Market Update - January 12 2024

12 Jan

1. Spot bitcoin ETFs begin trading on US exchanges: On Wednesday, the SEC approved the launch of 11 spot bitcoin ETFs, and trading launched on Thursday. The approval of US-based spot bitcoin ETFs marked a historic day for bitcoin and crypto as a whole, opening the door to an entirely new set of retail and institutional investors. As trading started Thursday morning, BTC rose to 49K before paring back gains to sit below 45k by Friday morning. Over $4.6 billion traded across all spot bitcoin ETFs on Thursday, likely setting a record for the highest day-one volume for a single type of ETF.
   
   
2. Ether surges as focus shifts to potential ether ETF: Ether (ETH) had been struggling in comparison to BTC over the past few months as attention centered around the bitcoin ETF applications, with the ETHBTC pair hitting its lowest level since April 2021 at 0.04788. However, following Tuesday’s bitcoin ETF head fake, the pair jumped to 0.052 suggesting a rotation out of BTC and into ETH for a catch up play and an expectation that the narrative will shift toward a potential ether ETF approval later this year. This was further evident on the actual approval Wednesday, with the ETHBTC continuing to rally higher, currently trading near 0.06 as of Friday morning.
   
   
3. Inflation ticks up as interest rate cuts expected in 2024: US equities rose steadily this week as investors awaited inflation data released on Thursday. Thursday’s data showed a mild 0.3% increase in the consumer price index (CPI) for December, reflecting a 3.4% yearly increase. Estimates had been for a 0.2% December increase and a 3.2% annualized increase.
   
   
4. Altcoins perform well as total crypto market cap nears $1.8 trillion: Much of the wider crypto market saw price appreciation this week, with some leveraged ETH and BTC plays showing good returns. Ethereum Classic (ETC) is trading up more than 55% over the past seven days, while Lido DAO (LDO) added 20% over the same period. The total crypto market capitalization is now approaching the $1.8 trillion mark, its highest level since April 2022, prior to the Terra/LUNA collapse.
   
   
5. Circle, USDC issuer, files for initial public offering (IPO): On Thursday, Circle announced that it had filed a confidential S-1 document with the SEC, as it seeks to launch an initial public offering (IPO). While the announcement was light on details, Circle had previously announced in 2021 that it planned to go public via a SPAC, with a $9 billion valuation as of February 2022.
   

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