First Mover Asia: Bitcoin Holds Firm Above $30.1K as Investors Relish BlackRock, Other Spot BTC ETF Filings

Good morning. Here’s what’s happening:

Prices: Bitcoin surged over $30.7K before settling nearer to $30K as investors savored news of multiple spot bitcoin ETF filings.

Insights: Crypto has been “going through a crisis of confidence, but recent filings for spot bitcoin ETFs have helped energize crypto markets, says eToro U.S. investment analyst Callie Cox.

Prices

CoinDesk Market Index (CMI) 1,235 +53.7 ▲ 4.5% Bitcoin (BTC) $30,139 +1368.5 ▲ 4.8% Ethereum (ETH) $1,916 +108.3 ▲ 6.0% S&P 500 4,365.69 −23.0 ▼ 0.5% Gold $1,944 +8.3 ▲ 0.4% Nikkei 225 33,575.14 +186.2 ▲ 0.6% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Bitcoin Returns to Its Perch Above $30K

After weeks of gloom, bitcoin surged for a second consecutive day as investors drew confidence from spot BTC ETF applications by BlackRock and other large asset management firms.

The largest cryptocurrency by market capitalization was recently trading at about $30,140, up nearly 5% over the past 24 hours. BTC last cracked the $30,000 threshold in April.

Bitcoin began rising Tuesday after the long, U.S. Juneteenth holiday weekend as markets more fully digested the impact of the BlackRock filing. Later in the day, spot bitcoin re-filings by Invesco and WisdomTree brightened the mood further, offering the latest evidence of institutional investors’ growing interest in the crypto space even as markets have struggled amid an uncertain regulatory environment, pesky inflation and other macroeconomic woes.

“There is a wave of optimism in the crypto market now that big institutional players are working to take part in the industry in a big way,” Nihar Neelakanti, the CEO and co-founder of carbon-backed digital collectibles Ecosapiens, wrote in an email to CoinDesk.

Neelakanti also also noted “rumors” that Fidelity might also apply for an ETF. On Tuesday, a Fidelity spokesperson told CoinDesk that the firm had not publicly announced any plans to file. Invesco, which has $1.4 trillion in assets under management, filed its application in conjunction with digital asset manager Galaxy Digital. The Securities and Exchange Commission (SEC) rejected WisdomTree’s first spot bitcoin ETF application in 2022.

“These players, among other big names, are obviously going to add a lot of liquidity to the market and make investors more confident to buy bitcoin again,” Neelakanti wrote. “And big institutions partnering with crypto are going to continue to be a catalyst for bitcoin for the foreseeable future, even as the U.S. regulatory situation continues to cause some hardship for the industry.”

Ether enjoyed a similarly upbeat Wednesday to continue its momentum. The second largest crypto in market value was recently changing hands above $1,900 for the first time in three weeks, up more than 6% from Tuesday, same time. Other large cryptos spent the day in deep green territory with ADA and MATIC, the native cryptos of smart contract platforms Cardano and Polygon, each up more than 7%, along with popular memecoin DOGE. The CoinDesk Market Index, a measure of crypto markets performance, was recently up more than 5%.

U.S. stocks veered from their weeks-long winning ways to tick down with tech stocks leading the decline. The technology heavy Nasdaq Composite and S&P 500, closed off 1.2% and 0.5%, respectively. Asia markets opened on a sour note with the Hang Seng and Shanghai indexes recently falling about 2% and 1.3%, respectively

Ecosapiens’ Neelakanti believes that TradFi will take advantage of “regulatory pressure on crypto” to unveil new digital asset initiatives, although he is uncertain of these partnerships long-term benefit. He added, however that every crypto “wave” has drawn new participants.

“The last wave was a lot of retail speculators, and this fits a pattern of how new asset classes develop over time,” he wrote. “You have early believers, then more retail people, and then the third wave of more institutions getting into the fold. We’re starting to see the beginnings of the third wave now. And this wave will include the big institutions, but also 401Ks and other major types of funds like pension funds and university endowments.”

