A New Source of BTC ETF Demand Emerges, Coinbase Meets with SEC Regarding ETH ETF
Market Update
- The day commenced with a flurry of activity, beginning with an NFP figure that exceeded expectations, juxtaposed with an unemployment rate that also surpassed forecasts. This combination pushed short rates lower and led the fed funds futures market to anticipate a full rate cut by the June FOMC meeting. The DXY dropped to a low of 102.4 before making a comeback. In crypto, the day started with significant momentum as $BTC surged to set a new all-time high, briefly surpassing the $70,000 mark for the first time. However, it encountered resistance and pulled back to just over $68,000, indicating the presence of supply hurdles around that level. $ETH mirrored this pattern, breaking the $4,000 barrier for the first time in two years, and is currently trading around $3,920. The performance of altcoins is mixed, with $SOL exceeding $150, only to fall towards $140, and is now trading just above $148. File storage names in $AR and $FIL are outperforming on the day, along with AI-adjacent $RNDR. Equities presented less volatility but mirrored a similar route as crypto. Despite a strong open, they retreated, with the SPX experiencing a slight decline and the QQQ dropping around 0.70% thus far on the day. In contrast, traditional gold maintained its recent strength, reaching a new all-time high and advancing towards $2,200.
- This week, the Bitcoin ETFs have witnessed remarkable flows again, amassing over $2 billion in aggregate net inflows. BlackRock's IBIT led the charge, bringing in $1.7 billion, and Fidelity's FBTC was not far behind, securing $1.2 billion in inflows. Since their inception nearly two months ago, all BTC ETFs have collectively attracted over $9 billion in net inflows, vastly surpassing most initial forecasts. A pivotal evolution in the Bitcoin ETF narrative is unfolding as these products begin to be integrated into broader investment strategies. A prime illustration of this trend emerged yesterday when BlackRock announced an update to its filing with the SEC, expressing an intention to incorporate spot Bitcoin ETFs into its Global Allocation Fund, which boasts nearly $18 billion in assets. This movement towards embedding Bitcoin ETFs into diverse ETF offerings is poised to persist, heralding a new era of demand for these ETFs.
Source: Farside Investors, Fundstrat
- An SEC memo has shed light on a meeting between SEC attorneys and representatives from Grayscale and Coinbase, centered on the potential conversion of ETHE into a spot ETF. The core arguments highlighted the proper categorization of ETHE shares as commodity-based trust shares. They drew a parallel between the Commission's rationale for approving spot Bitcoin ETPs, which, by implication, should apply equally, if not more convincingly, to ETH. The discussion also covered Ethereum's inherent mechanisms designed to curb fraud and manipulation, as well as the robustness of spot markets for ETH, which are deemed highly resistant to such practices. Furthermore, it was noted that akin to Bitcoin, the Exchange's thorough surveillance-sharing agreement with the CME plays a crucial role in monitoring for fraud and manipulation. This dialogue suggests a renewed focus by the SEC on the interplay between spot and futures prices as a basis for the approval or denial of ETFs. Historically, the SEC's hesitancy toward sanctioning BTC ETFs stemmed from an alleged disconnect between spot and futures markets, a stance ultimately deemed untenable by the courts, leading to the obligatory approval of spot ETFs. The persistence of this argument by the SEC may signal a positive outlook, considering the legal precedents established.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Despite Ethereum's 70% gains in the last six weeks of consecutive gains, its Dominance chart has not yet broken out of its consolidation range which has been intact over the last two years. This chart displaying $ETH market capitalization has slowly but surely begun to gain some strength since January, but yet an even larger period of outperformance should be possible once this ETH.d chart resolves this triangle pattern with a breakout to the upside. This would occur over 20% and help drive a period of relative strength in ETH vs. other coins which hasn't been seen since the period from 2020-2021. In the short run, it's difficult to expect that Ethereum is peaking out on an absolute basis despite overbought conditions,and DeMark indicators likely will not line up for another few weeks on multiple timeframes that would result in at least a minor correction. Overall, a rally back up to test all-time highs at $4867 is expected, and the act of breaking out of resistance of this symmetrical triangle pattern on its dominance chart would bode well for outperformance vs. other coins and likely vs. Bitcoin itself (which at present remains premature.)
