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Fineqia Research Analyst Discusses the Impact of Spot ETFs on Bitcoin Market Dynamics

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Fineqia Research Analyst Discusses the Impact of Spot ETFs on Bitcoin Market Dynamics

Crypto.news recently spoke with Matteo Greco of Fineqia International to discuss the current state of the Bitcoin ETF market and what we can expect in the future.

Bitcoin has emerged as one of the best-performing assets of the last decade.

It has transcended its status as a lesser-known peer-to-peer payments system, catalyzing the creation of an entirely new asset class that now boasts a market capitalization of over $1 trillion.

With the approval of 11 Bitcoin ETFs in sight in January 2024, traditional investors now have an easier path to gaining exposure to the leading cryptocurrency.

These investment vehicles are reshaping the crypto sector, having attracted billions of dollars in market capital. In addition to legitimizing Bitcoin, these have also attracted substantial interest of institutional actors.

Another factor that could impact the Bitcoin ETF sector is the potential approval of spot ethereum ETFs. Analysts expect these to capture 20% of investment flows currently heading into spot Bitcoin ETFs, further adding to the intrigue.

With these developments in place, the market continues to be a dynamic and unpredictable arena. The future of Bitcoin ETFs, while promising, is being shaped by a myriad of factors, including regulatory developments and macroeconomic trends.

How could these influence the market dynamics of these investment vehicles? How could this impact the price of Bitcoin?

According to Greco, inflows into Bitcoin ETFs are significant, but they are not the only factor influencing the price of Bitcoin.

Why does the substantial inflow of capital into Bitcoin ETFs not correspond to an equivalent increase in the market price of Bitcoin?

There are several factors that can increase or decrease the price, including supply and demand, liquidity and leverage. It’s not as simple as a single factor correlation to price action. However, it is incorrect to say that the entry did not support positive price action. When BTC ETFs were approved on January 10, the price of BTC was around $46,000. Currently, BTC has been ranging between $65,000 and $70,000 for weeks, indicating a 40% to 50% price increase following approval. At the time of approval, the total market cap of BTC was around $900 billion and now, with BTC at $67,000, it is around $1.3 trillion. This represents a $400 billion increase in total market value, while BTC ETFs saw around $16 billion in net inflows. This means that BTC market cap growth was 25 times greater than the value of net inflows into BTC Spot ETFs. This demonstrates that the impact of the approval and commercialization of these products has been substantial, extending beyond the direct influx into these financial products. It helped sustain demand for the asset due to positive sentiment and medium-term expectations about Bitcoin and the digital asset space in general.

Could the possible approval of an Ethereum ETF significantly change the investment landscape for Bitcoin ETFs?

Bitcoin (BTC) and Ethereum (ETH) are fundamentally different assets with distinct intrinsic characteristics. Bitcoin uses a Proof of Work consensus mechanism, which relies on miners, while Ethereum, like most digital assets, employs Proof of Stake, which does not require computing power to confirm transactions. This mechanism allows ETH and many other digital assets to offer staking rewards to investors, similar to dividends in traditional finance. BTC, however, does not have integrated staking rewards and therefore has different characteristics and cannot be classified as a security. Given the different characteristics and use cases of these two main digital assets, I do not foresee outflows from BTC ETFs moving to ETH ETFs. Instead, I expect net inflows into ETH ETFs, as they represent a distinct asset that new investors, or those who have already invested in BTC ETFs, may also want to gain exposure to.

⁠What impact could the introduction of an Ethereum ETF have on Bitcoin’s status as the leading cryptocurrency?

BTC was the most prominent cryptocurrency before ETFs were approved and will remain so after BTC and ETH ETFs are approved. If BTC loses its dominance, it will take considerable time for ETH to overtake BTC in market value. It will be interesting to watch traditional finance’s appetite for ETH as an asset. For comparison, BTC attracted around $16 billion in net inflows during Q1 and Q2, assuming fairly neutral flows for the remaining three weeks of Q2 for the sake of simplicity. ETH’s market capitalization is about a third of that of BTC, so proportionally it should attract about $5 billion in the six months post-launch to match BTC’s level. Higher entries would indicate more enthusiasm for ETH, and lower entries would suggest otherwise. Although it is challenging to make direct comparisons due to different market sentiments at the time of launch, this serves as a useful index for medium-term analysis.

