Weekly Market Update - Bitcoin Extends Gains to $37K Amid More ETF Rumors, Ether Builds Momentum, and Crypto Funds See Flood of Inflows

Takeaways

• Bitcoin rises above $37k as ETF momentum continues: Bitcoin rose throughout the week before settling around the $37k range by Friday. The price of BTC was largely in consolidation mode early in the week, which shifted to an upward trajectory after reports surfaced that an eight-day window had opened for the SEC to approve spot bitcoin ETF applications. BTC gained about 7% over the last seven days and is now up more than 25% over the past month.
• Ether launches past $2,000 and BlackRock begins spot ether ETF process: After lagging behind BTC and surging altcoins, ether (ETH) saw renewed strength this week rallying above $2,000. Further bolstering ETH, BlackRock registered an iShares Ethereum Trust in Delaware, which is an early step in the application process for a spot ether ETF.
• Solana continues to rise gaining ~30%, and Ripple signs deals with Georgia and Dubai: Solana (SOL) built on recent gains this week, rallying another ~30% and topping $50 a token by Friday. SOL is now up over 100% over the past three months. XRP also had a positive week, benefiting from recently announced Ripple partnerships with Georgia and Dubai. XRP is up ~30% over the past month, and has gained over 50% in the past six months.
• Crypto fund inflows surge over past six weeks: CoinShares data showed $767 million net inflows to crypto funds over the past six weeks, recording the most cash injected since 2021’s bull run. The $767 million in inflows surpassed 2022’s total inflows of $736 million.
• Bankruptcy judge approves Celsius reorganization plan: Defunct crypto lender Celsius had its reorganization plan approved by a Bankruptcy Judge on Thursday. The plan would establish a new entity, NewCo, backed by seed funding of $450 million. The new entity aims to be publicly listed and would be focused on Bitcoin mining and staking. The plan would also require sign off from the SEC. Repayments to creditors could start as soon as early 2024.

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Bitcoin Breaks Out as ETF Approval Rumors Swirl

Bitcoin (BTC) extended its rally to the high $37k range this week, before settling around the $37k by Friday. The positive price action came after reports that an eight-day window had opened for the US Securities and Exchange Commission (SEC) to approve the spot bitcoin ETF applications of all active applicants. Importantly, the existing window for approval applies to the funds’ 19b-4 filings, whereas to fully launch an ETF for trading the SEC would also need to approve an S-1. While the timeline for the S-1 approval process is not explicitly clear, it could occur weeks after the 19-4B process.

BTC futures and perpetual markets were active earlier in the week. Funding rates on BTC perpetual futures extended to a 45% implied annualized funding on Thursday morning. Futures basis for bitcoin contracts for December likewise rose to 20% annualized, up from mid-single digit percentages a few weeks earlier. Both of these data points imply significant and growing demand for bitcoin derivatives and were commonly seen when FOMO kicked in during the bull market cycles of 2020 and 2021. Moving into Thursday and Friday as the BTC rally cooled the funding rates tightened and moved back to normal.

Bitcoin (BTC) had been in consolidation mode to start the week, holding around the $35k range. Commentators suggested the appearance of a BTC short squeeze mid-week, as open interest (total value of outstanding derivative contracts) for BTC surpassed $15 billion. This trading pattern saw BTC rise to just under $35.9k on Tuesday, before BTC took another leg up later in the week.

Ether Rises Above $2,000 as BlackRock Initiates Process for a Spot ETF

After lagging behind BTC and surging altcoins, ether (ETH) saw renewed strength this week rallying above $2,000 as the general market moved higher on Thursday. The ETHBTC pair moved above 0.056 on Friday after hitting multi-month lows last week.

Along with the positive market sentiment, ETH was boosted by news that BlackRock registered an iShares Ethereum Trust in Delaware, which is an early step in the application process for a spot ether ETF. The step mirrors BlackRock’s process shortly before it applied for its spot bitcoin ETF.

Solana Gains ~30% This Week and XRP Benefits From Ripple Partnership Announcements

Solana (SOL) built on recent gains this week, rallying another ~30% and topping $50 a token by Friday. Last week, amid SOL’s continued rally, research analysts pointed to Solana’s high throughput and growing developer activity as fundamental catalysts for the token’s rally since the FTX fallout. SOL is now up over 100% over the past three months.

XRP also had a positive week, driven by recent Ripple partnership announcements. Last week, Ripple penned a deal with the nation of Georgia to power its central bank digital currency (CBDC) pilot program. It also announced last week that XRP was approved under the Dubai Financial Services Authority’s (DFSA) virtual assets regime. The approval allows authorized businesses in the emirate to offer XRP to their clients. XRP is up ~30% over the past month, and has gained over 50% in the past six months.

Crypto Fund Inflows Over Past 6 Weeks Hit $767 Million, Surpassing 2022 Total Inflows

In a report released on Monday, CoinShares data showed $767 million of inflows to crypto funds over the past six weeks, recording the most cash injected since 2021’s bull run. Just last week, crypto investment funds saw net inflows of $261 million, extending the run of positive net flows to six weeks. The $767 million in inflows recorded over the past six weeks topped 2022’s total inflows of $736 million.

Bitcoin funds were by far the biggest beneficiaries of inflows, with $842 million invested this year, and $229 million just last week. Geographically, the US dominates the crypto fund market with $158 million of inflows over the past month, ahead of Germany — $63 million, Switzerland — $36 million, and Canada — $9 million.

Celsius Reorganization Plan Approved by Bankruptcy Judge

Defunct crypto lender Celsius had its reorganization plan approved by a Bankruptcy Judge on Thursday. The plan would establish a new entity, NewCo, backed by seed funding of $450 million. The new entity aims to be publicly listed and would be focused on Bitcoin mining and staking. The plan would also require sign off from the SEC.

The plan would also see the distribution of $2.03 billion in crypto for the benefit of creditors, with repayments potentially starting as soon as early 2024.

Former Celsius CEO Alexander Mashinsky was charged with fraud and manipulation in July. He pleaded not guilty and is set to go to trial in September 2024.

ORDI Surges +200% After Binance Listing

ORDI gained a whopping +200% this week after being listed on Binance, surpassing $18 per token by Friday. It is now up over 450% this month. Following the price jump and increased volatility, Binance wrote that ORDI was a token that “poses a higher-than-normal risk.”

ORDI is connected to Bitcoin Ordinals, which at a high level are the Bitcoin equivalent of Ethereum-based NFTs.

-From the Gemini Trading Desk