First Mover Asia: Bitcoin Hovers Near $30.3K After Expected Correction. Retail Investor Enthusiasm ‘Likely to Increase’: Analyst

Good morning. Here’s what’s happening:

Prices: Positive events spurred a crypto market boost and altcoin rally, although the subsequent corrections were to be expected, a crypto fund manager said. BTC is holding comfortably above $30K.

Insights: The robust influx into Toronto’s Purpose Bitcoin ETF indicates a high retail demand for such products, signaling promise for U.S. companies with pending BTC applications with the SEC.

Bitcoin Holds Steady Above $30K

As Asia begins its business week, bitcoin is maintaining its position above $30,000, though ether has dipped below the $2,000 mark.

Last week’s unexpected rally in crypto prices came from a favorable ruling a court handed down in the Ripple-SEC case, but Joe DiPasquale, CEO of crypto fund manager BitBull Capital, said in a note that after the market overheated and “corrections are to be expected”.

DiPasquale wrote that if there is a correction, “we are unlikely to see Bitcoin trading below $27K for long” and the “market is likely to consolidate around the current zone for now.”

The question is, where does the market go from here? Last week was already a busy week with the scheduled economic data releases, and became even more so with market movement from the XRP-led altcoin rally.

“Looking ahead, with no major scheduled events or economic data releases this week, we anticipate that price action in the market will be influenced by open interest levels, reflecting trader sentiment, and trending topics such as memes and artificial intelligence,” Johnny Teng, Senior Researcher at LBank Labs, said in a note. “As retail traders may have missed out on last week’s price movement, their enthusiasm to participate in the market is likely to increase.”

Currently, despite fewer short positions, Bitcoin’s price is expected to dip and then rise due to nearby short-term liquidity and resistance, Teng explained, while ether and other altcoins’ trading volumes are set to increase.

Data from Coinglass shows that the number of short positions are climbing steadily in the early hours of Asia’s Monday business day, with $21 million in long positions liquidated in the last 12 hours versus $8.21 million in short positions.

This could be part of a consolidation move to maintain bitcoin at the $30,000 mark, instead of allowing it to breakaway and move upwards.

What Do Rising Flows Into Purpose’s Spot Bitcoin ETF Mean?

If – or when – the SEC finally approves a spot bitcoin ETF it won’t be the world’s first, however. That honor goes to Ontario, Canada, where Purpose Investments holds the title of having the world’s first bitcoin ETF, being approved by the Ontario Securities Commission in 2021.

Glassnode flow data shows that investors continue to pile into Purpose’s bitcoin ETF, BTCC, with a next 5638 BTC moving in the ETF in June and July. This growth has not only given Purpose a head-start on potential competition, but more importantly, strongly suggests a voracious appetite among average investors for a spot ETF bitcoin product.

Data from Factset shows that BTCC, the largest of Ontario’s bitcoin ETFs, is almost entirely held by retail traders, with only 0.03% institutional ownership – one single firm called Yorkville Asset Management.

With these two data points, it’s safe to say that retail enthusiasm for bitcoin as an ETF-grade asset is vibrant. Being a first mover has a significant advantage.

Almost all Canadian brokerages have access to U.S. listed stocks, while U.S. availability of Canadian stocks is limited. Or, one can put it like this: Canadians could easily ditch Toronto-listed BTCC and buy U.S. spot bitcoin ETFs, but American retail traders aren’t really buying up north.

Which is why this continued fund flow is interesting. It demonstrates that there’s a huge advantage for being first in this market, as the customer base isn’t likely going to be moving to the competition. Rather, they are buying more.

Within the market for bitcoin futures ETFs, “the difference between the first market and the second market was a couple of days, and the first-place product has about a billion dollars in assets, while the second place has less than 100 million,” she said.

Nobody expects a Toronto-listed ETF to have larger assets under management than a U.S. counterpart. But with $852.5 million USD ($1.1 billion CAD) in AUM, Purpose’s BTCC is no slouch, and it’s still growing.

Yet Purpose’s first-mover advantage is hardly likely to be winner-take-all.

XRP’s price has skyrocketed, after a U.S. judge ruled the sale of XRP tokens on exchanges did not constitute investment contracts. Willkie Farr & Gallagher LLP Counsel Michael Selig and attorney Alex Damsker shared their respective legal opinions on Ripple’s partial victory in its fight with the U.S. Securities and Exchange Commission (SEC). CoinRoutes CEO and co-founder Dave Weisberger discussed his crypto markets analysis. And, Arkham founder and CEO Miguel Morel addresses concerns from privacy-focused crypto advocates after announcing a new crypto data marketplace.

Crypto Distress Prompts Fir Tree, a Hedge Fund, to Seek Profit From Turmoil: “Fir Tree is at its best when we identify opportunities that are mispriced, dislocated or complex. Rarely do we encounter situations that are all three, but that is precisely what we are seeing in digital assets right now,” Fir Tree said.

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