- Hedge funds appear to favour Bitcoin at present, based on data from FalconX.
- Crypto market activity is relatively muted after Tuesday’s rally.
Happy Thursday!
Bitcoin and crypto prices have cooled off after initially popping on Grayscale’s courtroom victory over the Securities and Exchange Commission on Tuesday. Institutional investors have been keen on Bitcoin over the past few weeks, according to data from crypto exchange FalconX, but Grayscale Bitcoin Trust, or GBTC, stole some of its thunder this week.
Let’s dig in!
Hedge funds keen on Bitcoin
Bitcoin was the most active asset trading on FalconX, with more than two times Ethereum’s volume for the fifth week in a row,” said David Lawant, head of research at FalconX, in a LinkedIn post.
“Our clients have also been relatively more bullish on Bitcoin versus Ethereum,” he said, with 52% of Bitcoin hedge fund flow on the buy side, and 59% of their Ethereum hedge fund flow on the sell side.
Interest from hedge funds on Wednesday didn’t reach the same highs as in June though.
Following BlackRock’s spot Bitcoin ETF application, 63% of the hedge fund’s Bitcoin flows on FalconX were on the buy side. On Wednesday this number was 53%, Lawant said, attributing the weaker interest to investors “flowing into GBTC instead of Bitcoin, expecting a shrinking net asset value discount.”
ETF Pulse
GBTC is up more than 11% since Tuesday. What comes next is unclear.
Grayscale CEO, Michael Sonnenshein, is unsure about where the firm stands and whether it has to refile or not.
The regulator could yet appeal the court’s decision. Experts say that the agency would be best served not opposing a spot Bitcoin ETF any longer.
Eric Balchunas, an ETF analyst at Bloomberg Intelligence, said Wednesday that the widely covered outcome of the case could make a denial of Grayscale’s application “politically untenable.”
The SEC has more on its plate at present. The agency has several pending deadlines to meet before Labor Day weekend.
BlackRock, Fidelity, and VanEck are all approaching the first deadline for their applications this weekend.
Typically they should hear back ahead of the weekend — similar to how Ark Invest was delayed in early August. A delay at this juncture is largely insignificant, with the SEC afforded up to 240 days from the initial application to respond conclusively.
Crypto market movers
- Bitcoin slipped to about $27,200, down 0.7% over the past day. The previous day’s rally appears to have run out of steam, as investors figure out what this means for a spot Bitcoin ETF.
- Ethereum followed Bitcoin lower, dipping 0.7% to trade around $1,700.
What we’re reading
- Uniswap passes first vote to expand its v2 DEX beyond Ethereum – DL News
- High yields split MakerDAO community as Dai supply surges 25% – DL News
- Elon Musk scoops up licenses for crypto payments — but experts say don’t hold your breath – DL News
Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at adam@dlnews.com.
