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The Daily: US Bitcoin ETFs witness record outflows, SEC approves first spot Bitcoin and Ethereum combo funds and more

The Daily: US Bitcoin ETFs witness record outflows, SEC approves first spot Bitcoin and Ethereum combo funds and more

The BlockThe Block2024/12/19 16:00
By:The Block

Quick Take U.S. spot Bitcoin ETFs experienced a record $680 million worth of net outflows on Thursday, breaking a 15-day, $6.7 billion streak of positive flows. The SEC approved filings from the Nasdaq and Cboe BZX Exchange to list and trade shares of crypto index ETFs from Hashdex and Franklin Templeton, respectively. The cryptocurrency market continued to drop sharply following Fed Chair Jerome Powell’s hawkish remarks on Wednesday about slower projected rate cuts in 2025. The following article is adapte

The Daily: US Bitcoin ETFs witness record outflows, SEC approves first spot Bitcoin and Ethereum combo funds and more image 0

It's Friday! In today's newsletter, U.S. spot Bitcoin ETFs witness record daily outflows, the SEC approves the first spot Bitcoin and Ethereum combo funds, the crypto market downturn continues and more.

Meanwhile, Deribit and Bitget CEOs debate how decentralized and centralized exchanges can coexist.

Plus, CoinDesk staffers wrote a letter to owner Bullish calling a Justin Sun story retraction "outrageous" ahead of leadership firings.

Let's get started.

US spot Bitcoin ETFs see record daily outflows

U.S. spot Bitcoin ETFs experienced a record $680 million worth of net outflows on Thursday , breaking a 15-day, $6.7 billion streak of positive flows.

  • The prior daily outflow record was $563.7 million, set on May 1, when bitcoin tumbled to a low of around $56,000.
  • Fidelity's FBTC led the exodus with more than $208 million in outflows on Thursday, followed by Grayscale's Bitcoin Mini Trust with over $188 million.
  • BlackRock's IBIT reported zero flows, while WisdomTree's BTCW was the only ETF to log net inflows for the day, adding $2 million.
  • Trading volume for the 12 spot Bitcoin ETFs rose sharply to $6.3 billion, up from $5.9 million the previous day amid the most significant bitcoin sell-off since August.
  • Meanwhile, U.S. spot Ethereum ETFs recorded $60.5 million in net outflows on Thursday, marking the end of their own 18-day positive run, totaling $2.4 billion.

SEC approves first spot Bitcoin and Ethereum combo ETFs

The SEC approved filings from the Nasdaq and Cboe BZX Exchange to list and trade shares of crypto index ETFs from Hashdex and Franklin Templeton , respectively.

  • The funds will initially hold bitcoin and ether, though additional cryptocurrencies could be added, pending regulatory approval, with Hashdex suggesting AVAX, LINK and LTC as potential options.
  • "Launch likely in January," Bloomberg ETF analyst Eric Balchunas said. "They're market cap weighted so 80/20 BTC/ETH approx. Notable that Hashdex and Frankie are first. Good for them."
  • "Will be interesting to see if BlackRock or others attempt to piggyback on this and launch similar ETFs," The ETF Store President Nate Geraci noted. "Regardless, I expect there will be meaningful demand for these products. Advisors LOVE diversification. Especially in an emerging asset class such as crypto."

Crypto market downturn continues

The cryptocurrency market continued to drop sharply following Fed Chair Jerome Powell's hawkish remarks on Wednesday about slower projected rate cuts in 2025.

  • Bitcoin fell over 15% from a high of $108,000 ahead of Powell's speech to a low of around $92,000 at one point on Friday before recovering, while the broader crypto market suffered greater losses.
  • "I would have expected the correction to occur later, possibly in January," Nansen Research Analyst Aurelie Barthere told The Block. "The Fed's hawkish stance and political uncertainty around fiscal priorities in the U.S., including ongoing shutdown negotiations, likely contributed to the sell-off."
  • "So far, the correction seems orderly, with no signs of panic in trading volumes, which suggests the potential for buy-the-dip activity, so the correction seems normal and healthy after crypto outperformed all other financial assets post-Nov. 5," Barthere added.

Japan's Metaplanet raises $61 million via bonds to buy more bitcoin

Japanese investment firm Metaplanet has raised another $60.6 million through two bond issuance tranches to buy more bitcoin .

  • "These funds will accelerate bitcoin purchases originally planned for 2025 into the current year," Metaplanet CEO Simon Gerovich said.
  • The bonds, maturing in June 2025, carry zero interest and mark a continuation of the firm's strategy to adopt bitcoin as a treasury reserve asset, initially announced in May.
  • As of Dec. 18, Metaplanet holds just over 1,142 BTC worth approximately $110 million, reflecting an aggressive bitcoin acquisition strategy that has seen the company's stock price rise 1,890% year-to-date.
  • However, Michael Saylor's MicroStrategy remains the largest public corporate bitcoin holder, owning 439,000 BTC, according to its latest SEC filings.

Copper withdraws application to register with UK financial regulator

Crypto custody firm Copper has withdrawn its UK registration application with the country's Financial Conduct Authority and is shifting its focus to international hubs like Switzerland, Hong Kong and Abu Dhabi, according to Bloomberg.

  • Under its new CEO Amar Kuchinad, the London-based firm, chaired by former UK Chancellor of the Exchequer Philip Hammond, also plans to pursue regulatory approvals in the U.S., buoyed by pro-crypto Donald Trump's election victory, amid increasing global competition to attract crypto businesses.
  • The UK's Labour government is introducing a new regulatory framework to try and stay competitive, including rules for stablecoins and staking services.

Looking ahead to next week

  • UK GDP figures are released on Monday. U.S. jobless claims data are out on Thursday.
  • Markets close early on Tuesday and all day Wednesday for Christmas.

Never miss a beat with  The Block's daily digest  of the most influential events happening across the digital asset ecosystem.


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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