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, but still well off all-time highs. With the Fed Reserve expected to lower interest rates this week, stocks, bonds, and the price of gold were all sharply higher.
Bitcoin and Ethereum were up 10.61% and 5.6% respectively over the seven days to 15 September. Bitcoin’s market capitalisation is up to around US$1.18 trillion. The global crypto market cap is at approximately US$2.1 trillion, while bitcoin’s market dominance ended the week at 56.6%.
| Price | High | Low | Change from previous week | |
| BTC (in US$) | $60,208 | $60,636 | $53,786 | 10.61% |
| ETH (in US$) | $2,423 | $2,455 | $2,244 | 5.60% |
Source: CoinMarketCap. As at 15 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
SWIFT reveals plan to integrate digital assets
The Society for Worldwide Interbank Financial Telecommunications (SWIFT) has announced plans for its members to access and transact with digital assets. The plan is to integrate central bank digital currency (CBDC) and tokenisation into its network following successful experiments of interoperability on its traditional infrastructure in recent years.
For the past 50 years, SWIFT has enabled fast, frictionless and secure transactions and increasing global interoperability. The next phase of their strategy will be to expand its interoperability to new systems, technologies, assets and currencies.
Among other features, SWIFT is looking to roll out multi-ledger Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) transactions on its global platform1.
Would a Trump win be good for bitcoin?
According to a report released last week by Standard Chartered analyst Geoff Kendric, bitcoin may see fresh all-time highs by year-end. The report suggests a Trump win in this year’s US elections could see bitcoin hit highs of $125,000. Under a Harris win, the bank sees bitcoin possibly reaching $75,000.
Kamala Harris is seen as more open to crypto than Joe Biden, but not as favourable as Trump, the self-branded ‘crypto president’. If elected, Trump has indicated that he plans on improving crypto regulation, replacing Gary Gensler, chair of the Securities Exchange Commission and keeping 100% of federally-owned bitcoin in a national stockpile2.
Bitfarms enters into a miner hosting agreement
Bitcoin mining company Bitfarms Ltd. has entered into a 10,000 miner hosting agreement with Stronghold Digital Mining. Under the agreement, Bitfarms will be looking to accelerate the deployment of 10,000 Bitmain T21 miners, which were originally scheduled to come online in December 2024.3
Bitfarms Ltd. is currently held in Betashares Crypto Innovators ETF (ASX: CRYP)4. According to the company’s website, Bitfarms is “a global Bitcoin self-mining company, running vertically integrated mining operations with onsite technical repair, proprietary data analytics and Company-owned electrical engineering and installation services to deliver high operational performance and uptime.”
Bitcoin (BTC): Mining Difficulty
This metric shows the current estimated number of hashes required to mine a block.
According to data from Glassnode, mining difficulty is once again at all-time highs, indicating that it takes more computing power and time to mine a block than historically has been the case.
Source: Glasssnode. Past performance is not indicative of future performance.
Bitcoin (BTC): Number of Addresses with Balance ≥ 0.1
This metric shows the number of unique addresses holding at least 0.1 coins.
According to data from Glassnode, there are 4,587,347 addresses with at least 0.1 BTC (as at Saturday 14th September). Although at all-time highs, this number has stagnated and isn’t much higher since the middle of January when the bitcoin ETFs were introduced in the US.
Source: Glassnode. Past performance is not indicative of future performance.
Altcoin news
In altcoin news, Ripple XRP is up over the seven days to 15 September by nearly 11% and up over 18% over the last year. Grayscale Investments has launched the XRP Trust in the US, giving investors exposure to XRP tokens. The trust is structured as a closed-end fund. The Head of Product at Grayscale highlighted the potential of XRP to transform financial infrastructure5.
XRP is the native token of the Ripple network, founded in 2012. Ripple aims to facilitate fast and low-cost cross-border transactions, and XRP is used within the network to facilitate transactions.
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.swift.com/news-events/news/streamlining-global-movement-digital-assets-and-currencies
2. https://markets.businessinsider.com/news/currencies/bitcoin-price-outlook-record-high-trump-harris-election-crypto-regulation-2024-9
3. https://www.globenewswire.com/news-release/2024/09/13/2946023/0/en/Bitfarms-Enters-into-10-000-Miner-Hosting-Agreement-with-Stronghold-Digital-Mining.html
4. As at 15 September 2024. No assurance is given that this company will remain in the portfolio or will be a profitable investment.
5. https://www.coindesk.com/markets/2024/09/12/xrp-spikes-8-as-grayscale-launches-xrp-trust-in-the-us/?_gl=1*1u6oozl*_up*MQ..*_ga*MTI5MzYxMTMxNi4xNzI2MTgzMzAx*_ga_VM3STRYVN8*MTcyNjE4MzMwMS4xLjAuMTcyNjE4MzMwMS4wLjAuMjA5MjIxODkzMQ..
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.
