June 07, 2024

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BlackRock's Spot Bitcoin ETF Exceeds 300,000 BTC in Assets Under Management

BlackRock's IBIT spot bitcoin ETF has surpassed 300,000 BTC in assets under management (AUM) after five months of trading, reaching over $21 billion. This milestone positions IBIT ahead of Grayscale’s converted GBTC fund in terms of AUM. IBIT now holds 302,534 BTC, bolstered by net inflows of around 4,920 BTC recently. Despite GBTC charging higher fees (1.5% compared to IBIT’s 0.25%), IBIT's growth highlights its competitiveness. The combined AUM of all U.S. spot bitcoin ETFs now totals nearly 883,000 BTC ($63 billion), representing 4.2% of bitcoin's total supply. This achievement coincides with a record 18-day net inflow streak for U.S. spot Bitcoin ETFs, accumulating almost $1.7 billion in net inflows this week alone.

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Hong Kong May Permit Staking for Spot Ethereum ETFs by Year-End

Animoca Brands Chairman Yat Siu suggested that Hong Kong could introduce staking for spot ether ETFs within this year. Asset managers, including HashKey, are drafting proposals for staking rewards. Blockdaemon is also in talks with ETF issuers and custodians to explore staking services. This move aims to provide competitive advantages over U.S. ETFs, potentially increasing investor interest and addressing the current underperformance of Hong Kong's spot crypto ETFs compared to their U.S. counterparts.

Semler Scientific Acquires 247 Bitcoins, Announces $150 Million Fundraise to Buy More

Semler Scientific has expanded its bitcoin holdings by acquiring 247 additional coins, bringing its total to 828 BTC. The company announced plans to raise $150 million through a debt securities offering, part of which will be used to purchase more bitcoins. Semler's CEO emphasized their dual strategy of expanding their healthcare business and increasing bitcoin holdings. Despite acknowledging bitcoin's volatility, the firm views it as a valuable inflation hedge and safe haven. Semler's BTC portfolio is currently valued at nearly $59 million.

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Trading Desk Insights

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This morning, Bitcoin finds itself under some pressure due to the unexpectedly robust U.S. job report, which dampens expectations of imminent Federal Reserve rate cuts. Bitcoin, stock, and bond markets have all experienced a slight downturn in response to this fresh data. Initially, prices saw a brief uptick before reversing course, as the higher unemployment rate suggests a favorable outlook for the likelihood of another rate hike.

The open interest for BTC has surged to an all-time high of $37.66 billion. This increase aligns with record inflows into spot Bitcoin ETFs and a bullish long-short ratio, reflecting positive market sentiment and anticipations of Bitcoin reaching new all-time highs in the coming weeks.

Turning our attention to U.S. BTC ETFs, the market has absorbed another round of inflows totaling $217.7 million, with Blackrock leading the charge with $349.9 million, marking its largest inflows in recent weeks.

While a frothy market often signals an impending price correction, characterized by a leveraged speculative frenzy, so far, perpetual futures tied to most crypto pairs show no such indications. This lack of speculative fervor suggests that the recent breakout above $70,000 could be more sustained than the one witnessed in March.

In other developments, a spoof GME token on the Solana blockchain has generated nearly $200 million in trading volumes over the past 24 hours, largely propelled by social updates from Keith Gill, also known as Roaring Kitty. This surge in activity has also seen a related meme, Roaring Kitty (KITTY), experiencing a 220% rise.

Meanwhile, stock futures declined on Friday following a stronger-than-expected May jobs report, which pushed yields higher and dashed hopes of imminent interest rate cuts by the Federal Reserve. The yield on the benchmark 10-year Treasury spiked by nearly 14 basis points to 4.43%. Nonfarm payrolls rose by 272,000 in May, surpassing estimates of 182,000 and outpacing April’s figure of 165,000. Despite the job gains, the unemployment rate edged up to 4%, exceeding forecasts of 3.9%.

Investors had been anticipating weak job figures that would justify Fed rate cuts, albeit not so bleak as to signal an impending recession. The release of the jobs report follows the European Central Bank's decision on Thursday to cut rates for the first time since 2019, adding pressure on the Fed to possibly reconsider its policy stance. The Fed is slated to announce its decision on rates next week following its policy meeting on June 11-12.

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Disclaimer

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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.

The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.

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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.

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