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There have been further developments on the Bitcoin Spot ETF front this week. Issuers are continuing to meet with the SEC and amend their S-1’s accordingly. The main highlight is that essentially all issuers have moved to cash creations as opposed to in-kind, almost certainly off the back of SEC feedback. Cash creations involve authorised participants creating or repurchasing shares in exchange for cash as opposed to Bitcoin.
The downside of this is that this will likely make the potential ETF’s marginally more expensive for investors. Nonetheless, these amendments by issuers signal this continuous feedback loop with the SEC and bolster the approval timeline for January.
Looking at price action, Bitcoin has been range bound for the last 2 weeks at roughly 43 thousand dollars; an understandable cool down after an almost 30% rally in November. It is not uncommon to see altcoins outperform with a stagnant Bitcoin, but this has not been the case; Bitcoin dominance has remained steady at roughly 53% and only a few altcoins have seen major moves.
The most notable being Avalanche and Solana. Avalanche has benefitted from the Real World Asset partnerships with banking giants like JP Morgan and Citi, whilst Solana is benefitting from a huge increase in retail trading activity. Should Bitcoin continue to consolidate, we would expect dominance to decrease and the broader market to benefit.
