The market traded down after the SEC for bitcoin ETFs this week, including two ETFs filed by ProShares designed to track bitcoin futures contracts, two from GraniteShares, and five leveraged and inverse ETFs from Direxion. The rejection comes just weeks after the SEC rejected an ETF from that would have traded physical bitcoin. In , the SEC noted concerns about manipulation and fraud in bitcoin markets.
“Right now bitcoin is still on top,” Eapen said. “It’s changing the way we’re doing things.”
With the market slipping only slightly immediately following the news, “it feels like there is limited downside,” , co-founder and CEO of CoinFi, tells ThirtyK. “The market has priced in this negative news already.”
Ether Slides Again
Shortly after 4 p.m. EDT Friday, bitcoin was trading at $6,643.79, according to ThirtyK data provided by , up 1.8 percent from a week before. The cryptocurrency shot to more $6,800 earlier in the week, only to fall back after the ETF news. Bitcoin reached a year-high of more than $17,000 in January. Litecoin was down 3.2 percent on the week to $57.70 Friday afternoon.
Ether was hit the hardest again this week, down 8.9 percent on the week to $281.59 at market close. However, it managed to hold above its recent low of $252 at the end of the day Friday. Analysts point to continued selling of Ethereum by ICO founders. If $252 breaks, Tam said, a “very aggressive” short-term movement downward could follow. However, he expects a “sharp rebound” once startup founders finish shedding the cryptocurrency.
Bitcoin ‘Still on Top’
, chief investment officer at Arcadia Crypto Ventures in New York, takes a long-term view of the digital currencies market, telling ThirtyK that technology is here to stay, and the market will only improve. “Investors who came in from December to February are shattered, but I’m not bothered,” he said. Arcadia is currently increasing its position, he said.
“Right now bitcoin is still on top,” Eapen said. “It’s changing the way we’re doing things. On the whole, the space will grow. Our thesis is the market is going to do well in the long run.”
Eapen, for one, says the market should not rely on , adding that an ETF will only make it possible for large institutions to enter the market. “We really don’t need it,” he said. “Institutions are trying to fit crypto into the mold of things they already know.”
Leaving the Sidelines
Tam says 2017 was the year of price arbitrage, while 2018 will be known as the year marked by the advent of better data and systems to help investors make better decisions.
“This is particularly true for professional investors who, until now, may have been waiting on the sidelines,” he said. With , professional investors may start accepting the counterparty risk of unregulated exchanges, he added. “To do this, they’ll want data, data, and more data before making their move.”
Tam notes that funds have been moving away from investing in as the capital–raising markets dry up. Instead, they’re looking to invest capital into existing high-quality token projects that have taken a 90 percent to 95 percent drop in price in the current bear market.
“This presents a huge buying opportunity,” Tam said. “Pros will come in and snatch up majority positions and use that to leverage the changes they want made in that company.”