The U.S. SEC's approval of Spot Bitcoin ETFs was a big step forward in the crypto industry. Now, Australia, led by Monochrome Asset Management, is expected to follow suit with the ASX likely approving similar ETFs soon. Hong Kong and Singapore are also showing interest in ETFs. On the other hand, the UAE, despite its interest in crypto, faces challenges in promoting Bitcoin ETF-type products.
In related news, Fidelity's FBTC ETF has seen record inflows. Additionally, the competition among ETF issuers has sparked a 'fee war,' with fund issuers reducing fees to attract investors. Anthony Scaramucci of Skybridge Capital also predicts a huge increase in Bitcoin's value post-halving, suggesting it could reach unprecedented levels based on historical trends.
U.S. Bitcoin ETF Approval Paving the Way for Asian Markets
The U.S. Securities and Exchange Commission's (SEC) approval of spot Bitcoin ETFs (Exchange-Traded Funds) is a significant development in the crypto space that is now expected to influence regulatory decisions in Asia and other regions. The approval positions the U.S. ahead in the industry, especially compared to Asia and Africa, while Europe and other nations already have ETFs. Asian countries, particularly the UAE, Singapore, and Hong Kong, have shown a lot of interest in becoming crypto hubs and are expected to respond to the U.S. development.
Australia is anticipated to be the next country to approve spot Bitcoin ETFs. The Australian Securities Exchange (ASX) is expected to grant approval for these ETFs as early as the first or second quarter of 2024. This anticipation is boosted by the fact that Australia already has exchange-traded products that provide exposure to spot crypto assets on Cboe Australia.
Monochrome Asset Management in Australia is preparing for the Monochrome Bitcoin ETF to be quoted soon. The Australian Securities and Investment Commission (ASIC) has played a key role in allowing products like ETFs in the past.
Hong Kong is another key player, with strong interest in spot crypto ETFs. Hong Kong's government is ready to consider applications for these products, and its position as a big financial center with deep capital markets is a factor that certainly attracts issuers of spot crypto ETFs.
Singapore's stance is more cautious, with a balance between favorable and protective regulations. While the Monetary Authority of Singapore (MAS) has not approved spot Bitcoin ETFs for retail investors, the U.S. approval might influence the city-state's decisions in the future.
On the other hand, the UAE, despite its interest in becoming a crypto hub, seems less likely to immediately promote Bitcoin ETF-type products. Challenges in the region include the need for sufficient market liquidity and traditional finance players' connectivity to UAE markets.
FBTC Leads with Record Inflows
In other Bitcoin ETF news, Fidelity's spot Bitcoin ETF, known as FBTC, has witnessed a massive inflow of investments, attracting $208 million on Jan. 29, according to provisional data from Farside Investors. This is a big achievement for the fund as it surpassed the outflows from the Grayscale Bitcoin Trust (GBTC) for the first time since its launch, except for the initial launch day. GBTC experienced a decrease in daily outflows, recording $192 million on the same day, which is a very notable drop from its peak of $641 million on Jan. 22.
The decrease in GBTC's outflows, which fell nearly 25% from $255 million on Jan. 26, coincides with the fund's conversion to a spot Bitcoin ETF on Jan. 11. This conversion resulted in an outflow of $95 million, the second-lowest since its re-launch. JPMorgan analysts have commented on the situation, noting that the outflows from GBTC have exerted downward pressure on Bitcoin's price. However, they suggest that this pressure might be waning a bit.
Meanwhile, the overall market for spot Bitcoin ETFs in the U.S. has been robust, with nine new ETFs recording a combined volume of $994.1 million on Jan. 29. This figure nearly doubles that of GBTC, which saw $570 million in volume. Among these, BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity's FBTC reported large daily volumes of $460.9 million and $315.4 million, respectively.
Interestingly, the competition in the spot Bitcoin ETF market has led to a 'fee war,' with fund issuers reducing fees to attract investors. Invesco and Galaxy Asset Management recently announced a fee reduction for their joint ETF, the Invesco Galaxy Bitcoin ETF (BTCO), from 0.39% to 0.25%. This move aligns BTCO's fees with those of competitors like BlackRock, Fidelity, Valkyrie, and VanEck, and includes an initial six-month period of zero fees or until the fund reaches $5 billion in assets.
This fee reduction trend is not limited to the U.S. market. In Europe, Invesco, WisdomTree, and CoinShares have also cut fees on their Bitcoin ETFs, aligning more closely with the competitive rates in the U.S.
Anthony Scaramucci Predicts Bitcoin Boom Post-Halving
The upcoming Bitcoin halving has also been a hot topic of conversation recently. Anthony Scaramucci, the founder and managing partner of Skybridge Capital, joined in on these conversations and projected an optimistic future for Bitcoin (BTC), suggesting that its value could soar to unprecedented levels after the upcoming halving event in April.
During a podcast hosted by Scott Melker, Scaramucci pointed to historical trends associated with Bitcoin halving cycles, where the number of new bitcoins entering circulation is reduced. He explained that traditionally, the price of Bitcoin multiplies by four, 18 months post-halving. Using this metric, he proposed that if Bitcoin is valued at $35,000 at the time of halving, a conservative estimate, its price could reach $200,000 if it hits $50,000, or even climb to $240,000 if it reaches $60,000 in April.
Scaramucci's long-term outlook for Bitcoin is even more bullish. He believes that Bitcoin could eventually match half of gold's market capitalization, which would push the price of a single Bitcoin to approximately $400,000.
