Crypto Market Tanks Following Approval of Bitcoin-Ethereum Combo ETFs

The broader crypto market saw a sharp decline on December 20, resulting in a significant 7% drop in its total market cap.

Interestingly, this comes following the approval of a Bitcoin-Ethereum ETF combo by the United States SEC. The decline comes as a shock to investors who had hoped for a different result since the said approval is a positive achievement for the crypto industry.

Over the last 24 hours, the flagship cryptocurrency, Bitcoin, recorded a 6.85% decline, dropping below $100k for the first time in two weeks to trade at $94,968.

However, there was an increase in trading activities within the same time, a jump of 27% to $122 billion, with a live market cap of $1.88 trillion.

Ethereum, on the other hand, witnessed more decline, crashing by over 10% in one day to change hands at $3,286. While the general market sentiment still reflects bullish, investors are beginning to worry about sustenance as the year ends.

U.S. SEC Greenlights Bitcoin-Ethereum ETF

According to a December 19 announcement by the SEC, Hashdex and Franklin Templeton can now last their spot BTC-ETH exchange-traded fund products (Hashdex’s Nasdaq Crypto Index US ETF, and Franklin Crypto Index ETF) on the Nasdaq stock market and Cboe BZX Exchange.

Eric Balchunas, a senior ETF analyst at Bloomberg, noted that the ETFs will likely debut in January 2025. The ETFs would be updated by tracking the spot prices of Bitcoin(BTC), and Ethereum (ETH).

https://twitter.com/EricBalchunas/status/1869902611568025678

Hashdex and Frankie get the first-mover advantage since they are the first to introduce the product in the market. The ETFs share similarities with other BTC and ETH ETFs that were approved earlier this year.

According to the SEC, the proposals fulfilled the Exchange Act criteria which involve submitting disclosure documents that are updated regularly, and the requirement to have enough robust rules to prevent fraudulent and manipulative activities.

Other Top Issuers to Follow?

Nate Geraci, the president of the ETF Store and co-founder of ETF Institute, noted the possibility of other top ETF issuers following the same step as Hashdex and Frank Templeton.

He remarked “Will be interesting to see if BlackRock or others attempt to piggyback on this & launch similar ETFs…”

He also pointed out that these products are expected to see increasing demand in the future. Meanwhile, the crypto ETF market saw a substantial outflow over the last day.

According to Soso Value data, BTC ETF saw a daily net outflow of $680 million as of December 19, with Fidelity FBTC recording the most outflow of $208 million.

Spot Ethereum ETF bled out $60.47 million with Grayscale NYSE posting the largest outflow of $58.13 million.