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BlackRock CEO Larry Fink 'Sees Value' in Spot Ethereum ETF Following Successful Bitcoin Launch
Larry Fink, CEO of BlackRock, the world's largest asset manager, expressed support for launching a spot Ethereum ETF in the U.S. during a CNBC interview. This statement follows the debut of BlackRock's spot Bitcoin ETF (IBIT), which recorded $1.05 billion in trading volume on its first day, surpassing the previous record set by BITO’s Bitcoin futures ETF in 2021. Fink views cryptocurrencies as an asset class, akin to gold, noting that Bitcoin is nearing its production limit. He believes these developments are steps toward the broader tokenization of assets. BlackRock, demonstrating its commitment to cryptocurrency-based financial products, filed for a spot Ethereum ETF in November, following its earlier filing for a spot Bitcoin ETF in June.
CoinShares Expands U.S. Presence with Acquisition of Valkyrie Investments' ETF Unit
CoinShares, a crypto asset manager based in Saint Helier, Jersey, has exercised its option to acquire the ETF unit of Nashville-based Valkyrie Investments. This move, made in direct response to the SEC's approval of spot Bitcoin ETFs including Valkyrie's Bitcoin Fund (BRRR), marks CoinShares' expansion into the U.S. market. The acquisition will add around $110 million to CoinShares' $4.5 billion assets under management, bringing in Valkyrie's Bitcoin and Ether Strategy ETF and the Bitcoin Miners ETF. The terms of the acquisition, still pending due diligence, have not been disclosed. CoinShares' shares on Nasdaq Stockholm saw a modest decline following the announcement.
Grayscale Files for Bitcoin Covered Call ETF Following Conversion of GBTC
Grayscale Investments, following the SEC's approval of its spot Bitcoin ETF, has filed for a covered call ETF aimed at generating income from its position in GBTC. This fund, the Grayscale Bitcoin Trust Covered Call ETF, will focus on delivering current income while participating in the price return of the Grayscale Bitcoin Trust, without directly investing in digital assets. This strategy involves actively managing exposure to GBTC and trading call and put options with GBTC as the reference asset. This development occurs amidst significant trading volumes for newly launched spot Bitcoin ETFs, with Grayscale's ETF leading with over $1.9 billion in volume. This move marks a significant shift in the landscape of Bitcoin ETFs, as highlighted by SEC Chair Gary Gensler's recent decision to approve 11 spot Bitcoin ETFs, signifying a progressive approach towards digital asset exchange-traded products.
Trading Desk Insights
Yesterday witnessed robust activity in the spot ETF market, with a staggering 700,000 individual trades executed across 11 ETFs, totaling over $4.6 billion in trading volume. Impressively, the performance of spot Bitcoin ETFs stood out compared to major equity ETFs such as $SPY and $QQQ. While the notional amount traded was relatively lower, these Bitcoin ETFs demonstrated competitive volumes and a substantial number of trades, securing a commendable share of the market.
In a notable development, Larry Fink, the CEO of BlackRock, highlighted the significance of ETFs, stating that they represent the initial phase of the technological revolution in financial markets. Fink anticipates the subsequent stage to involve the tokenization of every financial asset, a trend gaining traction, particularly among institutions cautious about traditional crypto assets but interested in leveraging blockchain technology for tokenizing real-world assets like gold.
Market activity on Friday saw stocks dipping slightly as traders analyzed the first set of Q4 earnings reports and processed the second key inflation report of the week. Despite this, the broader market is poised for modest gains, with the S&P 500 on track for a 2.2% advance and the Nasdaq outperforming, posting a gain exceeding 3.5% by Thursday's close.
Encouraging news regarding inflation emerged on Friday, with wholesale prices unexpectedly decreasing by 0.1% in December. This data follows Thursday's consumer prices report, which, although slightly hotter than expected, contributes to a positive overall sentiment for investors.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
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