The expected approval of a Bitcoin spot ETF sparked excitement in the market, spurring Bitcoin to break through the important $47,000 mark.
The management company is fighting a battle to reduce ETF service fees. And the initial participation of American institutions in Bitcoin ETFs, I think they are very serious. In order to achieve this goal, they made huge concessions. The so-called seed funding means that when the Bitcoin ETF is first launched, the management company needs to hold Bitcoin. For example, Wynek originally planned to invest $10 million, but actually invested $72.5 million. This is very important because it is a sign that a Bitcoin ETF is likely to attract a lot of money and attention when it is just starting out. Weyneck prepared 7x more Bitcoin ETF funding than expected, suggesting that they are anticipating a significant inflow of funds that will push Bitcoin higher**. Weyneck has prepared 7 times more Bitcoin ETF funding than expected, suggesting that they are expecting a large inflow of funds that could generate a certain level of premium.
In yesterday's interview, Matt Hogan, CIO of Beatwise, spoke about the fee structure and market reaction to the newly launched crypto ETF. He believes that the less investors pay, the more they can keep their earnings. From this point of view, institutions like Black Rock ARC may have an advantage due to their lower ETF fees. Regarding the grayscale aspect, they have reduced their fees to 15%, Hogan did not comment on competing products. Still, I think the service fee charged by Grayscale is still the highest of all the products. I'm curious if Grayscale will continue to reduce its ETF fees in the future. In addition to this, Hogan mentioned other cost factors, such as spreads and premium discounts, and said that investors need to consider the total cost of the ETF, including fees and trading fees. The Bitcoin market is a highly liquid market with institutional players participating. We hope that this re-created content meets your requirements. He expressed confidence in the liquidity of the market, but also acknowledged the need to see how the market is ultimately positioned. This involves factors such as spreads, premiums, and discounts. According to the requirements of the SEC in the United States, future spot bitcoin ETFs will be cash-based, which means that investors will receive an equal amount of cash when redeeming spot bitcoin ETFs, which is different from buying bitcoin directly. For investors, it is obviously better to buy and save bitcoin on their own.
In addition, spot bitcoin ETFs generally refer to trading during ** trading hours, usually weekday trading hours, while the bitcoin market operates 24 hours a day, including weekends and holidays. If Bitcoin experiences significant volatility over the weekend or when other markets are closed, the ETF's may not be able to reflect these changes in a timely manner, and the ETF's may see a sharp correction once the market reopens. If Bitcoin changes significantly before the market opens, the spot Bitcoin ETF will have a sudden correction when the market opens. Spot ETFs based on the cash redemption model may suffer losses due to the redemption of Bitcoin, as the redemption is usually consistent with the spot of Bitcoin. Whether a spot ETF will be at a premium or discount depends on market supply and demand. Now that the probability of a spot ETF being approved is high, the next step may be to keep an eye on the inflows.
According to a report by CoinShares, in the first week of 2024, digital asset investment products attracted a total of 1$5.1 billion in inflows, of which Bitcoin attracted the lion's share of the inflows, amounting to 1$1.3 billion. However, products related to Bitcoin shorting saw an outflow of $1 million this week. Ethereum, on the other hand, saw an inflow of $29 million. Butterfell, the report's authors, noted that this could indicate a boost in the market's confidence in Ethereum. Solana, on the other hand, has not had a great start to 2024, but altcoins such as Cardinal **Alanche and Light Coin have seen significant inflows, $2 million and $1.4 million.
Standard Chartered expects the possibility of approving a spot Bitcoin ETF this week, which could be a significant turning point. It is expected that in 2024, these could attract up to $50 billion or even $100 billion in inflows. This is based on an analysis of the ETF's history and consideration of existing market conditions.
Standard Chartered Bank believes that looking back on history, ETFs have achieved 43 times the growth. Their **Bitcoin** could reach $200,000 by the end of 2025.
Sister Mu expressed a new point of view in an interview with CNBC, she believes that there is a high probability that the spot bitcoin ETF will be approved, and bitcoin will also be significantly approved. She believes the SEC's approval will be a green light signal for institutional investors. Although she had expected a "sell news event" before, she has now changed her perspective and believes that this may not happen.
She also mentioned that the total number of bitcoins has reached 19.5 million, of which about 15 million are held by long-term holders and have not been moved for more than 155 days. The total amount of bitcoin is capped at 21 million, which makes bitcoin a scarce asset. Given that Bitcoin is considered a number, its market capitalization is around $800 billion compared to a market capitalization of $12 trillion. If the allocation ratio of institutional investors can reach 25% to 5%, Bitcoin will be further along.
Overall, these well-known banks or institutional investors are mostly optimistic, but they also need to be wary of surprises, especially if market sentiment is high. Sudden events can trigger big swings, and as I said before, I'm no stranger to Bitcoin that volatility has reached 5% recently.
Next up for the big news to watch out for is likely to be US Treasury Secretary Janet Yellen's quarterly refinancing announcement, which is expected to be released on January 29. In the wake of the pandemic, three months of borrowing demand, bond auction size and maturity have all attracted more attention due to a surge in debt and spending. In August last year, the Treasury Department said it would increase sales and grow further, and then on Nov. 1 it said it planned to borrow $776 billion for the quarter, well above expectations. This, coupled with a slowdown in the sales of 10-year Treasuries, has triggered upward pressure on yields and could slow the upward momentum in risk assets, especially if long-term interest rates rise, which could reduce demand for riskier assets. This is also a dynamic event that I will continue to follow this month. Note, though, that the upcoming announcement may show higher-than-expected borrowing demand and more 10-year Treasury sales, which could put downward pressure on benchmark yields. This supportive yield movement is likely to increase market momentum.