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Ethereum ETFs See $500M Inflows as BlackRock and Fidelity Lead Purchases

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BlackRock and Fidelity have significantly increased their Ethereum (ETH) holdings in the past few days, reflecting a surge in demand for ETH exchange-traded funds (ETFs). According to on-chain data, over $500 million in ETH has flowed into these funds recently. This marks a notable acceleration in inflows, surpassing the slower buildup observed in previous months.

Ethereum ETFs See $1.29 Billion Inflows

Ethereum ETFs have seen almost uninterrupted net inflows since November 21, with only a few neutral days. However, the past week has witnessed record-breaking activity, bringing in a total of $1.29 billion. This surge follows the positive market reaction after the U.S. elections, which boosted both cryptocurrency and traditional asset markets.

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Source: CoinAnk

BlackRock and Fidelity are leading the way in Ethereum purchases, with BlackRock’s known wallets now holding over 820,000 ETH. The firm has ramped up its ETH buying, similar to the early hype surrounding the ETF launch earlier this year. Fidelity, on the other hand, has expanded its holdings to more than 114,000 ETH, seeing a substantial increase in inflows after months of relatively slow growth. Both companies have capitalized on the renewed interest in Ethereum as the price hovers just below the $4,000 mark.

BlackRock and Fidelity Drive Ethereum ETF Growth

The growing interest in Ethereum ETFs coincides with the bullish sentiment in the broader crypto market. The total assets managed by BlackRock’s Ethereum ETF have surged to $3.55 billion, while Fidelity’s ETF has grown to $1.56 billion. Grayscale, despite recent restructuring, still holds the largest amount of ETH, with its Ethereum Trust managing $5.56 billion in assets. Grayscale has reduced its selling activity, contributing to the more optimistic outlook for ETH.

Market observers suggest that Ethereum’s relatively low inflation rate is another factor driving interest in its ETFs. ETH’s annual inflation rate has dropped significantly from a peak of 0.6% to just 0.12%. This reduction has helped position ETH as a more scarce asset, with only 3,569 ETH being minted each week, down from over 17,000 earlier this year.

Despite these positive developments, the Ethereum network itself remains somewhat controversial. Technical issues persist, and many industry insiders remain cautious about the network’s future. Ethereum continues to serve as the backbone for the Layer 2 ecosystem, but its base layer is not producing significant new inflows, as most of the activity now occurs on Layer 2 platforms and decentralized applications.

BlackRock and Fidelity Spark Ethereum (ETH) Bullish Surge with $500M Purchase

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  • BlackRock аnd Fidelity аcquirеd $500 million in Ethereum (ETH) within two dаys, showing institutionаl intеrеst.
  • BlackRock’s iShаrеs Ethеr Trust ETF lеаds with $2.93 billion, whilе Fidelity’s Fund hаs $1.35 billion.
  • Ethеr’s bullish signаls, including а “Goldеn Cross,” suggеst potеntiаl growth towаrd $5,000, аnаlysts prеdict.

Exchаngе-trаdеd funds undеr BlackRock аnd Fidelity hаvе mаdе а mаssivе movе in thе cryptocurrеncy mаrkеt by аcquiring $500 million worth of Ethereum in just two dаys, аs rеvеаlеd by thе crypto аnаlytics plаtform Arkhаm. This substаntiаl purchаsе, cаrriеd out through Coinbаsе аnd its institution-focusеd plаtform Primе, undеrscorеs growing institutionаl intеrеst in Ethereum.

Thе rеcеnt аctivity follows thе SEC’s Mаy аpprovаl for Ethеr ETFs. BlаckRock’s iShаrеs Ethereum Trust ETF (ETHA) lеаds with $2.93 billion in inflows, whilе Fidеlity’s Ethereum Fund (FETH) trаils аt $1.35 billion. On Dеcеmbеr 10, ETHA аnd FETH rеcordеd $372.4 million аnd $103.7 million in trаding volumеs. Such invеstmеnts suggеst hеightеnеd confidеncе in Ethеr’s mаrkеt prospеcts, with аnаlysts pointing to broаdеr аdoption аnd potеntiаl pricе surgеs.

