar circumstances.

Banks are required to hold government bonds and mortgage-backed securities on their balance sheets, but not all banks have managed the associated interest rate risk equally. The Fed’s rapid hiking cycle over the last two years has left banks holding bonds with market prices greatly below their purchase price. If a bank holding such assets are forced to sell at market price, they can find themselves unable to meet customer withdrawal demands and the bank goes bankrupt.

As we saw with the failure of SVB and others last year, the government will step in to prevent a domino effect on other at-risk banks. The FDIC and Treasury handled the closure of those banks and the Federal Reserve set up the Bank Term Funding Program, a facility that provided liquidity to other banks that would have suffered the same fate. If any of the 63 banks identified as problems by the FDIC start failing, as happened last year, we can be reasonably confident the Treasury and Fed will step in once again to prevent a situation that could lead to a systemic banking crisis.

Kraken IPO

According to a recent Bloomberg report, long-standing cyrpto exchange Kraken may be considering an initial public offering (IPO), having received inquiries from potential investors as bitcoin and crypto markets near/break all time highs, quoting people “familiar with the matter” who asked to remain anonymous as the “discussions haven’t been made public”.

Kraken would reportedly be looking to raise $100 million, taking advantage of both rising prices and a perceived change of stance from regulatory authorities. The news comes as Robinhood Markets Inc announced their acquisition of crypto exchange Bitstamp Ltd, as Ashley Duke wrote above in his crypto news.

The article reports that whilst Kraken would not comment on the possibility of an IPO, the exchange issued a statement saying they are “always exploring strategic paths toward Kraken’s Mission: accelerating the global adoption of crypto” and that they “remain fully focused on investing in this goal.”

This would make Kraken the second US cryptocurrency exchange to go public, following Coinbase’s (COIN) listing in 2021.

Things I’m Watching

• Australian government passes digital ID bill, trials age verification for porn and social media.

• Ofcom joins global and growing collaboration in online safety regulation.

• BlackRock and Citadel Plan Texas-Based Rival to NYSE [Bloomberg, FT]

• BOJ Eyes Reducing Bond Purchases

• Earnings Revisions Momentum Returns to Positive

The Week Ahead

Events This Week

Monday

• Japan GDP final

Tuesday

• Australia NAB business confidence

• UK jobless claims, unemployment, average hourly earnings

• Brazil inflation

• US 10 year Treasury note auction

Wednesday

• China CPI, PPI

• Korea unemployment

• Thailand rate decision

• India CPI, industrial production

• UK monthly GDP, balance of trade, industrial & manufacturing production

• US inflation, CPI, mortgage applications

• FOMC decision, quarterly summary of economic projections, Fed Chair Jerome Powell’s press conference

Thursday

• Australia unemployment, Westpac consumer confidence

• Eurozone industrial production

• US jobless claims, PPI, 30 year Treasury bond auction

• Fed Williams speach

Friday

• Japan rate decision

• University of Michigan consumer sentiment

• Fed Goolsbee, Cook speak

Earnings Calendar