Are traditional asset ETFs, such as gold, influencing Bitcoin market dynamics?

I would look at this from the opposite perspective. Traditional asset ETFs have been trading for a long time and the introduction of digital asset ETFs to the market represents increased competition. For example, the impact of BTC ETFs has been significantly stronger compared to the introduction of the first gold ETF in 2004. This indicates that investors have a defined appetite for digital assets, meaning that a portion of the allocation previously reserved exclusively for digital assets Traditional finance is now being driven towards digital asset ETFs.

As for the influence of BTC Spot ETFs on the market, these products undoubtedly reinforce BTC’s global recognition. With some of the most prominent traditional financial companies issuing and/or holding BTC, this leads to increased liquidity, greater security, and reduced spreads and commissions for investors and traders.

With the launch of ETFs, has Bitcoin generated enough institutional and retail interest to support its proposed role as a hedge against inflation?

I would not limit BTC to being classified solely as a hedge against inflation. Although BTC can serve as a hedge against inflation in the long term, it is not a safe hedge in the short term due to its high volatility. BTC has attracted strong institutional and retail interest for a variety of use cases, which highlights its versatility. Being fully decentralized with no CEO or board, investors can buy and trade BTC based on their preferred use case. Some people buy and hold BTC as a long-term investment or as a hedge against inflation. In countries with hyperinflation, people can use BTC as a hedge against short-term inflation. Others see it as a speculative investment, while some appreciate its decentralized nature and the idea of ​​a currency not issued by central governments. It is incorrect to classify BTC into a single category. Bitcoin is an asset that can be used for a variety of purposes depending on individual circumstances and preferences, and its general adoption is increasing across the world.

Would you classify Bitcoin as a traditional investment hedge like gold?

At its current stage, I would classify BTC more as an investment, similar to stocks, due to its high volatility, rather than as a hedge against inflation, like gold or bonds during periods of high interest rates. In my opinion, an inflation hedge should primarily offer high stability and serve as an alternative to fiat currency – something stable and liquid that can be easily used to pay for services and quickly converted into cash in an emergency. BTC falls short in this regard because its value can fluctuate drastically depending on market conditions, meaning that converting BTC to fiat currency can result in significant losses if done at an unfavorable time.

What does this mean for Bitcoin?

While BTC can serve as a long-term inflation hedge and a means of increasing purchasing power, it cannot be set as an inflation hedge by default. For example, during the last bear market, BTC experienced its biggest declines, coinciding with spikes in inflation and increases in interest rates. On the other hand, BTC performed well again when central banks stopped raising interest rates as inflation eased. If BTC were a short-term inflation hedge, it would have behaved oppositely, rising during high inflation and macroeconomic uncertainty and slowing when inflation eased and interest rates stabilized. This pattern indicates that BTC is currently traded more as a risky asset, similar to stocks, than as a hedge against short-term inflation. As mentioned previously, the decentralized nature of BTC means that investors can define its role in the market. Currently, most investors perceive BTC as a risky asset and trade it accordingly.

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We are the editorial team of TokenTrends, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on TokenTrends, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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Bitcoin

RIOT, MARA and CLSK shares at risk

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Bitcoin price nears key support: RIOT, MARA, and CLSK stocks at risk

Bitcoin (BTC) Mining stocks like Riot Platforms (RIOT), Marathon Digital (MARA) and CleanSpark (CLSK) retreated in pre-market trading as BTC retreated.

RIOT, MARA and CLSK all fell more than 2%, while other crypto-related stocks such as MicroStrategy (MSTR) and Coinbase (COIN) fell 1.5%.

Bitcoin sell-off continues

Crypto-linked stocks retreated as Bitcoin resumed its downtrend on Wednesday. After rising to $63,750 on Monday, BTC is hovering at $60,0000 and it is unclear whether it will recover.

More importantly, Bitcoin is dangerously close to the crucial support at $58,273, which is the 200-day Exponential Moving Average (EMA). The next support level for Bitcoin is $56,426, representing its lowest level in May.