Institutional Interest in Ethereum (ETH) Grows

In another dеvеlopmеnt, Lookonchаin rеportеd thаt Trump’s World Liberty Financial’s multisignаturе wаllеt significаntly еxpаndеd its cryptocurrеncy holdings by purchаsing Ethereum (ETH), Aаvе (AAVE), аnd Chаinlink (LINK), highlighting Ethеr’s growing аppеаl аmong prominеnt invеstors. Blockchаin dаtа from Ethеrscаn rеvеаls thаt thе wаllеt spеnt $12 million in USDC on thеsе аcquisitions.

Brеаking down thе invеstmеnts, $10 million in USDC wаs аllocаtеd to buy 2,631 ETH аt аn аvеrаgе pricе of $3,801. Thе wаllеt аlso sеcurеd 41,335 LINK for $1 million аt $24.2 еаch аnd 3,357 AAVE for аnothеr $1 million аt $297.8 pеr tokеn. This аctivity coincidеs with Ethereum’s notаblе pricе surgе, rеаching $3,921 with а 6.16% incrеаsе.

Mаrkеt аnаlysts аnticipаtе Ethereum’s potеntiаl to rаlly furthеr, with prеdictions suggеsting а climb towаrd $5,000. Thеsе еxpеctаtions аlign with Ethеr’s currеnt momеntum, supportеd by bullish tеchnicаl pаttеrns аnd strong buying intеrеst.

Bullish Signals Support ETH Price Surge

Rеnownеd аnаlyst Elja Boom rеcеntly shаrеd insights on X, highlighting Ethеr’s “Golden Cross” formаtion—а bullish signаl whеrе thе 50-dаy simplе moving аvеrаgе (SMA) crossеs аbovе thе 200-dаy SMA. 

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Source: Elja Boom

Historicаlly, this pаttеrn hаs lеd to significаnt pricе incrеаsеs for ETH, including pаst rаlliеs of 42% аnd ovеr 130%. Eljа viеws thе currеnt sеtup аs а prеcursor to Ethеr rеаching $5,000 аnd triggеring а broаdеr AltSеаson. Anothеr trаdеr, “Trаding 4or lifе,” аlso voicеd optimism, stаting, “$5000 is loаding.”

In аddition, Ethеr’s rеlаtivе strеngth indеx (RSI) currеntly stаnds аt 62.39, indicаting modеrаtе upwаrd momеntum without еntеring ovеrbought tеrritory. Thе Chаikin Monеy Flow (CMF) vаluе of 0.16 furthеr supports а positivе outlook, showing nеt buying prеssurе аnd аn ovеrаll bullish sеntimеnt.

Whilе thеsе indicаtors suggеst room for furthеr growth, аnаlysts аdvisе cаution аs RSI аpproаchеs ovеrbought lеvеls or if CMF dеclinеs, which could signаl wаning momеntum. Howеvеr, thе ovеrаll signаls suggеst а bullish outlook for Ethereum’s trаjеctory.

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Bitcoin’s $66K Milestone Indicates Bullish Potential Despite Setbacks

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  • Bitcoin has set a new technical higher high at $66k, signaling a potential shift in market trend.
  • Long-term holders are resilient despite 47.4% of their supply being in unrealized loss.
  • Institutional demand through Bitcoin ETFs continues to grow, influencing market dynamics.

For the first time since setting its all-time high, Bitcoin has created a new technical high, bouncing into the range of $66,000. This is important because it marks a technical shift in the price structure for the first time, which indicates a probable shift away from the extended downtrend that has dominated the market.

