A historic development occurred this week as US regulators approved all 11 spot BTC ETF applications. Afterwards, Bitcoin tested the $49,000 mark again for the first time in 24 months. Meanwhile, USDC issuer Circle has filed for its IPO in the US
Developments around the Spot BTC ETF
- This week, the crypto industry awaited a decision from the Securities and Exchange Commission (SEC) on the numerous filings for spot BTC ETF products in the US. Several asset managers seeking to launch the product submitted amendments to include fee disclosures for the products.
- As anticipation grew, SEC Chairman Gary Gensler issued a series of warnings on January 8th
- These warnings had mixed undertones and were interpreted differently by the crypto community. While some commentators assumed this was a signal that the ETFs would be approved soon, others claimed it could be a plan to reject the applications, citing risks in the industry.
Misleading SEC announcement
- On January 9, the US Securities and Exchange Commission's official X account announced that the agency had approved the ETF products. Minutes later, Gensler confirmed that the SEC's account X had been hacked to refute the revelation.
- Due to the false disclosure, the price of Bitcoin skyrocketed and then saw a sharp decline. The crypto market followed suit. Lawyers then revealed plans to investigate a possible case of market manipulation.
- Shortly after the development, some US lawmakers wrote to the SEC demanding a clear explanation of the events that led to the breach of their X account and the subsequent misleading announcement.
- Gensler assured that there were no further breaches of the account.
The SEC approves all spot BTC ETF products
- The withdrawal of the misleading announcement dented optimism about impending approval. However, most experts remained confident. A catalyst for this confidence was the listing of several spot BTC ETF products on CBOE.
- On January 10, the SEC finally announced the approval of all 11 spot Bitcoin ETF applications. The products were expected to begin trading on the CBOE starting January 11, when the U.S. public market opens for trading.
- Despite the approval of the products, Vanguard, the world's second largest asset manager, emphasized its decision to block trading of spot Bitcoin ETFs on its platform because the products do not align with its offerings.
- In a completely opposite move, US-based trading platform Robinhood confirmed that it would approve trading of all 11 spot Bitcoin ETFs on its platform.
- Three days after the SEC approval, BitMEX Research pointed to massive inflows into the products. Data suggests that the products recorded $532 million in inflows on the second day of trading.
South Korea's aggressive stance
- Meanwhile, South Korea's aggressive stance towards crypto ETF products remained unchanged despite developments in the US. Reports confirmed that the country's Financial Services Commission (FSC) reiterated its ban on the product.
- As approved spot BTC ETF products continued to see inflows, South Korea's FSC announced in a statement on January 12 that brokers in the country would be banned from offering spot BTC ETFs to the global market.
Is the Ethereum ETF coming?
- With spot Bitcoin ETFs now on the market, the crypto community is awaiting submissions for spot ETFs in other assets, with XRP and Ethereum (ETH) currently in focus.
- In a CNBC interview following the SEC's approval of Bitcoin ETF products, SEC Chairman Gensler remained cautious when asked about the possibility of an Ethereum ETF. He emphasized Bitcoin's position as a commodity in contrast to other crypto assets.
- However, BlackRock CEO Larry Fink is more open-minded. In a CNBC interview, Fink acknowledged the potential value that could come from a spot ETF on Ethereum.
Bitcoin is testing the price mark again
- Bitcoin experienced mixed sentiments this week amid developments surrounding the ETF discussions. The asset started the week on a positive note, with El Salvador's holdings rising to a $12.6 million gain after being underwater for two years.
- However, after the SEC retracted the misleading statement of a spot Bitcoin ETF approval on January 9, BTC saw a 3% decline. The asset ultimately ended the day down 1.79%.
- After the products were approved on January 10, Bitcoin experienced an impressive rally. The crypto token retested the $49,000 price mark on January 11 and reached $48,975 for the first time in 24 months.
- The recent approval of the spot Bitcoin ETFs and the resulting huge demand contributed to the BTC rally. Additionally, Coinbase’s OTC-BTC trading volume rose to $7.7 billion on January 11, the second highest in history.
- Given the favorable BTC price movements, Cathie Wood, CEO of Ark Invest, predicted bullish predictions for the asset over the next six years. Wood predicted a base case of $600,000 per BTC and a bullish case of $1.5 million by 2030.
Circle files for IPO in the US
- USDC issuer Circle’s plans to go public in the US made headlines this week. Reports on Jan. 11 revealed that the Boston-based company has confidentially filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission following a failed SPAC deal two years ago.
- Meanwhile, American exchange Coinbase has struck a deal to promote USDC adoption in Africa. Coinbase partnered with Yellow Card this week to give millions of Africans access to USDC on its Base Layer 2 network.
XRP’s developments are mixed
- Ripple and XRP experienced mixed developments this week. After Solana overtook XRP on the list of largest crypto assets by market capitalization, the Hong Kong Virtual Asset Rating Agency (HKVAC) announced this week that it will replace XRP with Solana in its index.
- Ripple had reportedly initiated a $285 million share buyback, giving the company a valuation of $11.3 billion. Ripple CEO Brad Garlinghouse also noted that the company has no plans to go public soon.
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