This week has unfolded some intriguing developments in the crypto space, particularly in the domain of Bitcoin-Spot Exchange-Traded Funds (ETFs), a pivotal area for both institutional and retail investors. Amidst a backdrop of fluctuating prices for Bitcoin (BTC), the resilience and strategic movements within the BTC-Spot ETF market have caught the eyes of many.
Bitcoin and crypto ecosystems sign up for forced growth
As we march deeper into 2024, the dynamics within the cryptocurrency market have showcased not just organic growth but signals of what many are beginning to describe as “forced growth.”
Forced growth in business and economics refers to a situation where an entity, be it a company, economy, or market sector, undergoes accelerated expansion through externally applied pressures rather than natural market demand or organic progressions. This concept can be applied in various contexts, including corporate strategies, economic policies, or technological advancements, to stimulate rapid development or change.
The trajectory of Bitcoin and the wider cryptocurrency market appears to be on a path of deliberate and strategic growth. The focus on developing decentralized ecosystems and attracting skilled developers is instrumental in pushing the boundaries of what digital currencies can achieve.
However, this forced growth also brings its set of challenges, including regulatory hurdles and potential market saturation. With all that said and done, here are some of the top crypto events that shaped the week.
1. Bitcoin ETFs hit new highs
BTC fell 4.44% to $65,989 between Monday (March 11) and Sunday (March 17). Significantly, BTC reached an all-time high of $73,808 on Thursday (March 14), before falling back to below $66,000.
Nonetheless, the BTC-spot ETF market received a net weekly inflow of $2,565.7 million in the week ended March 15. (Market data for Bitcoin-spot ETFs received from BitMEX Research and Farside Investors).
Weekly net inflows to the BTC-spot ETF market set a new record, as did single-day inflows. iShares Bitcoin Trust (IBIT) had a strong week, with net inflows of $2,483.6 million.
Grayscale Bitcoin Trust’s (GBTC) net outflows remained high. Outflows decreased from $1,654.4 million (week ended March 8) to $1,246.1 million (week ended March 15).
Fidelity Wise Origin Bitcoin Fund (FBTC) witnessed net inflows dip from $1,339.6 million to $717.9 million week on week.
Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, noted the strong start of the BTC-spot ETF market. Balchunas shared an ETF table by category, with BTC-spot ETFs outperforming the rest of the field. Significantly, BTC and gold (XAU/USD) hit all-time highs, while gold ETFs saw $5,018 million in outflows year so far.
2. MicroStrategy steals the BTC spotlight
MicroStrategy (MSTR) rose 25.03% in the week ended March 15. MSTR outpaced BTC (-4.44%) and NVIDIA (NVDA), which rose 0.35% in the week ended March 15. The Nasdaq Composite Index fell by 0.70% in the week ended March 15.
On Monday, March 11, MicroStrategy announced the purchase of 12,000 BTC for about $821.7 million. The firm used profits from convertible notes and cash assets, bringing the total hoard to 205,000 BTC.
With the Bitcoin halving event nearing, MicroStrategy has revealed plans to acquire additional BTC in the coming sessions. On Wednesday, MicroStrategy founder and Chairman Michael Saylor announced a $500 million private offering of convertible senior notes. The release was the second in two weeks.
3. Coinbase and the SEC legal battle deepens
On Monday, March 11, Coinbase (COIN) Chief Legal Officer Paul Grewal presented updates on the denied SEC rulemaking petition. Significantly, Coinbase filed an opening brief in the 3d Circuit, appealing the denial of the regulation petition.
Coinbase used the opportunity to query the SEC’s authority in the US digital asset industry. Legal experts said Coinbase provided a more thorough description of an investment contract, increasing the likelihood of a favorable conclusion for the crypto business.
However, Coinbase’s shares fell 5.56% to $242.36 in the week ended March 15. The losses coincided with the cryptocurrency market’s decline in the second half of the week.
4. SEC and Ripple just won’t stop fighting
XRP fell 0.07% to $0.6083 between Monday, March 11 and Sunday, March 17. Despite the fact that the outcome of the SEC v Ripple lawsuit remains undetermined, the loss was minimal.
Following the end of the SEC v Ripple lawsuit, the SEC may appeal the Programmatic Sales of XRP judgment. The SEC’s efforts to appeal the Programmatic Sales verdict continue to be a negative for XRP.
The SEC is unlikely to approve XRP-spot ETF applications until the appeals process is concluded. Legal analysts believe an appeal might push the SEC v. Ripple case into 2025.
5. US inflation continues to be a bother
On Thursday, hotter-than-expected US producer prices for February lowered expectations of a Fed rate drop in H1 2024. US producer prices rose by 1.6% year on year. In January, US producer prices rose 1.0%.
According to the CME FedWatch Tool, the chances of a 25-basis-point Fed rate drop in May fell from 23.2% to 6.4% in the week ending March 15. The Fed’s probability of leaving interest rates at 5.50% in June has risen from 26.6% to 41.2%.
BTC fell to a low of $68,554 on Thursday before retaking the $71,000 level. However, BTC’s losses continued into Friday and Saturday. Bitcoin fell as low as $64,909 on Saturday before stabilizing.