A recent report by Glassnode illustrates this by comparing the current market cycle with the other ones. Recovery of the price in BTC follows the pattern shown by the asset after the 2015-16 and 2019-20 cycles. In this respect, BTC keeps a similar structural path that is an interesting framework for understanding how long and ongoing it will be, even though circumstances are different.

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Source: Glassnode

However, after reaching $66k, Bitcoin got pulled back to $60k and is currently trading at $61.7k. Despite the pullback, the high at $66k does give some hope that the bearish trend is weakening.

Bitcoin Long-Term Holders Resilient Despite Losses

One essential on-chain metric is that long-term holders continue buying BTC, and the supply ratio between long- and short-term holders has been at its highest since mid-2021. This would suggest many investors are still HODLing through the volatility. Conversely, there’s a growing amount of LTHs holding Bitcoin at an unrealized loss-in large part due to purchases made near the $73k ATH.

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Source: Glassnode

Despite the fact that almost half of the LTHs are holding Bitcoin at a loss, the scale of these losses remains small, hence putting minor financial pressure on this cohort. Historically, LTHs tend to hold through market volatility, and this trend appears to continue.

In contrast, the STH is showing a profit. The STH MVRV indicates that more than 62% of the STH supply is in profit. It means better conditions for the market participants who entered the game recently and reduces financial stress for this cohort.

image 12 10
Source: Glassnode

Institutional Interest Grows

It has also been a case of institutional demand that has driven price action in recent market moves. US spot ETFs currently hold around $58 billion in assets, which accounts for around 4.6% of the underlying circulating supply of Bitcoin. With the key players being BlackRock, Fidelity, and Grayscale leading from the front, the cost basis for these ETF holdings may be viewed in a bracket between $54.9k-$59.1k.

image 12 11
Source: Glassnode

The price of Bitcoin has tested these levels on several occasions, and further illustrates the effect of institutional participants on the market. As ETFs become more integral to the core structure of Bitcoin, they will comprise 4% to 5% of net capital inflow and add more stability to the market.

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Gensler Signals Ethereum ETF Launch Amid Regulatory Review

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The Securities and Exchange Commission (SEC) of the United States has an ongoing analysis on a proposed exchange-traded fund (ETF) that will directly invest in Ethereum, according to SEC Chairman Gary Gensler.

Speaking at Bloomberg Investment Summit, he said that the review is progressing well but he did not announce when the document review would be completed by the employees. During wider conversations about crypto-policy, this cautious optimism was expressed by Gensler, who insisted on the absence of irregularities between cryptocurrencies and securities laws.

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Meanwhile, Wall Street’s top regulator is navigating a legal challenge that has disrupted one of Gensler’s significant policy initiatives. The SEC is currently assessing its response to a recent appellate court decision that struck down new rules requiring hedge funds and private equity firms to disclose more detailed information about their fees.

The three-judge panel from the 5th U.S. Circuit Court of Appeals ruled that the SEC had overstepped its authority. Gensler, during the Bloomberg Invest event in New York, reiterated the agency’s commitment to acting within legal boundaries and hinted at possible adjustments in their approach.

Despite the legal hurdles, Gensler provided an encouraging update on the Ether ETF review. Companies such as VanEck, ARK Investment Management, BlackRock Inc., and Fidelity Investments are eagerly awaiting the SEC’s decision, though Gensler refrained from offering a specific timeline for the review’s conclusion.

Potential Impact of Ethereum ETF Launch

In a rare moment of candor, Gensler’s remarks hinted at the possibility of an imminent approval, aligning with Bloomberg’s speculation that the ETFs might launch as early as July 2. This potential launch comes at a critical time, with cryptocurrency markets experiencing volatility. Bitcoin ETFs, approved earlier in the year, sparked a rally, raising questions about whether Ether ETFs could have a similar impact.

However, the outlook for Ethereum remains nuanced. Often considered Bitcoin’s less celebrated sibling, Ethereum boasts advanced features like smart contracts and staking but lacks Bitcoin’s straightforward “digital gold” branding.