Bitcoin Price Chart

If Bitcoin drops below this price, it will be a sign that the bears have prevailed, which could take it to the $50,000 level, if not below.

This decline happened after a whale deposited nearly 2,000 Bitcoins to Binance in two separate transactions. While this isn’t always the case, deposits to exchanges often happen when holders are exiting their positions.

The whales’ action coincided with a period in which the German government continues to sell off its Bitcoin holdings. It transferred $52 million worth of coins to exchanges on Tuesday.

As a result, data from CoinGlass shows that the volume of Bitcoin balances on exchanges has started to increase. The volume rose to 2.49 million on Tuesday, from last month’s low of 2.47 million.

Bitcoin Balances

Bitcoin balances on exchanges

Bitcoin Mining Companies at Risk

If the Bitcoin sell-off continues, it will put Bitcoin mining companies like Marathon, CleanSpark, and Riot Platforms at risk. These companies have tended to have a close correlation with Bitcoin in the past.

This drop is happening a few months after the halving event, reducing the amount of Bitcoins that miners receive.

To compensate for this drop, most of these companies have added their mining equipment. CleanSpark has reached a hash rate of 20 EH/swhich helped her mine 445 coins in June after mining 417 coins the previous month. She did this after purchasing 5 mining sites in Georgia.

Digital Marathon mined 590 coins in June, down 40% from the same month in 2023 and flat from May.

Riot Platforms, on the other hand, focused on acquiring Bitfarms, a company that mined 189 coins in June.

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Michael Saylor Issues Statement on Bitcoin Amid Crypto Market Sell-Off by U.Today

TokenTrends Staff

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Michael Saylor issues statement on Bitcoin amid crypto market sell-off

U.Today – Amid an ongoing sell-off in the cryptocurrency market, Michael Saylor, a prominent advocate and president of MicroStrategy, made a statement on X (Twitter) that reverberated across the crypto space: “Just Bitcoin.”

This two-word tweet comes as the cryptocurrency market faces significant sell-offs as the price of Bitcoin plummets.

Bitcoin, the largest cryptocurrency by market value, began its decline in Tuesday’s trading session, hitting $63,223 at one point before falling further.

Losses deepened on Wednesday as investors considered remarks from Fed Chair Jerome Powell, with Bitcoin hitting intraday lows of $59,509. At the time of writing, BTC is down 2.85% over the past 24 hours to $60,274.

According to data from CoinGlass, the sell-off has resulted in a significant amount of cryptocurrencies being liquidated in the past 24 hours, totaling over $166 million. However, this has not deterred Saylor’s confidence in Bitcoin, as he reiterates his longing for the crypto asset in his tweet.

Cryptocurrency market crashes

Cryptocurrencies fell on Tuesday after Fed Chairman Jerome Powell said the central bank needs to see more progress on inflation before cutting interest rates, which are now at 5.25%-5.50%. Powell revealed at a monetary symposium in Sintra, Portugal, that the United States is moving closer to a disinflationary path.

“We want to be more confident that inflation is moving sustainably downward toward 2% before we begin the process of tapering or easing policy,” Powell said.

Market losses deepened after Wednesday’s economic releases that indicated the labor market is cooling. Recent data showed weaker-than-expected private payroll growth in June, but weekly jobless claims were higher than economists had forecast. The latest figures come ahead of the highly anticipated June nonfarm payrolls report on Friday.

As the cryptocurrency market goes through a period of uncertainty, the coming days and weeks will be crucial in determining the direction of BTC’s price.

This article was originally published on U.Today



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Bitcoin and Ethereum in GTA 6? Still rumors — for now

TokenTrends Staff

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Bitcoin and Ethereum in GTA 6? Still rumors — for now

Rumors that the long-awaited Grand Theft Auto 6 will use cryptocurrency that has been circulating for more than a year now—and they’re spinning again.

On Wednesday, a pseudonymous Crypto Twitter influencer named Gordon — apparently named after Gordon Gekko from the iconic 1987 film “Wall Street” —shared to his nearly 500,000 followers that “GTA 6 will allow cryptocurrency payments” and that “so far only Bitcoin, EthereumIt is USDT [are] confirmed.”

