First Mover Asia: Bitcoin Awaits Its Spot ETF in Absence of a Macro Catalyst: Crypto CEO

Good morning. Here’s what’s happening:

Prices: Bitcoin, which was trading near $29.2, has resisted the influences of recent macroeconomic events, but may find its missing catalyst in a possible spot BTC ETF, says Mao Shixing, co-founder and CEO of custodian Cobo.

Insights: Even as bitcoin shrugs off macroeconomic events, at least one indicator is pointing up, writes CoinDesk analyst Glenn Williams. Also, Tribe Capital’s Boris Revsin sees a DeFi resurgence.

Crypto Opens Flat in Asia; Bitcoin Is Shy of $30K

Markets in Asia aren’t moving much as the region begins its trading day.

Bitcoin is up 0.2% to $29,167, according to CoinDesk data, while ether is up 0.4% to $1,856.

“At present, the cryptocurrency market is in a phase lacking a coherent narrative logic, heavily influenced by macro and regulatory factors. One significant influencing factor is the application of traditional institutions for a Bitcoin ETF,” Mao Shixing, co-founder and CEO of custodian Cobo told CoinDesk in a note.

Grayscale’s influx of US dollars sparked a Bitcoin rally in 2021 and 2022, and with traditional financial institutions likely to receive approval for cryptocurrency spot ETFs by Q1 of 2024, he said in the note while anticipating that the launch of one or two ETFs with substantial liquidity, reestablishing compliant funding channels in North America.

“When a large number of ETFs are approved, from the perspective of traditional asset allocation or risk aversion, directly purchasing ETFs from these brokerage banks means a substantial amount of funds will flow into major assets like Bitcoin and Ethereum,” he said.

“This will be a crucial event.”

Vivien Fang, head of financial products at Bybit, said that liquidity volatile and uncertain “it’s still too early to call for a bull market in digital assets.”

“This is because many central banks are still tightening, and China’s policy is still unclear,” she continued. “However, these ranges represent excellent accumulation zones for those with a long-term outlook.”

Meanwhile, Coinglass data shows that in the last 12 hours, $15.45 million of shorts have been liquidated in comparison to $10.73 million in longs.

Crypto markets aren’t reacting the same way they once did to macroeconomic events. Consider the two most recent U.S. central bank interest rate hikes in May and March. They resulted in relatively mild price moves of 1.13% and -2.87%. The reaction to recent inflation and GDP data was similarly tame, with BTC moving just -0.74% and 1.16% respectively. All told, crypto markets have likely priced in Wednesday’s anticipated move. More interesting for traders is BTC’s price declining below the lower range of its Bollinger Bands, indicating that its price could move higher – albeit just slightly. Bollinger Bands are a technical indicator that tracks an asset’s 20-day moving average, and plots price levels two standard deviations above and below the average. As an asset’s price is expected to stay within two standard deviations of its average, 95% of the time, a breach of the external bands is statistically significant. Traders may be eyeing an upside target of $30,000 level, above the current support of $29,000.

In the summer of 2020, decentralized finance (DeFi) projects flourished, reaching a high of $248.84 billion in total value locked by the following fall. The sector lost its allure amid the crypto winter. Now can DeFi recover some of its former glory? Boris Revsin, managing partner of Tribe Capital, an investment firm with over $1.6 billion in assets under management, thinks it can as more infrastructure gets developed in more open markets outside the U.S., making it easier to create new projects. “I expect DeFi to have a major resurgence towards the end of this year or early next year,” Revsin told CoinDesk during a recent interview.

The crypto token tied to the Worldcoin identity-verification project was paring gains after its launch. Galaxy global head of asset management Steve Kurz shared his crypto markets analysis ahead of a key U.S. interest rate decision. The Federal Reserve opened its new instant payments service, FedNow, last week. Aaron Klein, Brookings Institution senior fellow in economic studies weighed in on what this could mean for the digital assets space. And, Gridless co-founder Erik Hersman explained how his company is extending power to rural Africa.

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