Christopher Perkins, president of the venture capital firm CoinFund, highlighted the branding challenge Ethereum faces. Bitcoin’s clear value proposition appeals to a wide investor base, while Ethereum’s complex functionality can be harder to grasp, particularly for older investors.

According to Perkins, Bitcoin ETFs enabled investments through brokerage accounts to be made simpler while Ethereum ETFs could bring about a greater degree of regulatory clarity. This is a notable change considering SEC’s historic indecisiveness concerning Ethereum’s legal status. Moreover, these yield-bearing Ethereum ETF’s can alter this landscape, serving as a benchmark rate for staking yield, which frequently exceeds Treasury rates when adjusted for inflation.

As the launch of Ethereum ETFs approaches, Perkins said that people should visualize it as a way towards acceptance by the larger society and lesser regulations. The first adoption was slow though an important moment in the development of cryptocurrency investment may be marked by the Ethereum ETF approval.

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Fidelity’s $100 Trade Fee Rattles Investors in New ETF Trade Policy Shift

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Fidelity’s decision of a $100 trading fee for particular e­xchange-traded funds (ETFs) has disrupted the­ investment landscape. This move shows a shift from the­ established standards of lower trading costs and raises concerns regarding its conseque­nces for investors, smaller ETF provide­rs, and overall ETF innovation.

Fidelity asserts that the­se charges are e­ssential to offset expe­nses associated with maintaining and advancing their commission-fre­e ETF trading platform. They highlight­ that these fee­s do not constitute compensation for promoting specific ETFs but rathe­r support “shareholder service­s, analytical tools, investment rese­arch, and educational resources.”

The $100 charge­ imposed by Fidelity on ETF trading has faced criticism from industry e­xperts. Elisabeth Kashner, FactSet’s dire­ctor of global fund analytics, highlights that passing these fee­s to investors through higher expe­nse ratios could disadvantage smaller and innovative­ ETF issuers.

“If those Fidelity trading fees are socialised across the fund base as increased fund expenses, that makes the fund more expensive for everybody,” Kashner said.

1 Billion Impacted by Fidelity’s Fee Shift

The initial targets of Fide­lity’s fee plan are smalle­r, active ETF managers – a segme­nt renowned for its dynamism and contribution to ETF innovation. According to Todd Rosenbluth of Ve­ttaFi, if this fee structure be­comes widespread, it could hinde­r the developme­nt of new ETFs due to the added cost burde­n on launching and maintaining them.

David Young, the CEO of Re­gents Park Funds, one of the nine­ impacted issuers, voices dissatisfaction re­garding the fee imple­mentation. His concern revolve­s around the potential nece­ssity for smaller issuers to raise the expe­nse ratios associated with their ETFs, which could adve­rsely affect investor re­turns.

While Charles Schwab, another promine­nt platform for US ETF trading, currently maintains a zero-commission structure, the­ industry closely monitors Fidelity’s move. This action pote­ntially establishes a prece­dent, prompting other brokerage­s to adopt analogous fee structures.

Overall, Fidelity’s fe­e plan has receive­d negative reactions initially, but some­ unexpected advantage­s could exist. The fee­s might motivate ETF sponsors to negotiate lowe­r expense ratios with Fide­lity, potentially resulting in long-term cost savings for inve­stors. Moreover, the fe­es could be utilized to e­nhance Fidelity’s platform, providing investors with acce­ss to superior research and analytical tools.

The­ overall impact of Fidelity’s fee­ plan remains uncertain. Whethe­r it hinders innovation or ultimately bene­fits investors depends on how othe­r brokerages respond and how ETF issue­rs adapt their pricing strategies. 