Daily Important Metrics
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All metrics as of March 8, 2024 11:23 AM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $1.34T | $68,319 | ↑ 0.98% | ↑ 62% | |
 ETH | $473B | $3,937 | ↑ 1.99% | ↑ 73% | ↑ 11% |
 SOL | $66B | $149 | ↑ 2.29% | ↑ 47% | ↓ -15% |
 ADA | $26B | $0.7259 | ↓ -2.65% | ↑ 22% | ↓ -39% |
 DOGE | $24B | $0.1683 | ↑ 8.32% | ↑ 89% | ↑ 27% |
 DOT | $14B | $10.53 | ↑ 1.57% | ↑ 30% | ↓ -32% |
 LINK | $12B | $19.81 | ↓ -1.36% | ↑ 32% | ↓ -29% |
 MATIC | $11B | $1.13 | ↓ -2.85% | ↑ 18% | ↓ -44% |
 NEAR | $5.8B | $5.59 | ↑ 0.39% | ↑ 55% | ↓ -6.39% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↑ 1.04% | $37.25 | ↑ 4.78% | ↑ 1.09% | ↓ -61% |
| BITW | ↓ -37% | $24.10 | ↑ 3.88% | ↓ -1.87% | ↓ -64% |
| ETHE | ↓ -7.98% | $19.73 | ↑ 4.50% | ↑ 1.39% | ↓ -60% |
| BTCC | ↑ 0.08% | $8.07 | ↑ 3.46% | ↓ -1.34% | ↓ -63% |
News
QUICK BITS
CoinDesk Coinbase Upgraded to Neutral as Goldman Sachs Ends Bearish Stance The bank lifted its rating on the stock after bitcoin hit record highs and the crypto exchange’s trading volume reached levels not seen since 2021. |
The Block MIT and Harvard alumni launch startup accelerator to support web3 founders MIT and Harvard alumni have teamed up to launch a startup accelerator focused on supporting early-stage web3 founders. |
CoinDesk Pantera Looks to Purchase Discounted Solana Tokens With New Fund: Bloomberg Prices of Solana’s SOL are up nearly 600% over the past year, CoinGecko data shows. |
MARKET DATA
The Block 4% of the entire bitcoin supply is now backing US spot ETFs Spot bitcoin ETFs in the United States continue to vacuum up bitcoins — now claiming roughly 4% of the entire bitcoin supply. |
The Block Spot bitcoin ETF cumulative trading volume crosses $100 billion Another major milestone for spot bitcoin ETFs as the products continue to break weekly and daily trading volume records. |
CoinDesk Return of Animal Spirits? Bitcoin Traders Lock $20M in the $200K Call Option Bitcoin traders are having a relook at the $200,000 call option after a gap of nearly three years. |
CoinDesk Optimism Sells $89M OP Tokens in Private Transaction The tokens have been sold to an undisclosed buyer and will be vested for two years. |
The Block Crypto exchange daily volume rises to nearly $100 billion for first time since 2021 While crypto trading volumes have been up since November, there has been a recent rapid increase in daily trading activity. |
DOSE OF DEFI
CoinDesk Stablecoin Project Ethena Labs Bags $4M for USDe Treasury The stablecoin earns yield by shorting ether futures and capturing funding rates - which have surged in the past two weeks. |
CoinDesk Solana DeFi Protocol Kamino Sets KMNO Token Airdrop for April Kamino is the latest Solana-based DeFi protocol to airdrop a token. |
REGULATION
The Block Wyoming governor signs into law a bill to give DAOs legal standing in the state A new bill was signed into law in Wyoming that would give decentralized autonomous organizations legal standing in the crypto-friendly state. |
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