Bitcoin Recovers: On Monday, the cryptocurrency market recovered from last week’s nervousness and rose again. Gains were observed across cryptocurrencies and crypto-related stocks as Bitcoin recovered and reclaimed the $70,000 mark.
Spot bitcoin ETF inflows have dried up, and the price of bitcoin had its biggest single-day decline in over two years, following a string of record highs in the preceding weeks. At the same time, ether came under scrutiny following rumors that the SEC is considering adding it to the securities register. Regardless of such bad news, BlackRock, a worldwide financial firm, announced a new Ethereum-based tokenized fund.
SEC Reportedly Targeted Ethereum
According to Fortune, the SEC is investigating whether or not The Ethereum network’s native cryptocurrency, ether (ETHEther), should be classified as a security.1 The SEC is reportedly seeking financial data and documentation about companies’ contacts with the Ethereum Foundation, a non-profit organization based in Switzerland that oversees the development and governance of the blockchain. This is according to companies that have been served subpoenas in this investigation.
The probe seemed to pick up steam after Ethereum’s switch to a proof-of-stake protocol was finalized in September 2022. Because the SEC views this network modification as similar to an investment contract, ether may be considered a security that falls within the agency’s jurisdiction.
This change could be a setback for the cryptocurrency industry’s plans to have spot ether ETFs approved by the SEC soon. However, as stated in a Forbes report, several applicants for the spot ether ETF have expressed their willingness to accept the crypto asset’s categorization as a security.
Bitcoin Experiences Largest Single-Day Drop Since FTX Collapse
Monday morning saw Bitcoin’s (BTC) price rise beyond $70,000, following steep drops the previous week. Bitcoin Recovers: After euphoria surrounding spot bitcoin ETFs propelled the price to repeated highs—the most recent being beyond $73,000 less than a week prior—the largest cryptocurrency fell below $62,000 by March 20.3
The steep decline last week has been noteworthy since. It was the biggest one-day decline for the cryptocurrency asset since November 2022. When the now-defunct FTX crypto market collapsed. The decline was more than 8%.
Kaiko Research reported on Monday that volatile price activity has been more concentrated during U.S. opening hours. The current spike in volatility follows an unusually low volume and volatility period, making the recent fluctuations feel more pronounced.
Also Read: Blockchain helps Bitcoiners invest.
According to BitMEX Research, net outflows for spot bitcoin ETFs reached all-time highs amid the steep price drop. 4 Last week, investors withdrew a total of about $326 million on Tuesday, and the following day, the figures were even worse, with over $261 million being pulled out.
Last week’s withdrawals were probably caused by a bankruptcy lawsuit involving crypto lender Genesis, according to Bloomberg analyst James Seyffart.5.Spot bitcoin ETF inflows have reached record highs for the past week.
BlackRock Launches Tokenized Fund on Ethereum
The Ethereum-based tokenized asset fund was introduced by BlackRock (BLK). Full backing for the BUILD token, the BlackRock USD Institutional Digital Liquidity Fund, comes from cash, U.S. Treasury bills, and repurchase agreements.6
Through the Ethereum network, token holders will be able to receive yield dividends every day. Bitcoin Recovers: Besides BitGo, Securitize, BNY Mellon, Coinbase Global (COIN), and Fireblocks are important to project members. Although the amount is unknown, BlackRock has invested in Securitize, a transfer agency.
BlackRock is reviewing an exchange-traded fund (ETF) application for Ethereum at the SEC. In a July 2023 interview with Fox Business, just after the financial giant filed its spot Bitcoin. ETF application CEO Larry Fink spoke about the potential of tokenization.7
What To Expect in the Markets This Week
Bitcoin has partially recovered from last week’s lows, but experts are still waiting for spot bitcoin. ETF inflows to turn positive again. It is worth mentioning that BlackRock’s iShares Bitcoin Trust (IBIT) is rapidly catching up to Grayscale. Bitcoin Trust (GBTC), in terms of AUM, may soon become the biggest spot in the Bitcoin ETF.
Cryptocurrencies and stocks linked to them tend to rise in tandem with bitcoin, as is typical. On Monday, Solana (SOL) rose about 10%, and Ether was approximately 7% in trading. Bitcoin Recovers: Monday afternoon saw a surge of over 8% in Coinbase stock and a roughly 20% increase in Microstrategy Inc. (MSTR) shares.
Analysts and prediction markets forecast fewer spot ETF approvals by May, which worries those hoping for a crypto market-wide breakout from bitcoin’s recent bull run.89Staking is questionable in Fidelity’s rewritten spot ether ETF proposal.
Also Read: 101crypto.co.uk