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Bitcoin Narrative: Fidelity’s Timmer Explores ‘Exponential Gold’ Theory

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Recently, Fidelity’s Director of Global Macro, Jurrien Timmer, shared his perspective on Bitcoin, comparing it to “exponential gold.” In a bid to explain this, Timmer explored his supply-side thinking, which takes a different angle from the one used in the stock-to-flow (S2F) concept; he deviated from his other research on Bitcoin that was primarily demand-oriented, where he made use of S-curves for designing a demand-based valuation model.

In a comprehensive thread, he presented a chart from 1700 to the present showing the price swings of gold, silver, and bitcoin against their annual volatilities for twelve months at a time. However, until 1970, gold’s price remained fixed under various monetary systems such as the gold standard and Bretton Woods arrangement. Nevertheless, since the Fiat Era started in 1970, volatility in gold was simply a reflection of changing money policies as well as inflationary environments.

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Timmer indicated that “excess money” is important by showing it on a graph where the size of dots represents how much faster the money supply is growing than GDP. Towards the right side of the graph are larger dots representing the pandemic/post-pandemic era, indicating marked oscillations in monetary dynamics.

Besides, Timmer has also given a historical perspective by showing the price of gold, silver, and Bitcoin with the horizontal axis representing the purchasing power of fiat currencies in the past 150 years. While gold and silver are known to have a gradual upward trend as expected from stores of value, Bitcoin’s dramatic rise is strikingly different from others, thereby signaling an aspect that Timmer would wish to study in more detail in subsequent threads.

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Purchasing Power Over Time: Fiat vs. Bitcoin

On top of that, Timmer questioned the dominant narrative that retaining fiat currency simply leads to a loss of purchasing power. According to him, even though fiat may depreciate during periods of negative real rates or when it takes time for bank deposit rates to adjust fully with market rates, using such money wisely such as earning overnight interest rates can protect against inflationary erosion.

To emphasize his point, Timmer showed a chart of how much one dollar has been worth from 1900 till now. The chart in red line shows how it would maintain if left idle as opposed to when it was earning overnight interest (in grey) or put into gold (gold). The data have shown that both Gold and Overnight Money have generally kept up with inflation, thus emphasizing the importance of strategic financial management to preserve purchasing power over time.

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All in all, Timmer’s analysis presents a fine-grained view of Bitcoin’s ability to be used as an asset that holds value. The analysis explains the role played by its bitcoin dynamics and its relationship with conventional monetary assets in this regard.

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Bitcoin ETF Bonanza: A Closer Look At Launch Success

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K33 Research released the latest report revealing that the launch of new U.S. Bitcoin ETFs has garnered significant attention, with an impressive 47,654 BTC in inflows and seeding within the first two days of trading. Despite this success, the overall market response has been lackluster due to substantial outflows from the Grayscale Bitcoin Trust (GBTC) and the new ETFs.

Structural and Psychological Factors Behind Bitcoin (BTC) Tumble

The net positive flow from the U.S. ETF launches stands at 15,540 BTC, reflecting the impact of both structural and basic market psychology factors. GBTC, a star performer in 2023, experienced a remarkable transformation, narrowing its discount to NAV from -45% to 0% in the past seven months, outpacing BTC’s performance. The launch of GBTC at higher fees compared to its peers incentivized investors to rotate funds to other alternatives, contributing to outflows.

Tactical traders, capitalizing on the narrowing discount, seized the conversion as an opportune moment to realize profits. Additionally, heightened expectations surrounding the ETF launch led to selling pressure from traders, exaggerating the directional impact on BTC and contributing to its tumble.

Other U.S. products, including the BITO ETF, faced post-launch outflows, causing selling pressure on CME and affecting market dynamics. BITO saw net outflows of 6,975 BTC, coinciding with profit realization on CME and market makers hedging pent-up flow exposure, driving CME’s futures premiums lower.

BlackRock’s iShares and Fidelity’s Wise Origin BTC ETFs emerged as frontrunners, accumulating inflows of $710 million (16,382 BTC) and $524 million (12,132 BTC), respectively, in their first three trading days. In contrast, Grayscale witnessed outflows of $1.173 billion, indicating a significant rotation away from the established fund.

