BlackRock's iShares Bitcoin Trust exchange-traded fund (ETF) has surged into the top 0.16% of all U.S.-issued ETFs, propelled by over $3.19 billion in inflows as of February 5th, according to Bloomberg ETF analyst Eric Balchunas.
Despite missing the first seven trading days on the Nasdaq awaiting SEC approval, BlackRock's Bitcoin ETF has rapidly climbed the ranks, only trailing behind broad index funds tracking the S&P 500 and Vanguard's Total Stock Market ETF in terms of inflows.
Fidelity's Bitcoin Fund also boasts impressive figures, securing the eighth position among U.S.-based ETF products with $2.51 billion in inflows.
This meteoric rise of Bitcoin ETFs comes despite a seven-day handicap compared to other ETFs, as they were only approved for trading on January 11th. Nonetheless, both BlackRock and Fidelity's Bitcoin ETFs have steadily climbed the ranks, showcasing the growing investor interest in cryptocurrency-backed investment vehicles.
Data from BitMEX Research highlights a significant divergence in inflows between BlackRock and Fidelity's ETFs compared to other spot Bitcoin ETFs, indicating a clear preference among investors for these established financial institutions' offerings.
In the broader landscape, ARK 21Shares and Bitwise trail behind BlackRock and Fidelity, with significant but comparatively lower inflows into their spot Bitcoin ETFs.
Meanwhile, Grayscale's Bitcoin Trust (GBTC) faces shrinking outflows, with its inflows consistently being surpassed by those of other Bitcoin ETF issuers for at least seven consecutive days, reflecting a shifting tide in investor sentiment towards traditional ETFs over Grayscale's converted ETF product.
SEC Initiates Proceedings on Invesco Galaxy Spot Ether ETF, Extending Deadline
The U.S. Securities and Exchange Commission (SEC) has deferred its decision on the proposed spot Ether exchange-traded fund (ETF) from Invesco and Galaxy Digital.
In a notice issued on February 6th, the SEC announced that it would initiate proceedings to assess whether to approve or disapprove the proposed rule change, allowing the Cboe BZX Exchange to list and trade shares of the Invesco Galaxy Ethereum ETF.
This move extends the deadline for a decision by an additional 35 days upon the publication of the proposal in the Federal Register, opening the proposed investment vehicle to public comment.
The SEC has the authority to delay the approval of the Invesco Galaxy spot Ether ETF for up to 240 days before reaching a final decision. Invesco Galaxy initially filed the proposal with the commission in October 2023, with publication in the Federal Register occurring in November, providing the SEC with until July 2024 to decide on the investment vehicle.
While spot Bitcoin ETFs have been available for trading on U.S. exchanges since January 10th, following SEC approval, various firms, including BlackRock, Hashdex, ARK 21Shares, VanEck, and Fidelity, are currently awaiting the SEC's decision on spot Ether ETF applications. VanEck is expected to be among the first to receive a decision, with an SEC deadline set for May 23rd.
The SEC's approach to approving spot BTC ETFs involved simultaneous approval of 11 applications, prompting speculation that a similar strategy might be employed for spot ETH investment vehicles.
However, the SEC has provided limited public commentary on its decision-making process, leaving firms awaiting approval uncertain about the timeline and approach the commission will take.
Federal Reserve drops enforcement action against FTX-linked US bank
The Federal Reserve Board of the United States has announced the termination of an enforcement action against Farmington State Bank, previously associated with the now-defunct cryptocurrency exchange FTX.
Following an initial enforcement action in July 2023, Farmington ceased its operations and no longer operates as a bank, leading the Federal Reserve to conclude its actions against both Farmington and its holding company, FBH Corporation.
Despite receiving approximately $11.5 million from FTX's sister company, Alameda Research, through FBH Corporation in March 2022, the termination of enforcement actions did not explicitly mention FTX or Alameda.
The move comes after Farmington State Bank expressed intentions to exit the cryptocurrency space and return to its original role as a community bank, following the collapse of FTX in November 2022.
The Federal Reserve's decision to terminate its enforcement actions reflects Farmington's shift away from its crypto-related activities. While the termination coincides with the Fed's recent announcement to maintain interest rates at 5.25%–5.50% on January 31st, the correlation between Federal Reserve announcements and cryptocurrency price movements, notably Bitcoin, is a noteworthy aspect in the broader financial landscape.
