Upcoming SEC Bitcoin ETF Decisions | Morgan Stanley Report "The Case for Cryptocurrency As an Investable Asset Class in a Diversified Portfolio
Top stories and news you should know in the bitcoin, crypto, and decentralized markets
The Securities and Exchange Commission has less than 40 days to approve, deny, or extend the review period for VanEck’s 19b-4 Form for the First US Bitcoin ETF
There are numerous of other companies that have also filed for their own bitcoin ETFs awaiting a decision too including WisdomTree, NYDIG Asset Management, Valkyrie Digital Assets, Skybridge and First Trust, Goldman Sachs, and Fidelity Investments
Drilling Down Deeper
The final countdown?
In the United States of America, investors are eagerly awaiting the decision from the SEC regarding a flurry of ETF filings that have been pushed out by numerous organizations wanting to offer their clients and customers bitcoin. Luckily, the US will not be totally left behind since Grayscale is already based, operates, and is regulated here in America with numerous products on the market to give investors access to bitcoin and crypto assets from their brokerage and retirement accounts. When it comes to an exchange traded fund though, we are currently lagging behind Canada and South America who have already had their regulatory bodies give the thumbs up to these sorts of ETFs.
Commentary from the CFTC, FINCEN, IRS, SEC, Treasury, and licensing from New York with its BitLicense has given quite a bit of regulatory clarity to the US and its investors as well as companies already. So, it seems that systemic risks have been mitigated fairly well already having heard more regulator comments on these assets and the asset class given there is far more data available in these markets as well as the shift in institutional participation late last year. It has also been relatively clear that many regulatory bodies have established that they will not launch an entirely new set of rules and regulations around bitcoin and crypto specifically, feeling that there is enough guardrails for businesses to operate within the existing frameworks provided by them thus far.
The SEC, in particular, may still be looking at market dynamics to see if they are maturing and need some room to grow still before approving any ETF. Many of these filings in the pipeline have come from well established and reputable companies in the industry. It is still anyone’s guess though, the regulators may want further “clarity.”
Given the plentiful interest around an ETF, investors are looking for any positive attitudes or signals from regulators as more companies have been putting BTC on their balance sheets. If one or many would be approved, it could be a major catalyst for bitcoin with all the buying necessary to satiate investors’ demand. Then again, it could also be a boon for the Grayscale Bitcoin Trust (GBTC) that has been trading at a discount to its NAV if they kick the decision further down the road.
The age of bitcoin and chaos is upon us!
TL;DR The SEC is set to make a decision in this next quarter that could possibly light the fuse for $100K bitcoin, historically denials have also been bullish for its price action.
News You Should Know
Beeple Immediately Converted His $53 Million NFT Earnings from ETH to USD
The Wisconsin-based artist who sold an NFT (non-fungible-token) recently for a whopping $69 million stated that he believes they are “absolutely” in a bubble. After receiving the proceeds from the sale, Mike Winklemann (aka Beeple) quickly dumped his ether for cold, hard US dollars after becoming “spooked” by ETH’s price volatility…
Biden Team Prepares $3 Trillion in New Spending for the Economy
The new administration is considering splitting the proposed recovery plan into two bills that would invest in infrastructure, education, work force development, and fighting climate change with the high hopes of enhancing productivity in the US economy. In the short-term, this will likely be cheered on by the Democrats and reviled by Republicans who do not see it doing much for vulnerable people and businesses struggling after the pandemic and looking toward the long-term economists view it as the “end of money”…
Morgan Stanley Report “The Case for Cryptocurrency As an Investable Asset Class in a Diversified Portfolio”
In their recent report, Morgan Stanley told its clients that the “threshold is being reached” when it comes to bitcoin gaining widespread adoption as well as noting that cryptocurrency is becoming an “investable asset class.” Considering that bitcoin possesses a unique low-to-negative correlation to traditional asset classes like cash, bonds, and stocks, their global investment committee now considers it a viable portfolio asset class for *qualified* investors. Morgan Stanley’s report recommends gaining exposure through publicly listed companies, probably so they charge commissions and fees on them, when any “unqualified” and unwashed retail pleb can gain direct exposure to these assets by just opening an account on their phone or computer with regulated exchange like Coinbase, Gemini, or Kraken…
“We view such interest as a type of necessary validation, confidence and ‘institutionalization’ that ends up being self-reinforcing, ensuring that cryptocurrencies continue to scale and evolve. Combined with an expanding regulatory framework, the availability of liquid and insured products, and a sufficient pool of liquidity, the involvement of a wide swath of well-known market participants, in our opinion, helps cross a threshold that enable cryptocurrencies to achieve and maintain the status of a unique asset class.”
— Morgan Stanley Wealth Management Global Investment Office, Special Report
TOTAL CRYPTO ASSET MARKET CAPITALIZATION = $1.735T
Bitcoin Dominance = 59%
Ethereum Dominance = 11%
(over 8,900 cryptocurrencies)
Last Close = $55,100 (as of Mar. 26, 2021)
Market Capitalization = $1.029T
YTD Performance = ~90%
Last Close = $1700 (as of Mar. 26, 2021)
Market Capitalization = $196.191B
YTD Performance = ~133%
Bitcoin closed the week on a rather dull note despite finishing in a bullish fashion, and much of the BTC flow this week is said to be buy-side driven that crushed the 4-day winning streak for sellers. Ethereum had almost zero interest with respect to altcoins with majority of the week’s activity being attracted to bitcoin’s dip. Crypto Assets have been dominated by BTC with few market participants and the NFT market is still very much frothy that is keeping the ETH ecosystem flush. Exchange data shows that altcoins led the way this week in gains, which is a little odd provided the fact that bitcoin and ethereum had less than stellar performances over the week even though it was full of positive headlines. Looking at this week, BTC could potentially trend sideways for the next week before making any meaningful bounce to the upside.
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*Walter Bloomberg @DeItaoneFED'S POWELL: LEVEL OF DEBT TODAY IS NOT UNSUSTAINABLE, NO QUESITON OF U.S. BEING ABLE TO SERVICE ITS DEBT RIGHT NOW