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Global Implications, BTC Flows Beyond U.S. Borders

Global implications of the BTC flows were evident as BTC held in exchange-traded products worldwide amounted to 864,719 BTC. Following the U.S. spot ETF approval, Canadian and European BTC ETPs experienced substantial outflows alongside U.S. futures-based ETFs. Despite U.S. spot ETFs netting 20,667 BTC in inflows from January 10 to 16, global outflows from other products resulted in a net five-day inflow of 7,141 BTC.

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With U.S. BTC ETFs now representing 80% of the global BTC ETP market, the report anticipates ETF flows to remain a crucial price driver for Bitcoin, especially within the U.S. market. Currently, 4.4% of the circulating Bitcoin supply is held in BTC ETPs globally, a figure expected to rise in 2024 as the market continues to evolve.

Bitcoin ETF Race Heats Up in 2024: 6-Month No Fee

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In early 2024, the anticipation for a spot Bitcoin ETF reached a crescendo. The latest insights reveal the fee structures set by the proposers of two Bitcoin exchange-traded funds [ETFs], providing a glimpse into the financial framework post-approval. Fidelity Investments has delineated a 0.39% annual fee for investors in its Wise Origin Bitcoin Trust, while Galaxy/Invesco is positioned to charge 0.59% per year for its BTCO fund. A noteworthy facet of Galaxy/Invesco’s approach is the exemption of fees for the initial six months of the fund’s operation and the first $5 billion in assets, including key authorized participants like Virtu and JPMorgan.

In a fascinating turn of events, Jane Street Capital is slated to be the “authorized participant” for the Bitcoin ETFs proposed by Fidelity, WisdomTree, and Valkyrie. This designation empowers Jane Street Capital to exploit price differentials between these funds’ shares and the underlying Bitcoin, enhancing the ETFs’ market dynamics. Valkyrie has additionally enlisted Cantor Fitzgerald as a secondary authorized participant, demonstrating a strategic approach to ensure robust market liquidity. Notably, Galaxy/Invesco and BlackRock have both entrusted JPMorgan and Virtu with the crucial role of authorized participants.

Community Reacts To Bitcoin ETF

The cryptocurrency community is exuberant about Galaxy/Invesco’s unprecedented six-month fee waiver, with discussions revolving around strategic business decisions aimed at capitalizing on potential tax advantages. Observers are noting the intensifying competition within the market as various players position themselves strategically.

With the commencement of 2024, the crypto market is ablaze with optimism regarding the potential approval of the Spot Bitcoin ETF application submitted by Galaxy CEO Mike Novogratz. Novogratz’s enigmatic proclamation on social media platforms, accompanied by the logos of Invesco and Galaxy, has sparked speculation and excitement within the crypto community. The mention of “big things are coming” and the directive to “Block Your Calendar” have fueled anticipation, creating a buzz around the imminent decision by the US Securities and Exchange Commission [SEC] on the fate of the eagerly awaited Bitcoin spot ETF.

Fidelity’s Innovative Bitcoin ETF Proposal: A Deep Dive Into ‘In-Kind’ Workflows

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In a pivotal move towards integrating cryptocurrency into traditional financial markets, asset management giant Fidelity met with the Securities and Exchange Commission (SEC) on December 7 to discuss its proposed spot Bitcoin exchange-traded fund (ETF). 

As disclosed on the regulator’s website, the meeting brought together representatives from Fidelity, including Shelley Harding, Cynthia Lo Bessette, and others, with participants from the SEC’s Division of Trading and Markets and Division of Corporation Finance.

During the session, Fidelity presented a comprehensive overview titled “Bitcoin ETF Workflows,” shedding light on the intricacies of “In-Kind” creation and redemption models. The discussion addressed various aspects of the ETF, fostering a collaborative dialogue between industry stakeholders and regulatory authorities.

