Bitcoin ETFs: What are they and how do they work?
Justin Arzadon
5 minutes reading time
- Digital assets
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Bitcoin, along with the broader crypto market, was higher over the last week, and hit a peak not seen in eight weeks. Since the mid-September Fed rate cut, sentiment has turned positive.
Bitcoin and Ethereum were up 4.04% and 2.03% respectively over the seven days to 29 September. Bitcoin’s market capitalisation is up to US$1.29 trillion. The global crypto market cap is at approximately US$2.29 trillion, while bitcoin’s market dominance ended the week at 56.4%.
| Price | High | Low | Change from previous week | |
| BTC (in US$) | $65,481 | $66,367 | $62,522 | 4.04% |
| ETH (in US$) | $2,640 | $2,719 | $2,530 | 2.03% |
Source: CoinMarketCap. As at 28 September 2024. Past performance is not indicative of future performance. Performance is shown in US dollars and does not take into account any USD/AUD currency movements.
Source: Glassnode. Past performance is not indicative of future performance.
Crypto news we’re watching
Blackrock-backed stablecoin
A new stablecoin being launched by Ethena Labs, UStb, will be fully backed by Blackrock’s USD Institutional Digital Liquidity Fund (BUIDL), in partnership with Securitize. UStb will invest its reserves into BUIDL, a tokenised fund that operates on the Ethereum blockchain, and invests in US dollars, US Treasury Bills and repurchase agreements. BUIDL is the largest tokenised fund to date, with over US$522 million in assets.
On X, Securitize posted: “This collaboration represents a key milestone in the evolution of tokenised finance, bringing together leading innovations in stablecoins and real-world asset tokenisation”1.
Binance founder released from prison
Changpeng Zhao ‘CZ’ was released from a US prison on Friday, a couple of days earlier than scheduled, as per federal guidelines, as his release day was due to fall on the weekend. CZ served 118 days, and still has his $60 billion fortune, which made him the wealthiest person behind bars in the US. CZ pleaded guilty to US anti-money laundering laws. In addition to his sentence, CZ also paid a $50 million dollar fine, while Binance received a $4.3 billion penalty2.
CRYP company spotlight
Cleanspark expands operations
Bitcoin miner Cleanspark announced last week that it is expanding its operations and has acquired two new mining sites based in Mississippi. The firm paid US$5.8 million to acquire the sites and should complete construction by the end of the year. This follows the announcement made just over a week prior, regarding acquiring seven facilities in Knoxville, Tennessee for $27.5 million3.
Cleanspark is currently held in Betashares Crypto Innovators ETF (ASX: CRYP)4. According to the company’s website, Cleanspark ‘own and operate multiple data centres that primarily run on low-carbon power4.’
Bitcoin (BTC): Realised Cap [USD]
Realised Cap values different parts of the supplies at different prices (instead of using the current daily close). Specifically, it is computed by valuing each UTXO by the price when it last moved.
According to data from Glassnode, realised cap has gone from $420 billion in mid-December to over $630 billion, indicating that there was significant amounts that changed hands at higher prices, pushing the price up.
Source: Glasssnode. Past performance is not indicative of future performance.
Bitcoin (BTC): Percent Supply in Profit
This metric shows the percentage of unique addresses whose funds have an average buy price that is lower than the current price. “Buy price” is here defined as the price at the time coins were transferred into an address. It represents the percentage of circulating supply in profit i.e. the percentage of existing coins whose price at the time they last moved was lower than the current price.
According to data from Glassnode, over 90% of the supply is in profit at current prices.
Altcoin news
In altcoin news, risk-on was evident given the move by meme-coins in the top-20 over the last week. The top performer was SHIB, up over 33%, followed by DOGE, returning over 17% over the last 7 days. The two coins are up 164% and 103% respectively over the last year.
A couple of factors that may have helped push the price higher for SHIB are SHIB’s burn rate, which is helping reduce the total supply, and the layer-2 scaling solution which recently passed 7 million blocks and continues to perform well6.
Investing in crypto assets or companies servicing crypto-asset markets should be considered very high risk. Exposure to crypto assets involves substantially higher risk when compared to traditional investments due to their speculative nature and the very high volatility of crypto-asset markets..
Investing in crypto assets or crypto-focused companies is not suitable for all investors and should only be considered by investors who (i) fully understand their features and risks or after consulting a professional financial adviser, and (ii) who have a very high tolerance for risk and the capacity to absorb a rapid loss of some or all of their investment. Any investment in crypto assets or crypto-focused companies should only be considered as a very small component of an investor’s overall portfolio.
References:
1. https://www.forbes.com/sites/digital-assets/2024/09/28/16-trillion-by-2030-blackrock-is-quietly-backing-a-radical-new-us-dollar-rival-amid-a-bitcoin-and-crypto-price-boom/
2. https://www.fxstreet.com/cryptocurrencies/news/bnb-sees-gains-as-binance-founder-changpeng-zhao-set-to-be-released-after-118-days-in-prison-202409272020
3. https://coingeek.com/btc-miner-cleanspark-expands-operations-in-mississippi/
3. https://www.cleanspark.com/about
5. As at 28 September 2024. No assurance is given that this company will remain in the portfolio or will be a profitable investment.
6. https://news.bitcoin.com/shiba-inu-price-rockets-20-brett-and-pepe-also-pumping-time-to-buy-meme-coins/
Off the Chain is published every second Tuesday. It provides the latest news on bitcoin and the rest of the crypto market, along with analysis and insights into the world of crypto.
It provides general information only and is not a recommendation to invest in any crypto asset, crypto-focused company or investment product.
