I(BIT) 100K Bitcoin, ETH ETF Chase, and Citibank's Avalanche Venture

• BlackRock’s bitcoin ETF surpasses 100K BTC under management
• Citibank tests tokenization of private equity funds on Avalanche
• Ripple announces acquisition of Standard Custody & Trust Company

BlackRock's IBIT takes a leap, Franklin Templeton dives into ether ETF arena

For the third consecutive week, the crypto markets showed steady upward momentum with the total market capitalization of the crypto universe posting a solid weekly gain of 14%, hovering around the $2 trillion mark. Bitcoin dominance within the crypto space also inched higher, surpassing 52%. Among the blue-chip names, bitcoin saw a strong rally of 16.9% while ether recorded a notable advance of 14.6% compared to the previous week.

US-listed spot bitcoin exchange-traded funds saw persistent daily net inflows, contrasting with the previous week's waning trend in both net inflows and GBTC outflows. While GBTC outflows remained soft this week, net inflows into other ETFs surged significantly compared to the prior week, resulting in record weekly inflows. As of the end of February 14th (in the US), this ETF universe had accumulated a total of $4.11 billion in net inflows since their debut last month. Leading the charge is BlackRock's spot bitcoin ETF, iShares Bitcoin Trust (IBIT), which crossed the 100,000 BTC mark in assets under management earlier this week.

Investment manager Franklin Templeton initiated the process for launching a spot ether ETF on Monday, joining the ranks of other asset managers seeking approval from the Securities and Exchange Commission (SEC). The firm filed an S-1 registration statement for the “Franklin Ethereum ETF” which is poised to reflect the price of ether. The custody of ether and cash holdings will be managed by Coinbase Custody Trust Company and the Bank of New York Mellon respectively. According to the filing, the shares will be listed and traded on the Cboe BZX Exchange, Inc.

Franklin Templeton's filing on Monday also incorporates staking. Similarly, Ark and 21Shares submitted an amended registration statement last week for their potential spot ether ETF which includes a potential new staking component. According to The Block's report, open interest in ether options on the Chicago Mercantile Exchange (CME) for February has already surpassed January's figures, appearing poised for a new all-time high. Drawing from the precedent set by bitcoin ETFs, traders seem to be strategically positioning themselves in anticipation of similar price dynamics in ether.

Citibank's Avalanche venture, Lido-Taurus staking sync, and Ripple's custodial quest

Among the L1s, AVAX notably surged with a weekly gain of 19.8%. On Wednesday, Citibank made headlines by revealing its utilization of Avalanche for exploring the tokenization of private funds. Collaborating with industry leaders WisdomTree and Wellington Management, Citibank conducted a proof-of-concept trial on Avalanche's Spruce, an Evergreen subnet tailored for large financial institutions leveraging public blockchain infrastructure. This move by Citibank underscores Wall Street's increasing interest in blockchain adoption and its exploration of blockchain's potential applications. Notably, TradFi firms like T. Rowe Price, WisdomTree, Wellington Management, and Cumberland already joined the subnet in April last year to enhance trade execution and settlements. Citibank's recent trial involved end-to-end token transfers, secondary transfers facilitating trading, and the validation of new capabilities through collateralized lending. The bank's proof-of-concept illustrated the potential for smart contracts to automate processes and enhance compliance and controls for investors and issuers, according to the press release.

In the Liquid Staking Derivatives (LSD) arena, Lido Protocol DAO (LDO) experienced a notable surge of 13.6% week on week. Adding to the momentum, Swiss-based crypto custodian Taurus announced a strategic partnership with Lido Protocol. As a staking solution platform, Lido enables users to enjoy staking benefits without fully locking their tokens. Through this partnership, Taurus plans to integrate Lido into its custody solution, providing custody and staking support for staked Ethereum (stETH). According to a CoinDesk report, Lido's liquid staking product is available to Swiss-based, FINMA-regulated banks partnered with Taurus. This involves locking up ether on the blockchain and receiving a digital record in the form of another token (stETH) which can then be utilized for trading elsewhere.

On Tuesday, Ripple announced its acquisition of Standard Custody and Trust Company, a New York-based digital asset platform specializing in custody, escrow, and settlement services for institutional clients. Through this acquisition, Ripple gains access to Standard Custody's limited purpose trust charter and money transmitter licenses, bolstering its regulatory portfolio. Ripple and its subsidiaries already hold various regulatory licenses, including a New York BitLicense, nearly 40 money transmitter licenses across the US, a Major Payment Institution License from the Monetary Authority of Singapore, and a Virtual Asset Service Provider registration with the Central Bank of Ireland. This acquisition follows Ripple's previous acquisition of Metaco, a custody solution widely favored by banks globally. Ripple has also recently announced custody partnerships with leading banks such as HSBC, BBVA, and Zodia Custody, alongside the expansion of its Ripple Payments offering into new territories like Africa. With a focus on strengthening its core businesses in payments and custody, Ripple now offers live commercial custody services in 20 regulatory jurisdictions and facilitates payments to 70 countries worldwide.

Macro pulse 

Among TradFi assets, US equities remained largely unchanged, registering only marginal gains of 0.1% compared to the previous week as markets grappled with the repercussions of a CPI print exceeding expectations, particularly concerning its impact on interest rates. Meanwhile, Oil futures rose by 3.4% over the week, driven by ongoing geopolitical tensions in the Middle East and Eastern Europe. Additionally, the US Dollar index saw an uptick of 0.6% and 10-year US Treasury yields rose by 15 basis points, while the Gold & Silver index experienced a decline of 6.7% week on week.

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*Note: Weekly (7 calendar day) performance figures are as of 8am SGT on February 15, 2024 

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