One key element highlighted in Fidelity’s presentation was the efficiency of arbitrage and hedge through physical creations. The outlined models emphasized the role of Authorized Participants (AP), Registered Broker-Dealers, and ETF Market Makers in facilitating the creation and redemption of ETF shares. The presentation underscored the significance of physical creation and redemption mechanisms in enhancing trading efficiency and secondary market pricing for all participants.

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Bitcoin ETF: In-Kind Create and In-Kind Redeem Models

The proposed workflow detailed the roles and responsibilities of entities involved, such as APs acting as Agencies for non-self-clearing ETF market maker firms with Crypto Affiliates. The process included in-kind creation and redemption steps involving trade dates, settlement dates, and the crucial role of various entities like Transfer Agents, ETF Custodians, and Crypto Affiliates.

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For in-kind creation, the process involved the ETF Market Maker requesting an AP to facilitate the creation of ETF shares, with the subsequent delivery of the required Bitcoin to the ETF Bitcoin Custodian. On the settlement date, the ETF Custodian released the ETF shares to the AP, acting as an agency, for onward delivery to the ETF Market Maker Broker-Dealer.

Conversely, the in-kind redemption process entailed the ETF Market Maker requesting an AP to facilitate the redemption of ETF shares, ultimately leading to the delivery of ETF shares to the ETF Custodian’s account at the Depository Trust Company (DTC). The intricate steps involved in both creation and redemption underscored the meticulous planning required for the successful integration of a spot Bitcoin ETF into the market.

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Nevertheless, Fidelity’s proactive engagement with the SEC and the detailed presentation on Bitcoin ETF workflows underscores the industry’s commitment to navigating the regulatory landscape and establishing a robust framework for cryptocurrency exchange-traded funds. 

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Analysts Predict Ethereum To $3,500 In Q1 2024, Fueled By Fidelity’s Move

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In a bold prediction, industry analysts foresee Ethereum’s price surging to $3,500 in the first quarter of 2024, largely propelled by Fidelity’s recent move into the cryptocurrency market. Michaël van de Poppe, the CEO and Founder of MN Trading, asserts that ETH will experience a substantial uptick once Bitcoin takes center stage.

Fidelity’s Spot ETF filing for Ethereum is the catalyst behind this optimistic forecast. This move is seen as a significant development, signaling a shift in the investment landscape. Van de Poppe’s prediction aligns with a broader trend of institutional interest in ETH, with BlackRock also awaiting approval for its spot Ethereum ETF.

BlackRock’s Pending Ethereum ETF

BlackRock’s application to offer an ETF based on Ethereum’s underlying token is expected to open the doors for traditional investors to enter the crypto space. The market eagerly awaits the potential impact of institutional capital on ETH’s price, especially considering BlackRock’s backing of both Bitcoin and ETH.

Austin Arnold from TheStreetCrypto delves into the possible scenarios following the approval of BlackRock’s ETF. While acknowledging the difference between Bitcoin and ETH in terms of tokenomics and use cases, Arnold suggests a bullish scenario where ETH could reach $42,000.

However, he emphasizes a more realistic expectation of Ethereum hitting $10,000 in the current market cycle, representing a substantial 1,000% increase in return on investment.

Arnold emphasizes the unique qualities of Ethereum as the “digital oil” powering a decentralized global supercomputer. Unlike Bitcoin, which aims to be a store of value, ETH plays a crucial role in supporting decentralized applications and the overall functionality of the network.

With ETH’s supply not fixed, Arnold points to a protocol upgrade contributing to a potential supply shock. He sees the BlackRock Ethereum ETF as the demand shock factor that could significantly influence the cryptocurrency’s value.

Nevertheless, the crypto community eagerly awaits the unfolding of events in the first quarter of 2024, anticipating whether ETH will indeed reach the predicted $3,500 mark or potentially exceed expectations with the backing of major institutional players like Fidelity and BlackRock.

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