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Insights

Crypto’s “Crisis of Confidence” and the Rush of Spot Bitcoin ETF Filings

Cryptos have been “going through a crisis of confidence,” yet the past week’s “rush of filings for spot bitcoin ETFs has returned “some excitement” into the markets, especially into “well-known,” quality coins like Bitcoin and Ethereum,” Callie Cox, U.S. investment analyst for social investing platform eToro, told CoinDesk TV’s “First Mover” program on Wednesday.

“Institutional lenders, where this industry grows, whether you like it or not, that’s the history for many emerging markets,” Cox said. “And the fact that some of the largest issuers in the world are stepping in and saying, ‘we want to offer this product,’ tells you something about pent-up demand, or demand from investors who might not be comfortable trading spot crypto.”

Last Thursday, the iShares unit of fund management giant BlackRock (BLK) filed paperwork with the U.S. Securities and Exchange Commission (SEC) for the formation of a spot bitcoin (BTC) ETF. Earlier this week, investment management companies Invesco (IVZ) and WisdomTree refiled for spot ETFs.

IVZ, which has $1.4 trillion assets under management, is working in conjunction with digital asset manager Galaxy Digital. It first filed for a spot bitcoin ETF in 2021. The Securities and Exchange Commission (SEC) denied WisdomTree’s first application 2022, amid a flurry of rejections.

The surge in institutional interest followed closely after ongoing U.S. regulatory scrutiny seemed to reach new heights earlier this month with SEC lawsuits against exchanges Binance and Coinbase, leaving markets in a funk.

After rising strongly over the first four months of the year, bitcoin, ether and most other major assets inched downward with BTC recently dropping below $25,000 for the first time since mid March as investors contemplated the SEC’s increasing scrutiny, inflation and other macroeconomic uncertainties. But even as the wider environment clouded over, institutional interest has continued to percolate.

Cox views the ETFs as “a positive sign,” and believes the market is as well. “It shows that Wall Street still believes in certain parts of crypto and that it’s not like the price of Bitcoin is going to zero. We need to understand what the value is. There is value.”

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CoinDesk TV

In case you missed it, here is the most recent episode of “First Mover” on CoinDesk TV:

Bitcoin Briefly Tops $29K as Invesco Reapplies for Bitcoin ETF; Jack Dorsey’s Block Bitcoin Wallet Plans

Bitcoin (BTC), the world’s largest cryptocurrency by market value, rallied over the past 24 hours after various traditional finance firms announced moves into the crypto market, indicating bullish sentiment. eToro US investment analyst Callie Cox shared her crypto markets analysis. Plus, Lindsey Grossman, the business lead at Bitkey, Block’s bitcoin wallet, joined “First Mover” to discuss teaming up with Coinbase and Cash App, along with the launch of Bitkey’s external beta sign-ups. And, Axelar CEO and co-founder Sergey Gorbunov shared his reaction to the Uniswap Foundation’s recent bridge assessment report.

Headlines

Bankrupt Hedge Fund 3AC’s Return as a VC Stirring Up Crypto Community: 3AC co-founder Kyle Davies told CoinDesk that the new entity aims to provide support for projects that are building for a decentralized future, but skeptics have recalled the original firm’s tainted past.

Circle Restarts U.S. Treasury Purchases in BlackRock-Managed USDC Reserve Fund: Repurchase agreements will keep being part of the reserve fund, Circle’s chief financial officer said Wednesday during a company call.

MakerDAO Boosts U.S. Treasury Holdings by $700M to Back DAI Stablecoin With Real-World Assets: The purchase is the latest step to increase the role of real-world assets in the platform’s DAI stablecoin reserve.

‘Storage Proofs’ Touted as Alternative to Hack-Prone Bridges in Multichain World: Storage proofs, a feature that could minimize cross-chain exploits by allowing users to keep their assets on one chain and prove that it’s there on a different chain, will go live on Starknet soon.

Polygon Introduces AI Interface Powered by ChatGPT to Aid App Developers: The artificial-intelligence interface, called Polygon Copilot, will help developers obtain analytics and insights for their applications on the Polygon blockchain.

Edited by James Rubin.