Here are some of the major developments in the world of crypto over the past few days.
BlackRock's Bitcoin ETF achieved a new daily trading volume record as Bitcoin's price dropped 6% during the U.S. trading day. On March 14, the iShares Bitcoin Trust (IBIT) traded 99.3 million shares, worth over $3.9 billion, surpassing its previous record of $3.7 billion set less than 10 days earlier on March 5. Despite the price drop, Bitcoin has since started to recover.
BlackRock's Bitcoin ETF has been the top-performing fund by volume and net inflows among the ten new ETFs launched in January. On March 12, it saw a record net inflow day with $849 million inflows, the largest among all Bitcoin funds. The Grayscale Bitcoin Trust (GBTC) remains the largest of the ten U.S. Bitcoin ETFs by assets, but its March 14 trading volume came second to IBIT at $1.96 billion. As of March 10, Grayscale's ETF market share among Bitcoin ETFs has fallen below 50%, with outflows of nearly $11.7 billion since converting from a trust to an ETF alongside the launch of nine new funds.
Bloomberg ETF analyst Eric Balchunas noted on March 14 that the combined monthly trading volumes of the ten ETFs have already exceeded prior months. They have reached $65 billion in volume so far this month, over $20 billion more than February's roughly $42 billion. Net capital inflows to the ETFs have also set a record, with over $1 billion in daily net inflows on March 12. Bitcoin's price fell 2% in the past 24 hours, hitting an intra-day high of over $73,500 before dropping 6.3% to a low of $68,855 just before the U.S. trading day closed at 3:45 pm New York time (7:45 pm UTC). It has since recovered 4% and is currently trading above $71,600.
Two United States senators want Gary Gensler to pull the pin on any further crypto exchange-traded funds (ETFs), citing “enormous risks” to retail investors. In a March 11 letter, Democrat senators Jack Reed and Laphonza Butler claimed that allowing any further approvals of crypto ETFs by the Securities and Exchange Commission would see investors exposed to “thinly traded” markets rife with fraud and manipulation.
Reed and Butler also urged the SEC not to allow the recent approval of spot Bitcoin (BTC) ETFs to become a precedent for further approvals. They claimed that while the market for Bitcoin had displayed “serious weakness,” it was more established and well-scrutinized than the market for any other smaller cryptocurrencies. Alexander Grieve, the government relations lead at crypto venture capital firm Paradigm suggested the success of spot Bitcoin ETFs had been “clearly ruffling some feathers” on Capitol Hill. Crypto industry pundits say the letter is evidence of mounting political pressure on Gensler — which makes an Ether ETF approval in May seem less likely.“The blockbuster success of the Bitcoin ETF is upsetting to high-ranking Dems. Buyer’s remorse. This is part of why we are pessimistic re spot Eth etf approval chances,” said Balchunas in a March 15 X post.
On March 11, Balchunas said the likelihood of a spot Ether ETF approval by May was sitting at just 35%. In January, Blachunas pegged the odds of approval at 70% but told Cointelegraph the SEC’s “radio silence” to prospective fund issuers — among several other factors — was a bad sign. Both Butler and Reed have been involved in several pieces of legislation that seek to crack down on cryptocurrency in the United States. On Dec. 11 last year, Butler joined Senator Elizabeth Warren's controversial Digital Asset Anti-Money Laundering Act bill as a co-sponsor. In July, Reed sponsored a bipartisan bill that would tighten Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations and sanctions requirements for decentralized finance (DeFi).
Hong Kong’s Securities and Futures Commission has put cryptocurrency exchange Bybit on its warning list as of March 14. “The Securities and Futures Commission (SFC) today warns the public of an unlicensed virtual asset trading platform (VATP) known as Bybit,” the regulator wrote, “which offers trading services in crypto-related products in a number of jurisdictions." Included in its warning list are 11 products offered by the Bybit exchange, such as Bybit Futures, Bybit Options, Bybit Leveraged Tokens, Dual Assets, Bybit Lending, Bybit Wealth Management and others.
“The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make it clear that no entity in the Bybit group is licensed by or registered with the SFC to conduct any ‘regulated activity’ in Hong Kong,” said the regulator. Currently, crypto-related products may constitute futures contracts or securities and require prior licensing with the SFC before they can be offered to Hong Kong residents. The March 14 warning refers to bybit.com and its Seychelles-registered owner Bybit Fintech Limited, which is different from bybit.com.hk, a similar domain owned by Spark Fintech Limited that does not currently provide crypto services in Hong Kong.
On Feb. 1, it was reported that Bybit was seeking a virtual asset trading operator (VATP) license in Hong Kong through its Spark Fintech Limited subsidiary. Only two crypto exchanges in Hong Kong are licensed by the SFC, including the OSL exchange, which received a license on Dec. 15, 2020, and HashKey Exchange, which was licensed on Nov. 9, 2022. The deadline for crypto exchanges operating in Hong Kong to file for a VATP application lapsed on Feb. 29. Unlicensed firms must cease operations in the special administrative region by May 31. Likewise, exchanges whose VATP applications are rejected by the SFC must also leave the city within three months.