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Crypto market is reaching the new all-time high

Week in short:
Market at the all-time high again as Bitcoin ETFs continue to infiltrate the market and US continues to keep us happy with lots of positive news.

This week’s digest:

  1. Grayscale applied for the first-ever spot Bitcoin ETF
    As expected, Bitcoin ETFs continue to prosper. ProShares ETF launch was very successful with huge market demand. The second Bitcoin ETF from Valkyrie has also been launched, and many more are expected to be launched soon. However, the majority of them are still the futures ETF (not the spot ones). That is why the news of Grayscale, the world’s largest digital currency asset manager with an AUM of $53B+, applying for converting its Bitcoin Trust (GBTC) into an ETF is quite important for the market.
    So what? Principally, there is no large difference between spot and futures ETFs, especially for short-term trading. Still, the tracking error might be significant for longer periods. There is also a counterparty risk from the futures issuer’s side and negative roll return (because each time the futures contract expires, a premium is paid to roll over to the next contract). That is, for many long-term investors, spot Bitcoin ETFs with “physical” BTC as an underlying asset would be much more attractive, and we may see even more significant investment inflows.
    *Link [read, 2 min]
  2. Walmart, the world’s largest retailer, started to sell BTC for cash
    Another good news from the US — now you can buy Bitcoin in special ATMs inside Walmart stores. There are only 200 kiosks currently (as a part of the pilot project), and the fee is quite high (4% fee + 7% cash exchange fee), but still, it’s a good step towards wider crypto usage.
    So what? Buying cryptocurrency is not the easiest task for everybody, as many people struggle with their first steps there. That is why such initiatives as crypto ATMs located in popular retail stores (or the issuance of traditional financial instruments that provide exposure to the crypto market) are vital to increasing the user base of cryptocurrency and its market value.
    *Link [read, 3 min]
  3. Facebook launches a crypto wallet in partnership with Coinbase
    Crypto wallet from the world’s largest social network? Sounds promising. You may remember the recent FB’s attempt to create its own cryptocurrency Diem, which the US government almost killed. This is something different (at least they say so) because this new NOVI wallet works only with USDP stablecoin and it’s distanced from the Diem project (however, the government is still not happy and tries to stop FB). Let’s see where it goes.
    So what? There is a big chance that FB will capitulate again and close the pilot without scaling it. It would be definitely a bad sign for the market, but anyway, I don’t think it’s reasonable to expect that Facebook will be allowed to create some meaningful and large-scale crypto project as it could give them too much power considering the size of their user base. However, if they somehow find a way to proceed, it could give millions (or billions?) of people access to the crypto market.
    *Link [read, 2 min]



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