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Five Things to Know in Crypto This Week: BTC-Spot ETFs Enjoy 4 Week Inflow Streak

By:
Bob Mason
Updated: Jun 1, 2024, 05:58 GMT+00:00

Key Points:

  • The US BTC-spot ETF market extended the net inflow streak to four consecutive weeks for the week ending May 31.
  • Crypto went mainstream in US politics, with contributions from Ripple CEO Brad Garlinghouse grabbing the crypto headlines.
  • A New York jury found Republican Party front-runner Donald Trump guilty on all charges but can still end the era of regulation through enforcement.
Five Things to Know in Crypto This Week

In this article:

US Economic Data and Fed Jitters Leave BTC in the Red

Bitcoin (BTC) needs a bullish weekend to avoid a first weekly loss in three weeks. On Monday (May 27), BTC struck a high of $70,601 before a pullback to sub-$67,000.

From Monday to Saturday (June 1), BTC was down 1.16% to $67,652.

Economic indicators from the US impacted buyer demand for BTC, with FOMC members signaling possible delays to interest rate cuts.

On Friday, the US Personal Income and Outlays Report sent BTC into negative territory for the week. The US Core PCE Price Index increased 2.8% year-on-year in April after advancing 2.8% in March. Sticky inflation could force the Fed to push back the timing of an interest rate cut to curb consumer spending.

Despite recent FOMC member chatter and the Core PCE Price Index figures, the chances of a September rate cut increased. According to the CME FedWatch Tool, the probability of the Fed standing pat in September fell from 50.2% to 46.2% in the week ending May 31. The chances of a 25 basis point rate hike increased from 0.5% to 0.6%.

The Nasdaq Composite Index Index joined BTC in negative territory, falling by 1.10% in the week ending May 31. Despite the pullback, the Nasdaq ended May up 6.88%, with BTC advancing by 11.28%.

BTC in negative territory for the week.
BTC Weekly Chart 010624

BTC-Spot ETF Market Inflows Signal a Robust Demand Environment

In the week ending May 31, the US BTC-spot ETF market extended its weekly net inflow streak to four weeks.

The US spot ETF market brushed aside hawkish FOMC member chatter and the risk of a higher-for-longer Fed rate path.

According to Farside Investors, the US BTC-spot ETF market saw total net inflows of $170.9 million in the week ending May 31.

  • Grayscale Bitcoin Trust (GBTC) saw net outflows of $260.6 million compared. In the previous week, GBTC reported net outflows of $20.5 million.
  • ARK 21Shares Bitcoin ETF (ARKB) had net outflows of $91.8 million. ARKB last reported weekly outflows in the week ending May 3.
  • Fidelity Wise Origin Bitcoin Fund (FBTC) reported net inflows of $177.0 million. (Previous week: +$227.2 million).
  • iShares Bitcoin Trust (IBIT) saw net inflows of $297.8 million (Previous week: +$182.1 million).
  • Notably, IBIT flipped GBTC to become the top-ranked Bitcoin Fund. Since launch, IBIT saw $16,651.6 million in net inflows, while GBTC saw net outflows of $17,901.7 million.

US ETH-Spot ETF Issuers Move Closer to Launch

After the 19b-4 approvals for ETH-spot ETFs, issuers filed S-1 forms for SEC approval. BlackRock (BLK) set the pace, filing its S-1 application for iShares Ethereum Trust mid-week.

Despite progress toward an ETH-spot ETF market, ARK Invest withdrew its ETH-spot ETF application on Friday (May 31). In May, Grayscale pulled its application for the Grayscale Ethereum Futures ETF. The ARK withdrawal could raise some doubts about demand.

Bloomberg Intelligence Senior Analyst Eric Balchunas speculated about the likely demand for US ETH-spot ETFs relative to US BTC-spot ETFs, projecting a 20% share, saying,

“Here’s a look at ether’s share vs bitcoin in different spots where there is apples to apples comp. The poor showing of the eth futures is big part of my calculus. That said, the stronger showings in Europe have me splitting dif with final prediction of 20% share.”

ETH Share of ETF market
ETH vs. BTC ETF Market Share

From Monday (May 27) to Saturday (June 1), ETH was down 1.60% to $3,765. Despite the weekly loss, ETH ended May up 24.74%.

ETH faces a weekly loss.
ETH Weekly Chart 010624

Ripple Contributions Highlight Significance of the US Presidential Election

On Wednesday (May 29), Ripple CEO Brad Garlinghouse announced a $25 million contribution to Fairshake. Fairshake supports candidates in the US committed to securing the US as the home to innovators building the next generation of the internet.

Republican Party front-runner Donald Trump planted crypto into the US Presidential Election Race, saying,

“If you like crypto in any form…and it comes in many forms…if you’re in favor of crypto, you better vote Trump.”

Before the launch of US BTC-spot ETFs, 52 million Americans owned crypto. The Trump plug could also influence the Biden administration to reconsider its position on crypto and innovation.

On Thursday (May 30), Donald Trump became the first former President to be found guilty on felony charges. Despite the guilty verdicts, Trump remains the Republican Party front-runner, carrying the hopes of the crypto market.

There were also SEC vs. Ripple case-related updates for investors to consider. On Wednesday (May 29), Ripple filed its reply letter, supporting the Motion to Seal. Ripple strengthened its argument to seal non-public inflation, including its financial statements.

After a court ruling on the Motion to Seal, the US courts will decide the penalty Ripple must pay for breaching US securities laws.

Moreover, investors expect the SEC to appeal against the Programmatic Sales of XRP ruling after the case. The SEC plan remains an XRP headwind. However, shifting sentiment toward crypto on Capitol Hill could end SEC plans for an appeal and fuel speculation about an XRP-spot ETF market.

From Monday (May 27) to Saturday (June 1), XRP was down 1.86% to $0.5184. Despite the weekly loss, XRP saw gains of 3.30% in May.

XRP in the red for the week.
XRP Weekly Chart 010624

Other News

On Friday (May 31), US President Joe Biden vetoed SAB 121. In an official statement, President Biden said,

“My Administration will not support measures that jeopardize the well-being of consumers and investors. Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation.”

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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