This Week's Crypto Update: BTC-Spot ETFs and SEC vs. Ripple

Highlights

• Bitcoin is experiencing a 2.62% decrease for the week, currently at $42,899.
• On Wednesday, the SEC gave the green light to 11 BTC-spot ETFs, causing Bitcoin to reach a peak of $49,023. However, outflows from the ETFs subsequently drove Bitcoin back down to below $42,000.
• Growing speculation around an XRP-spot ETF countered the legal developments in the SEC v Ripple case.

Crypto Market Cap Reaches Highest Point Since April 2022

The overall cryptocurrency market cap surged by 1.90% to $1,626 billion from Monday to Saturday. The SEC's approval of 11 BTC-spot ETFs on Wednesday sparked increased interest in BTC and alternative cryptocurrencies among buyers.

Despite this, the week's gains were tempered by data pertaining to BTC-spot ETFs, heightened scrutiny from US lawmakers, and statements made by SEC Chair Gary Gensler.

Crypto Market Cap Weekly Chart 130124

SEC Grants Approval for Initial BTC-Spot ETFs

The SEC sanctioned the first group of BTC-spot ETFs, which comprised:

• Bitwise Bitcoin ETP Trust – BITB
• Fidelity Wise Origin Bitcoin Trust – FBTC
• iShares Bitcoin Trust – IBIT
• ARK 21Shares Bitcoin ETF – ARKB
• Franklin Bitcoin ETF – EZBC
• Valkyrie Bitcoin Fund – BRRR
• Invesco Galaxy Bitcoin ETF – BTCO
• VanEck Bitcoin Trust – HODL
• Wisdomtree Bitcoin Trust – BTCW
• Grayscale Bitcoin Trust – GBTC
• Hashdex Bitcoin ETF – DEFI

Bitwise Bitcoin ETP Trust (BITB) saw the highest inflows on the first trading day, amounting to $237.9 million, followed closely by Fidelity Wise Origin Bitcoin Trust (FBTC) with $227.0 million. iShares Bitcoin Trust (IBIT) trailed behind with inflows of $111.7 million.

In contrast, Grayscale Bitcoin Trust (GBTC) experienced substantial outflows, totaling $579 million by the second day of trading.

The outflows from GBTC impacted buyer demand for BTC on Friday, resulting in a 7.57% decline. The day closed with BTC at $42,907, having dropped to a low of $41,659 before stabilizing. Throughout the week, from Monday to Saturday, BTC decreased by 2.62% to $42,899.

BTC Weekly Chart 130124

Differing Responses from US Legislators to BTC-Spot ETF Endorsements

There was visible discord on Capitol Hill as lawmakers responded to the SEC's validation of BTC-spot ETFs.

Senator Elizabeth Warren and Senator Cynthia Lummis exhibited contrasting perspectives on cryptocurrencies. Senator Warren initiated a new campaign against cryptocurrencies by urging lawmakers to endorse the Digital Asset Anti-Money Laundering Act. This legislation seeks to enforce banking-style regulations within the cryptocurrency market and may grant the SEC the statutory power to oversee the crypto sector.

US Legislators Direct Scrutiny at SEC Chair Gary Gensler Due to Compromised Account

BTC responded to the announcement by reaching a peak of $48,033 before declining. The SEC confirmed that the account had been compromised, causing BTC to drop to $45,016 before stabilizing.

The House Committee on Financial Services has mandated the SEC to conduct a briefing by January 17 to address the unauthorized tweet.

Latest Developments in SEC v Ripple Case and XRP-Spot ETF Speculation

In the ongoing SEC v Ripple case, the SEC filed a Motion to Compel on Thursday, seeking court orders for Ripple to disclose its 2022-2023 financial statements and post-complaint contracts related to XRP sales to institutional investors.

Both the SEC and Ripple are engaged in remedies-related discovery within the legal proceedings.

Simultaneously, discussions regarding the potential launch of an XRP-spot ETF have intensified. However, uncertainties surrounding a potential SEC appeal against the ruling on the Programmatic Sales of XRP could potentially postpone the submission of an XRP-spot ETF application. Despite this, XRP demonstrated a 3.79% increase from Monday to Saturday, despite facing a 5.35% decline on Friday.