But in reality, no cryptocurrency has been confirmed for Grand Theft Auto 6, despite ongoing chatter about the rumors. Rockstar Games and parent company Take-Two have made no such announcements this week on the subject, nor have they made any prior announcements, and official trailers and announcements have made no mention of cryptocurrency being included.

However, the tweet — which also included a fake trailer for the game — quickly went viral, with over 500,000 views as of this writing in a matter of hours. When Twitter users asked Gordon for his sources, he would jokingly respond that his “uncle works there” or say that previous reports on the matter were “old” at this point.

But really, nothing has changed since then. DecipherGG’s reported in previous rumors in May 2023, not even since the first official trailer — which initially leaked with “BUY BTC” stamped on itApparently by the leaker in question—premiered last December.

DecipherGG reached out to Rockstar Games for comment but did not receive an immediate response.

Could Grand Theft Auto 6 implement a crypto element when it releases in 2025? It’s certainly possible, and if so, it would be a transformative moment for cryptocurrency adoption by the traditional gaming industry.

Take-Two Interactive has explored the space before, acquiring casual gaming giant Zynga in early 2022, when Take-Two founder and CEO Strauss Zelnick suggested there were “Web3 opportunities” that they could explore better as a team. Zynga has launched its first blockchain game on Ethereum, called Sugartownbut Take-Two has yet to get involved with other brands.

Rockstar Games, on the other hand, prohibited the use of cryptocurrency or NFTs on player-run Grand Theft Auto 5 servers in late 2022, following a rise in the use of NFTs to represent unique player-owned assets on modded game servers.

And given Grand Theft Auto’s satirical tone, the game may be more likely to criticize cryptocurrency and poke fun at caricatures of crypto fans and NFTs, for example, rather than trying to launch its own on-chain currency. But that’s all speculation at this point, as there are relatively few official details about GTA 6.

For now, at least, don’t believe the hype. While Rockstar Games hasn’t officially closed the door on cryptocurrency usage in Grand Theft Auto 6, it hasn’t confirmed anything about it either. However, it’s sure to remain a hot topic in the long run leading up to release, which is currently scheduled for fall 2025.

Edited by Ryan Ozawa.

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Crypto President Trump’s ‘Lesser’ Regulation Will Bless Coinbase’s Bitcoin Leverage, Expert Says – Coinbase Glb (NASDAQ:COIN)

TokenTrends Staff

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Crypto President Trump's 'Lesser' Regulation Will Bless Coinbase's Bitcoin Leverage, Expert Says - Coinbase Glb (NASDAQ:COIN)

Chris SenyekChief Investment Strategist at Wolfe Researchrecently expressed his opinion on the potential impact of a Donald Trump win the 2024 elections in the cryptocurrency market.

What happened: Senyek suggested that a Trump presidency could ease cryptocurrency regulations, benefiting companies like Coinbase Global Inc. COIN due to its importance Bitcoin BTC/USD Leverage.

“Trump would be less harsh on crypto regulation, and Coinbase would be a big beneficiary of that given its influence on bitcoin,” Senyek said during CNBC’s “Last Call” on Tuesday.

See too: Enhance Your Retirement Portfolio: The Benefits of Adding Cryptocurrency

Why does this matter?:Senyek’s comments come in the context of the former president Donald Trump‘s reported plans to participate at the Bitcoin 2024 convention, which could reinforce his image as a “Crypto President”.

Trump’s potential participation in the Bitcoin 2024 convention, a major event on the cryptocurrency calendar, could have significant implications for the industry.

Pratik KalaHead of Research in DigitalX Limitedhe has predicted a Trump victory in the upcoming elections, but warns that immediate cryptocurrency-friendly regulations may not be a priority.

A recent report by 10x Search explore the recent rise in Bitcoin price and its potential connection to Trump’s strong position in the 2024 election race. The report, titled “Is the Bitcoin Trump Pump Sustainable?”, highlights a 4% spike in Bitcoin’s price following the news that the president Joe Biden will remain in the race despite a poor performance in the presidential debate.

Price Action: At the time of writing, Bitcoin was trading 2.10% lower at $60,860.66, according to Benzinga Pro.

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Image created using photos from Shutterstock

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari

News and market data brought to you by Benzinga’s APIs

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