9th February 2024 > > SEC, XRP, & ETFs.

tl;dr

The SEC’s reputation is further tarnished. Kraken is soliciting XRP owners to join a class action against Ripple Labs. BTC spot ETFs are the most successful ever after one month, though they remain disappointing to me.

Market Snap

Market Wrap

I saw a post yesterday on X  stating that this rally has been driven by leveraged players.

I agree that there is more leverage than usual as measured by open interest, but the action in the perpetual futures funding rate has been from the short side until a minor short squeeze in the last few hours took us back to neutral. I know of no situation where selling a commodity leads to a price increase, all other things being equal.

Perhaps those spot BTC ETFs (see below) are materially influencing the amount of BTC for sale, which could get very interesting if this was the case.

Curious Cryptos’ Commentary – Pressure on the SEC

The Debt Box debacle threatens to engulf Gary Gensler’s leadership of the SEC.

To quickly recap, the SEC lied in court, and then tried to cover-up the mistake. It is always the cover-up that gets you in the end.

A group of senators have written a letter to Gensler that includes what might well be a significant body-blow:

"Regardless of whether commission staff deliberately misrepresented evidence or unknowingly presented false information, this case suggests other enforcement cases brought by the commission may be deserving of scrutiny. It is unconscionable that any federal agency – especially one regularly involved in highly consequential legal procedures and one that, under your leadership, has often pursued its regulatory mission through enforcement actions rather than rulemakings – could operate in such an unethical and unprofessional manner.”

Gensler has boasted about his outside earnings whilst Chair of the SEC, and the outsized nature of those earnings, so I suspect he isn’t too worried. After all, his large taxpayer funded pension isn’t going away, regardless of his performance or otherwise.

Curious Cryptos’ Commentary – XRP (Ripple)

I have never used Kraken, but I have been assured this circular is for real:

Curious Cryptos’ Commentary – Spot BTC ETFs

BlackRock and Fidelity’s spot BTC ETFs have each accumulated $3bn of assets since being launched a month ago, the two best performers of any of the 5,535 ETFs that have been launched in the last 30 years.

This represents about 0.05% of their combined AUM, way short of my expectations, triggering a payout to those who took on the CC Treasury bet a couple of months ago. USD bank details or BTC wallet address please for those on the right side of the bet.

I would hazard a guess that most of the inflows to these ETFs have been from retail. I recall reading a piece of research that 60% -70% of IFAs had not made themselves familiar with BTC or the ETFs and are therefore not including them in their personal list of products to recommend to their client base.

My impatience with the glacial pace of adoption of cryptos by TradFi grows daily.