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Bitcoin held above $46500 on Tuesday after briefly reaching $47,000, as the ETF race intensifies. Bitcoin has gained 5% in the last 24 hours. Most analysts believe that the U.S. Securities and Exchange Commission (SEC) will approve an exchange-traded spot bitcoin fund. However, others do not think this will happen. Youwei Yang is the chief economist of BIT Mining and he told CoinDesk in an email that he believes no spot bitcoin exchange-traded funds will be approved any time soon. Yang believes the SEC will delay approvals by at least 3 months. Yang wrote that “a delay could occur with some excuses or reasons, such as the questioning of manipulative behavior sometimes observed in crypto markets that are still not clear, or its criminal or terrorist activities that some congress members have claimed crypto was involved in.” Matteo Bottacini is a trader with Crypto Finance and believes that the news was already priced in. He said most market participants had been well-positioned since a while, which limited the upside potential.

BlackRock (BLK), and VanEck (one of 13 companies hoping to launch Bitcoin (BTC) exchange-traded funds in the U.S.), filed updated documents on February 2. The filings show that both firms received comments from the Securities and Exchange Commission within the last 24 hours. CoinDesk had reported that the SEC had sent comments to prospective issuers within hours of their Monday filings detailing the fees for the products they were proposing. The latest update on Tuesday includes changes that aim to minimize damage to investors in the event of bankruptcy and to avoid a potential conflict of interest among the ETF authorized participants.

The discount for the Grayscale Bitcoin Trust, the world’s biggest bitcoin fund, has shrunk to its narrowest level since April 2021, ahead of the expected conversion into a spot Bitcoin ETF. According to data, the discount was as low as 5.6% as of Monday, reaching a previous high in June 2021. The fund has been trading at a discount ever since February 2021, reaching a peak of almost 50% in December 2022. However, expectations of an ETF’s approval and increasing bitcoin sentiment have slowly eroded this gap. GBTC closed Monday’s trading at $39 As of Tuesday, each share held $41.86 worth of bitcoin. The trust does not have a built-in mechanism that would keep the GBTC shares price close to the underlying bitcoin value. This allows traders to use discounts and premiums as part of their trading strategy.

Chart of the Day

  • The chart below shows the number “bitcoin ETFs” mentioned on social media and bitcoin’s value since November.
  • After the SEC approved spot exchange-traded fund, the market was dominated by ETF optimism. This led to a ” Sell the Fact ” price drop.
  • By Jan. 10, the U.S. SEC will likely approve at least one spot ETF.
  • Source: Santiment


– Omkar Godbole

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Sheldon Reback is the editor.