The price of bitcoin has experienced a remarkable surge, doubling from its lows in late 2022 and surpassing the $30,000 mark per bitcoin. This upward momentum has not only propelled other leading cryptocurrencies like BNB, XRP, Cardano, Dogecoin, and Solana, but it has also contributed to an impressive $300 billion increase in the overall cryptocurrency market this year. BlackRock, the world's largest asset manager responsible for managing approximately $10 trillion in client assets, has played a significant role in this crypto boom. In response to this trend, BlackRock has triggered a wave of applications for U.S. spot bitcoin exchange-traded funds (ETFs) that collectively boast an astounding $27 trillion in assets under management.
Meltem Demirors, the Chief Strategy Officer at CoinShares, recently took to Twitter to highlight the active involvement of major U.S. financial institutions in facilitating access to bitcoin and other cryptocurrencies. Among these institutions are industry leaders such as Fidelity, JPMorgan, Morgan Stanley, Goldman Sachs, BNY Mellon, Invesco, and Bank of America. Fidelity, in particular, has joined the race to become the first to introduce a comprehensive spot bitcoin ETF. Recently, the company resubmitted the necessary paperwork to the U.S. Securities and Exchange Commission (SEC) for its proposed Wise Origin Bitcoin Trust, initially introduced in 2021.
In an update on July 3rd, the Wall Street Journal reported that the SEC might be inclined to reject the flood of spot bitcoin ETF applications. Anonymous sources cited in the article claimed that the SEC officials found the applications, led by BlackRock, lacking clarity regarding the management of a "surveillance-sharing agreement." This agreement aims to deter fraud and manipulation by ensuring that the fund issuer actively monitors market trading activity, clearing activity, and customer identity. As a result, the SEC has informed the Nasdaq exchange and the Chicago Board Options Exchange (Cboe), representing the asset managers, that the applications need to be resubmitted with more comprehensive and precise data.
Despite these regulatory developments, the crypto markets have continued to experience positive trends. Bitcoin has maintained stability near its peak range of $30,000, outperforming the broader crypto market. Altcoins, on the other hand, witnessed modest gains last week, followed by a more notable pullback this week. While bitcoin trades close to its mid-term highs, the market caps of most altcoins are approximately 20% lower. Prominent altcoins like Solana, Polygon, Polkadot, and Algorand are still striving to regain their May levels.
Rachel Lin, the founder of decentralized derivatives platform SynFutures, drew attention to derivatives data that showcased increased trading activity. Bitcoin's open interest reached $16 billion, with options open interest displaying a call-to-put ratio of 66% to 34%. The 35,000 and 32,000 call levels are of particular interest and could act as resistance if bitcoin surpasses the $30,000 level.
Bitcoin dominance has also hit a new yearly high of 52%, indicating its stronger position in comparison to altcoins. Even Ethereum, which had previously demonstrated resilience against bitcoin, is now showing signs of faltering. According to Lin, the outperformance of bitcoin can largely be attributed to the news surrounding bitcoin ETFs.
In conclusion, the cryptocurrency market has witnessed significant growth, with bitcoin leading the charge by reaching new highs. The involvement of major financial institutions and the pursuit of spot bitcoin ETFs has added further momentum to the market. However, regulatory concerns and the need for greater clarity surrounding surveillance-sharing agreements may pose challenges to the approval of these ETF applications. Nonetheless, the overall performance of bitcoin and its impact on the broader crypto market remains strong, shaping the investment landscape for both institutional players and individual investors alike.
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