Bitcoin ETFs: What are they and how do they work?
Justin Arzadon
5 minutes reading time
- Digital assets
Related articles
Better investing starts here
Get Betashares Direct
Betashares Direct is the new investing platform designed to help you build wealth, your way.
Scan the code to download.
Learn more
Learn more
Bitcoin hit 5-week lows and finished the week lower along with the broader crypto market. Holding prices down is a lack of growth catalysts in the short term, causing negative sentiment around the cryptocurrency. In addition, spot bitcoin ETFs also had their worst week since late April, bleeding over $900 million in outflows.
Bitcoin was down 2.82%, while ETH was down 1.2%, over the last 7 days. Bitcoin’s market capitalisation is down to US$1.26 trillion. The total crypto market cap fell to US$2.35 trillion, while bitcoin’s market dominance is at 54%.
| Price | High | Low | Change from previous week | |
| BTC (in US$) | $64,345 | $67,062 | $63,442 | -2.82% |
| ETH (in US$) | $3,505 | $3,642 | $3,378 | -1.20% |
Source: CoinMarketCap. As at 23 June 2024. Past performance is not indicative of future performance. Performance is shown in US dollars and does not take into account any USD/AUD currency movements.
Source: Glassnode. Past performance is not indicative of future performance.
Crypto news we’re watching
Ether ETFs could be on the horizon
Senior Bloomberg ETF analyst Eric Balchunas has updated his spot ether prediction. Following comments from SEC staff regarding S-1 filings, the analyst said: “We are moving up our over/under date for the launch of spot ether to July 2nd, hearing the staff sent issuers comments on S-1s today, and they’re pretty light, nothing major, asking for them back in a week.”
Last month the US Securities and Exchange Commission (SEC) approved 19b-4 filings for eight spot ether ETFs, but the S-1 filings still need SEC approval before the ETFs can launch1.
Standard Chartered Bank setting up crypto trading desk
Standard Chartered Bank will be one of the first global banks to participate in spot crypto trading. The British multinational bank will launch a trading desk for bitcoin and ethereum, according to a recent Bloomberg report. Two anonymous sources close to the project revealed that the desk is close to starting operations and will be part of the bank’s FX trading unit.
The bank said in an emailed statement: “We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenisation and interoperability.2″
Microstrategy increases bitcoin holdings
Software intelligence company Microstrategy, which has referred to itself as the world’s “first bitcoin development company”, has acquired 11,931 more bitcoin, for US$786 million. This takes the company’s holdings to 226,331 BTC, with a value of approximately $8.33 billion. The average price per bitcoin is $36,798. The most recent purchase was funded from proceeds of a convertible senior note that offers a 2.25% annual interest rate3.
Microstrategy is currently held in Betashares Crypto Innovators ETF (ASX: CRYP)4. According to the company’s website, the firm ‘provides powerful software solutions and expert services that empower every individual with actionable intelligence.’
Bitcoin (BTC): Number of Active Addresses (7d Moving Average)
This metric records the number of unique addresses that were active in the network either as a sender or receiver. Only addresses that were active in successful transactions are counted.
According to data from Glassnode, activity has started to trend higher since the start of this month, but remains at levels close to 3-year lows.
Source: Glassnode. Past performance is not indicative of future performance.
Bitcoin (BTC): Percent Supply in Profit
This metric shows the percentage of circulating supply in profit i.e. the percentage of existing coins whose price at the time they last moved was lower than the current price.
According to data from Glassnode, despite the recent pullback, a whopping 83% of supply remains in profit.
Source: Glassnode. Past performance is not indicative of future performance.
Altcoin news
Every ‘Top 20’ altcoin was trading lower over the last 7 days except for TRON (TRX), which managed to eke out a return of 4%, and 66% over the year to 23rd June 2024.
TRX was launched in May 2018. According to its website: “Tron is dedicated to accelerating the decentralisation of the internet via blockchain technology and decentralised applications (DApps).”
Investing in crypto assets or companies servicing crypto-asset markets should be considered very high risk. Exposure to crypto assets involves substantially higher risk when compared to traditional investments due to their speculative nature and the very high volatility of crypto-asset markets.
Investing in crypto assets or crypto-focused companies is not suitable for all investors and should only be considered by investors who (i) fully understand their features and risks or after consulting a professional financial adviser, and (ii) who have a very high tolerance for risk and the capacity to absorb a rapid loss of some or all of their investment. Any investment in crypto assets or crypto-focused companies should only be considered as a very small component of an investor’s overall portfolio.
References:
1. https://news.bitcoin.com/bloomberg-analyst-now-expects-spot-ethereum-etfs-to-launch-on-july-2/
2. https://www.bloomberg.com/news/articles/2024-06-21/crypto-trading-stanchart-launches-spot-btc-eth-desk?embedded-checkout=true
3. https://www.fxleaders.com/news/2024/06/22/michael-saylors-microstrategy-buys-11-9k-more-bitcoin-whats-the-impact/
4. As at 9 June 2024. No assurance is given that this company will remain in the portfolio or will be a profitable investment.
Off the Chain is published every second Tuesday. It provides the latest news on bitcoin and the rest of the crypto market, along with analysis and insights into the world of crypto.
It provides general information only and is not a recommendation to invest in any crypto asset, crypto-focused company or investment product.
