Welcome back to Distributed Ledger. I'm Frances Yue, a crypto and markets reporter, bringing you the latest updates in the world of cryptocurrency.
Increased Interests in Crypto Assets
According to CCData, a leading crypto data provider, there has been a significant surge in investor interest in crypto assets. With the introduction of new bitcoin exchange-traded funds (ETFs) last month, the total spot trading volume on centralized crypto exchanges has risen by 4.5% to reach $1.4 trillion in January. This marks the fourth consecutive month of growth and is also the highest monthly spot trading volume since June 2022.
Insights from Bitstamp USA CEO
To gain further insights into this trend, I had the opportunity to chat with Bobby Zagotta, the chief executive of Bitstamp USA, a prominent crypto exchange.
Bitstamp witnessed an especially sharp increase in crypto trading volume and the number of new institutional and individual users in the fourth quarter of last year. This surge was primarily driven by investors anticipating the launch of the new ETFs, according to Zagotta. The exchange has continued to experience strong volume and a growing number of users in January.
While Bitstamp does not list any of the bitcoin ETFs, it plays a crucial role as a liquidity provider for these products. As Zagotta explained, crypto exchanges provide liquidity by supporting ETF sponsors and other institutional players in the creation or redemption of ETF shares, which are backed by bitcoin. This mechanism is similar to how bond ETFs operate.
The Impact of Bitcoin ETFs
The introduction of bitcoin ETFs has resulted in increased buying and selling activity in the crypto market. This surge in trading has significantly boosted the overall trading volume on crypto exchanges, as stated by Zagotta.
Moreover, Zagotta expects to see the full impact of bitcoin ETFs gradually unfold over the next six to 24 months, with an increasing level of institutional participation.
Larry David's Regrets Over FTX Crypto Ad
Comedian Larry David admitted to his foolishness for starring in a cryptocurrency ad by the now defunct exchange FTX in 2022. The ad, which premiered during the 2022 Super Bowl, featured David boasting about his infallibility regarding famous inventions throughout history.
Reflecting on the incident during a recent red carpet event for the twelfth season of his HBO show "Curb Your Enthusiasm," David revealed that his friends had convinced him it was a great idea to do a crypto ad at the time. Unfortunately, he acknowledged, "like an idiot, I did it." As of press time, David's agent has not responded to multiple emails and phone calls. It remains unclear whether David plans to return the fees he received from the FTX ad.
In November 2022, FTX filed for bankruptcy, and its co-founder Sam Bankman-Fried was later found guilty on seven counts of fraud and conspiracy in November 2023. For more details on this story, Weston Blasi wrote a comprehensive piece available here.
ETH versus BTC
According to Mark Newton, head of technical strategy at Fundstrat, it may be advantageous for investors to favor Ethereum over Bitcoin as cryptocurrencies undergo potential consolidation in March. This preference arises from the anticipation of potential approval for ether exchange-traded funds (ETFs) in the coming months.
Newton highlighted how the ether-to-bitcoin price ratio has recently reached multi-day highs for the second time within the past two weeks. He further asserted that this ratio appears to be establishing a bottoming process, indicating a potential upward trend in the weeks ahead.
Crypto in a Snap
Over the past seven days, Bitcoin experienced a modest 0.5% increase, while Ether saw a more substantial gain of 3.5%, according to CoinDesk data.
PREVIOUS POST
