Institutional Funds Invest in Spot Bitcoin ETFs Despite Inflation Uncertainty

The week of August 20-26, 2024

Goldman Sachs reported to the U.S. SEC that as of June 30, it held around 418.65 million USD in U.S. Spot Bitcoin ETFs, including nearly 7 million shares of BlackRock’s IBIT fund. This ranks them as the fund’s third-largest holders, behind Millennium Management and Capula Management.

Morgan Stanley also reported to the U.S. SEC that as of June 30, it had invested 188 million USD in IBIT, and held several other Spot Bitcoin ETFs managed by other asset management firms.

Bloomberg reported that 701 new funds included Spot Bitcoin ETFs in their Q2 filings with the U.S. SEC, bringing the total number of funds holding Spot Bitcoin ETFs to nearly 1,950. These funds range from hedge funds, pension funds, and financial institutions.

BlackRock has surpassed Grayscale to become the largest asset management firm holding Bitcoin and Ethereum, with combined assets under management totaling 21.6 billion USD. The iShares Bitcoin Trust ETF (IBIT) has seen only one day of net outflows since its launch earlier in 2024.

Franklin Templeton is considering launching a new passive ETF focused on generating returns based on the CF Institutional Digital Asset Index. Currently, only Bitcoin and Ethereum are underlying assets, but additional digital currencies may be included in this index in the future, pending U.S. SEC approval.

Cryptocurrency bank Sygnum revealed that a Spot Solana ETF might not attract much interest from U.S. investors, as the Grayscale Solana Trust (GSOL) currently holds less than 70 million USD. This figure is far behind Grayscale's Bitcoin Spot ETF, which holds assets worth 30 billion USD.

Arkham Intelligence data showed that 67% of Mt. Gox's debt has been repaid through Kraken, Bitstamp, Burbank, and SBI VC Trade, while Bitgo is preparing to transfer Bitcoin back to creditors.

Data from Ultrasound.money indicated that Ethereum’s supply has increased to approximately 120.28 million ETH, with the current annual supply growth rate at 0.58%. Meanwhile, the total value locked (TVL) of staked ETH has risen, with a total of 33.9 million ETH staked.

Technical Graph Analysis

Bitcoin (BTC)

BTC has been moving sideways in the past week and may decline to the support level of 54,000 USD if it fails to break through the first resistance level at 62,000 USD. However, if it succeeds, the price could retest the 70,000 USD resistance by the end of the month.

Support: 1,900,000 THB / 54,000 USD
Resistance: 2,350,000 THB / 70,000 USD

Ethereum (ETH)

ETH is moving sideways, lacking positive catalysts, but a pullback could be seen as a buying opportunity. If the price stays above the support level at 2,100 USD, it could rise further, with the first resistance target at 3,000 USD, followed by 4,000 USD.

Support: 72,000 THB / 2,100 USD
Resistance: 104,000 THB / 3,000 USD

Velo (VELO)

VELO gained 30.09% last week with a strong rally. A price pullback could present a buying opportunity, with the first support level at 0.010 USD. If this level holds, the price could continue to rise, with a target at 0.018 USD.

Support: 0.25 THB / 0.010 USD
Resistance: 0.60 THB / 0.018 USD

THORChain (RUNE)

RUNE gained 20.99% last week, showing signs of an uptrend. However, it needs to break through the 5 USD resistance level to confirm this uptrend. If the price declines and falls below the 2.5 USD support, the trend could instead reverse to a downtrend.

Support: 90 THB / 2.5 USD
Resistance: 180 THB / 5.0 USD

Investment Trends

July’s inflation figures came in lower than expected at 2.9%, but the market didn’t react positively. This could possibly be due to the Fed’s rate cut already being anticipated through the CME FedWatch Tool. However, lower inflation should have a positive impact on the market in the medium term.

This week, the market's attention will be on the annual Jackson Hole meeting, with the Fed Chair scheduled to speak on the economic outlook on August 23.

BlackRock has overtaken Grayscale as the largest Bitcoin and Ethereum ETF manager. Reports from Goldman Sachs and Morgan Stanley indicate that institutional investors are interested in Bitcoin. However, there is short-term selling pressure from Bitcoin sales by governments and some Mt. Gox creditors. Despite this, the impact on Bitcoin's price has been minimal, and the price dip can be seen as a buying opportunity.

CryptoQuant revealed that Bitcoin’s funding rate on Binance has been consistently negative. Historical data shows that such negative funding rates often precede a significant Bitcoin rally.

The market is expected to continue sideways for a while until clearer signals on rate cuts emerge in September. Meanwhile, investors can continue to accumulate major big-cap coins like Bitcoin and Ethereum, as well as high-potential coins like Solana (SOL) and Binance (BNB).

References

Disclaimers

Cryptocurrencies and digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to their own risk profile.
Past returns or performance of digital assets do not guarantee future returns or performance.

Remark: views, information, knowledge, and opinions are considered as content that come from individuals involved. They do not constitute an expression of Bitazza and its employees. Neither the email nor the content presented constitute investment advice.

Topics: Beginner Crypto Weekly

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