Last week, Bitcoin (BTC) rose 5.9% to close at around $37,000 compared to the previous week’s closing price of $35,000. This week has seen solid price movements, with BTC seeing fluctuations with prices increasing continuously every day from Monday to Friday. The highest trading price was observed on Thursday, reaching nearly $38,000. After this peak, prices declined slightly and stabilized at around $37,000 from Friday through the weekend.
BTC dominance, which measures Bitcoin’s market capitalization relative to the overall digital asset market, fell for the second consecutive week, settling at around 52.3%. This corresponds to a decrease of 0.7% compared to the previous week and highlights the continued dispersion of liquidity among more speculative assets. This is characteristic of a phase in which investors express confidence in the market and engage in riskier trades.
Trading activity continues to soar, with cumulative daily volume on centralized exchanges reaching $31.4 billion, calculated on a seven-day moving average. This figure is the highest since the end of March and reaffirms that the recent uptrend is driven by strong trading activity.
A notable aspect is the heavy involvement of traditional finance in the recent uptrend. Chicago Mercantile Exchange (CME)’s BTC open interest exceeded 100,000 contracts for the first time, surpassing Binance and becoming the top exchange in terms of BTC open interest. This strong presence of traditional financial investors is evident in the Grayscale Bitcoin Trust (GBTC) discount rate, which has now narrowed to 10.3%, its lowest level since August 2021. .
The increase in traditional financial activity related to BTC confirms the confidence market investors currently have regarding the approval of a future BTC spot ETF. It is important to note that the first final decision deadline from the SEC on the 21Shares BTC Spot application is scheduled for January 10, 2024. Presumably, to avoid giving issuers a first-mover advantage, the SEC will make a final decision to approve or deny all applications by this date. Additionally, applications for digital asset spot ETFs continue, with recent news including BlackRock’s ETH Spot ETF following Grayscale’s decision to apply for conversion from Ethereum Grayscale Trust (ETHE) to ETH Spot ETF. It has been revealed that he has applied for an ETF. How many weeks ago?
The surge in prices and trading activity, particularly through traditional financial channels, coupled with a consistent decline in the GBTC discount and significant net inflows observed in ETPs underlying digital assets, has led investors in the market to bet on approval. It suggests that Securing approval from the SEC is likely to attract significant investment from traditional finance, bringing an influx of new investors and potentially strengthening digital assets and pushing them into a more recognized asset class. . Conversely, a rejection would likely cause a short-term economic downturn, given the general expectation in favor of approval and the subsequent positioning of market participants, which will be heavily influenced by this expectation.