The Bitcoin rally and the impact on Grayscale: the CCData report

According to CCData’s report, the value of bitcoin has recently risen by 7.56% in a short period of time, reaching a high of $35,000, largely as a result of speculation about BlackRock’s interest.

This change is also reflected in the significant reduction in the discount associated with Grayscale Bitcoin, which fell to its lowest level since it stood at 12.6% on 18th October. See below for full details.

Summary

• Bitcoin price soars 7.56% in one hour: Greyscale accelerates
• Bitcoin on the rise and the growth of the digital asset market
• The Rise of Bitcoin ETFs: The Future of Cryptocurrency Investing

Bitcoin price soars 7.56% in one hour: Greyscale accelerates

As expected, the digital asset sector saw major developments in October. In particular, six ETFs based on Ethereum futures began trading on 2 October, allowing investors to gain exposure to Ethereum futures.

Shortly afterwards, the price of Bitcoin jumped 7.56% in less than an hour to a high of $35,000 on rumours of BlackRock’s possible involvement.

These positive events had a significant impact on total assets under management (AUM) in digital asset-related products, which increased by 6.74% to $31.7 billion.

This is the first growth recorded since July 2023. This change was further evidenced by the significant reduction in the discount associated with grayscale Bitcoin, which fell to 12.6%, its lowest level since 18 October.

In addition, the total average daily volume of investment products related to digital assets increased significantly by 44.3% to $230 million in October.

Bitcoin on the rise and the growth of the digital asset market

On the 16th, the price of bitcoin rose sharply in response to speculation about the approval of the BlackRock Bitcoin Spot ETF. In less than an hour, it rose 7.56% to a high of $30,009, suggesting the potential impact of this approval.

Bitcoin then rallied strongly, rising 28.3% from the beginning of the month to 25th October. It is currently trading at around $34,000.

In the US, the digital asset market continued to dominate the scene, with AUM up 3.22% to $24.5 billion, or 77.3% of the market.

Canada also saw significant growth in AUM, accounting for 6.39% of the digital assets market with a total of $2.03 billion. Germany is another country that experienced significant growth of 16.0% to reach $698 million.

Among digital asset-related products, bitcoin-based products saw an 11.1% increase in AUM to $23.2 billion, giving them a market share of 73.3% (up from 70.5% in September).

In contrast, Ethereum-based products saw a decline, despite the recent launch of ETFs. Solana-related products saw the largest increase in assets under management, up 74.1% to $140 million.

Cryptocurrency-linked stocks saw a decline in October compared to bitcoin.

This is the second month in a row that these stocks have fallen against bitcoin. COIN (Coinbase Global Inc), RIOT (Riot Platforms Inc) and GLXY (Galaxy Digital Holdings Ltd) lost 0.56%, 4.93% and 3.01% respectively.

The Rise of Bitcoin ETFs: The Future of Cryptocurrency Investing

As expected, bitcoin price movements in recent weeks have been heavily influenced by bitcoin ETF news, with market participants anticipating the imminent approval of a bitcoin-based exchange-traded fund (ETF) by the SEC.

This approval is seen as a strong demand driver, as it would allow investors to gain direct exposure to bitcoin through an exchange-traded product.

SEC Chairman Gary Gensler, known for his controversial relationship with the digital asset industry, recently shared his views on the industry at the 2023 Securities Enforcement Forum.

However, with asset management giants such as BlackRock and Fidelity submitting applications, the chances of a bitcoin ETF being approved have increased significantly, with many predicting approval by the end of the year.

There are currently eight to ten applications for approval of bitcoin ETFs before the SEC, as confirmed by SEC Chairman Gary Gensler.

It is important to note that the timing of approval remains uncertain as each application has a different filing date. First up is Cathie Wood’s ARK Invest application, with the SEC comment period ending on 10 January 2024.

Regulators will have to make a decision by then.

Interest in bitcoin based ETFs has increased following the SEC’s decision not to appeal a court ruling that found Grayscale Bitcoin Investments’ application to convert its pre-existing bitcoin trust into a spot bitcoin ETF to be in error.

This development is a potential game changer for the digital asset sector.

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