(Kitco News) – Monday morning has seen Bitcoin’s (BTC) price recover from a brief dip to support at $66,000 following Sunday’s breaking news that Iran's President Ebrahim Raisi died in a helicopter crash.
So far, the event does not look as though it will further inflame tensions in the Middle East and Europe, which gave investors a reason to breathe easier, as evidenced by the stock market trending higher to start the week after the major indices closed at record highs on Friday.
After hitting a low of $65,856 on Sunday afternoon, Bitcoin climbed its way back to a high of $67,540 early on Monday and traded at $67,440 at the time of writing.
BTC/USD Chart by TradingView
The week ahead includes multiple statements from Fed officials about the state of the U.S. economy and the outlook on interest rates. At the same time, stock watchers have their eyes on the quarterly earnings report from Nvidia on Wednesday, which is seen as a critical catalyst for the rally in stocks.
For crypto, the overall trend is higher after Bitcoin closed last week at approximately $66,300, marking a 7.8% increase from the previous week's closing value of around $61,500. “The week was characterized by low daily volatility, with most of the price increase occurring on Wednesday, while the rest of the week exhibited stable price action,” said Matteo Greco, Research Analyst at Fineqia International.
“Last week's positive price movement was also driven by increased demand for BTC Spot ETFs,” he noted. “After five weeks of low demand, resulting in about $1 billion in cumulative net outflows, BTC Spot ETFs saw about $950 million in net inflows last week, reflecting a demand level not seen since March.”
It was the first week in over a month that recorded five straight days of positive inflows, as even Grayscale’s ETF, GBTC, “which had been trading as a trust before converting to an ETF in January 2024, experienced its first weekly net inflow,” Greco said. This suggests that the trend of outflows, which totaled about $17.6 billion since January, may be reversing, aligning GBTC's inflow/outflow patterns with those of its competitors.”
“Trading volume for BTC ETFs remained relatively steady, with cumulative trading volume since inception reaching $262.6 billion and recording $8.6 billion during the week,” he added. “The trading volume aligns with figures from recent weeks, maintaining stability in the range of $1.5 to $2 billion in daily volume, following a period of exceptionally high trading activity in February and March.
ETF talk will likely be the focus of attention this week as the final decision date for multiple Ethereum (ETH) ETFs occurs.
“Regarding ETFs, the Securities and Exchange Commission (SEC) is expected to make a final decision on Ethereum (ETH) Spot ETFs this week, with the final deadlines for VanEck and Ark 21Shares filings on May 23rd and 24th, respectively,” Greco said. “This decision could trigger a series of approvals or rejections, as the SEC is likely to apply the same criteria to all seven ETH Spot ETF applications.”
“Market participants expect the SEC to withhold approval for these products, despite approving BTC ETFs in January,” he noted. “Concerns over the liquidity of ETH's spot and futures markets, along with its previous classification as a security by the SEC, contribute to skepticism about swift approval. If rejected, issuers would need to resubmit filings, potentially leading to approval in Q4 2024 or Q1 2025 at best.”
“Another emerging scenario involves the approval of the 19b-4 filings while ‘slow-playing’ the S-1s,” Greco added. “Both the 19b-4s and the S-1s must be approved by the SEC for the launch of Spot ETH ETFs.”
“The 19b-4s filing allows national security exchanges (e.g., NYSE or Nasdaq) to list new products, such as Spot ETH ETFs,” he explained. “The S-1s are the initial registration forms required for new securities offered to the public, providing detailed information about the company’s operations and products.”
Greco suggested that “the SEC might approve the listing on exchanges while delaying the initial registration form to gather more information on the ETH market and necessary risk mitigations. This decision could be favorable for issuers, as traditional finance investors seem to remain strongly focused on BTC, potentially reducing market activity around ETH Spot ETFs if launched next week.”
