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As the U.S. Securities and Exchange Commission waits for a response to the spot bitcoin ETF applications, a deadline is approaching for at least one. By Jan. 10 the SEC will have to decide if it approves or rejects Ark 21 Shares application. It may also approve all final applications if they are satisfied by then. Bitcoin is consolidating as it waits for clarity regarding the decision. It reached a high in 21 months. After dropping to $43,400 at the weekend, bitcoin rose 2% on Monday to reach $45,000. LMAX Digital warned that if the SEC doesn’t approve spot ETFs by this week there could be significant price drops. However, they also noted that any price declines would be well supported over $30k in the year 2024.

The odds that a bitcoin ETF will be approved in the U.S. are now more than 90%. Crypto market participants on betting platform Polymarket, however, have become more pessimistic and lowered the odds to only 85% In a post published Saturday, Bloomberg ETF Analyst Eric Balchunas stated: “I’m probably going with 5% right now.” The odds of the SEC rejecting proposals have risen to more than 90%, according to two influential analysts at Bloomberg. Crypto market participants at betting platform Polymarket are now even more pessimistic and reduced the odds to 85%.

ARK Invest has sold a total 133,823 shares of Coinbase (COIN), which closed at $153.98 last week. ARK Invest’s goal is to ensure that no single stock exceeds 10% of the value of an ETF. COIN’s price more than doubled during the last three month of 2023. This coincided with ARK’s consistent sales of shares of the crypto exchange. The Innovation ETF (ARKK) is the largest holder of Coinbase shares, with over $850,000,000 worth of COIN. This latest sale brings the weighting to 10.04 percent, which suggests that ARKK’s sales could be ending, despite another boost in Coinbase share price.

Chart of the Day

  • The chart displays the changes in implied volatility derived from bitcoin option expiring on February 23. The implied volatility is the market’s expectation of price volatility over a certain period.
  • The curve has been steadily moving higher in recent weeks. This is a sign that traders are preparing themselves for greater price volatility ahead of the expected U.S. SEC acceptance of one or more ETFs on spot by January 10.
  • Source: Amberdata

– Omkar Godbole

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Sheldon Reback is the editor.