Blackrock's Bitcoin ETF filed with the SEC, will this bring the next bull market?

The SEC values these agreements, despite available public data from trading platforms. BlackRock's move comes after several other companies' failed attempts to launch ETFs.

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The application is seen positively in the crypto community, as approval could increase Bitcoin's credibility and bring in more investors. BlackRock's status as the world's biggest asset manager might also boost confidence in the application. However, the outcome is uncertain, as even large, influential crypto funds like the Grayscale Bitcoin Trust, which is similar to an ETF, face significant market and regulatory challenges. Therefore, while promising, BlackRock's application is still one step in the challenging journey to gain widespread acceptance of Bitcoin ETFs.

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Grayscale discount to premium

A discount to premium chart shows the difference between an asset's market price and its Net Asset Value (NAV). For example, the Grayscale Bitcoin Trust (GBTC) is currently showing a 36% discount, which means the market price of its shares is 36% lower than the value of the Bitcoin it owns. In other words, investors are buying shares for 36% less than the real value of the Bitcoin in the trust. This discount can happen due to various reasons, like market feelings, worries about liquidity, or regulatory hurdles.

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BTC Dominance

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Bitcoin's portion of the total cryptocurrency market, known as Bitcoin dominance, recently passed 50%, meaning Bitcoin represents half of the $1.1 trillion cryptocurrency market. Bitcoin's dominance has grown by over 10.5% since November 2022, mainly because investors are using it as a safe haven due to the FTX crisis and increased regulation in the US.

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Ether's market dominance has been stable around 20% for the past year, meaning Bitcoin and Ether together make up about 70% of the total crypto market value. Michael Saylor, co-founder of MicroStrategy and a Bitcoin enthusiast, expects Bitcoin's dominance to exceed 80% in the next few years due to regulatory pressure on other cryptocurrencies. He believes the large number of cryptocurrencies trying to compete with Bitcoin is causing confusion and limiting institutional investment.

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It's important to note that an increase in Bitcoin's dominance doesn't necessarily mean its price is increasing. Bitcoin dominance simply measures how much of the total cryptocurrency market Bitcoin represents. If other cryptocurrencies are losing value faster than Bitcoin, Bitcoin's dominance can rise even while its price falls. So, Bitcoin can lose value but still grow in market dominance, suggesting it's either more stable or losing value slower than other cryptocurrencies.

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Currently, Bitcoin is valued at around $30,000, up by 1.5% in the last 24 hours and 15% in the past week. The recent application from Blackrock for a Bitcoin spot ETF is thought to have boosted Bitcoin's price.

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CPI

The U.S. Labor Department reported a slight decrease in inflation in March, partly due to the Federal Reserve's increases in interest rates. The consumer price index (CPI), which measures the cost of goods and services, only rose by 0.1% in March, less than the expected 0.2%, and 5% from the previous year. When excluding food and energy, the core CPI increased by 0.4% and 5.6% annually. Lower energy costs and a stable food index helped reduce inflation. The increase in CPI is the smallest yearly increase since June 2021. After the report, the stock market futures rose and Treasury yields fell. Used vehicle prices, which greatly impacted inflation in 2021, dropped another 0.9% in March and are now 11.2% lower than last year. Over the past year, the Federal Reserve has increased its key interest rate nine times, marking the quickest pace of monetary tightening since the early 1980s.

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