Daily News | BlackRock's Bitcoin ETF Filing Boosts Market, MakerDAO Increases DAI Rewards; Ripple and SEC Align as Stock Market Rallies

2023-06-16, 01:39

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## Crypto Daily Digest: BlackRock Files for Bitcoin ETF as Market Volatility Persists

In a surprising turn of events, BlackRock's iShares unit has filed official paperwork with the U.S. Securities and Exchange Commission (SEC) to launch a spot <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> exchange-traded fund (ETF) called the iShares Bitcoin Trust. This move by BlackRock, the world's largest asset manager with over $10 trillion in assets under management (AUM), carries significant weight and could potentially sway the SEC's previous rejections of spot bitcoin ETF proposals.

Bitcoin experienced a remarkable surge, briefly surpassing the $25,700 mark with a gain of over 1.3%, shortly after news broke of BlackRock's ETF filing. This surge came just a day after Bitcoin had dropped below $25,000 for the first time in three months, driven by concerns over U.S. central bank policies and increased regulatory scrutiny. Despite the SEC's rejection of several bitcoin ETF applications over the past year and a half, BlackRock's announcement reignited <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> within the market.

The proposed iShares Bitcoin Trust would predominantly hold bitcoin assets through Coinbase, one of the leading cryptocurrency exchanges, acting as its custodian. This strategic move by BlackRock demonstrates its commitment to embracing the growing crypto market and indicates the company's confidence in the long-term viability of digital assets.

It is worth noting that earlier reports had already hinted at BlackRock's intention to pursue a bitcoin ETF. The announcement from the asset management giant adds credibility to the notion that traditional financial institutions are increasingly acknowledging the potential of cryptocurrencies and seeking ways to participate in their growth.

The timing of BlackRock's ETF filing is particularly intriguing, given the ongoing volatility in the crypto market. Following comments by U.S. Federal Reserve Chairman Jerome Powell, both Bitcoin and Ether experienced a decline. Concerns about inflation and interest rate hikes contributed to the sell-off, pushing both cryptocurrencies into oversold territory. The Relative Strength Index (RSI) for ETH and BTC fell to 29 and 35, respectively, indicating oversold conditions.

While traditional markets saw gains based on positive economic indicators, the crypto market grappled with regulatory uncertainties. The SEC's active monitoring of the industry, exemplified by recent lawsuits against major exchanges like Coinbase and Binance, further added to the instability.

Moreover, the decline in trading activity across the crypto market during the second quarter of 2023 raised concerns. Average daily trading volumes for the top 10 tokens dropped from $18 billion in the first quarter to $10 billion. Increased regulatory scrutiny, as highlighted by the SEC's legal actions against major exchanges, likely contributed to this decline.

In the midst of this market turmoil, MakerDAO, a decentralized finance (DeFi) platform and stablecoin issuer, made strategic decisions to incentivize investors. MakerDAO approved an increase in the reward for holding its DAI stablecoin, raising the DAI Savings Rate (DSR) to 3.49%. By attracting investors with higher rewards, MakerDAO aims to establish DAI as a preferred stablecoin over competitors like USDC and USDT.

Regarding regulatory matters, Ripple Labs and the SEC are in agreement that past remarks by a former SEC official should not dictate current policy. The SEC clarifies that these remarks do not hold the weight of formal rules or guidance. The SEC now follows remarks from SEC Chair Gary Gensler, suggesting that certain tokens, including Ether, may be considered securities. However, the legal significance of the past remarks will only arise if the SEC's commissioners issue new rules or guidance explicitly classifying Ether as a security.

## Bitcoin (BTC) $25,449 (-0.56%) - Neutral Outlook

![](https://gimg2.gateimg.com/image/article/1686879500Untitled0616 1.png)

![](https://gimg2.gateimg.com/image/article/1686879516Untitled0616 2.png)

Although there was a temporary rebound in BTC's value yesterday, we have not completely overcome the challenges ahead. The prevailing negative sentiment persists due to unclear regulations and a scarcity of fresh investments entering the cryptocurrency market. Presently, BTC's price is fluctuating just above the weekly demand zone, spanning from 25240 to 24270. This range could potentially serve as a prolonged accumulation zone, but its ultimate outcome remains uncertain at this time.

**Overview:**

- ***Closest daily support zone: 25240 - 24822***
- ***Closest daily resistance zone: 25818 - 26285***
- ***Key Level: 24270 (Weekly Demand Level)***

<br> **Daily Resistance zones**

1. 25818 - 26285
2. 26700 - 27150
3. 27790 - 28020

<br> **Daily Support zones**

1. 25240 - 24822
2. 24270 - 23855
3. 23470 - 23340

## Macro: Fed's Expected Early Exit and AI Frenzy Propel Stocks to New Highs

The US stock market rally driven by the exuberance surrounding artificial intelligence is expanding its reach beyond the confines of the technology industry, raising concerns about the possibility of an overbought market. The S&P 500 index surged to new heights, fueled by expectations that the Federal Reserve may end its tightening cycle earlier than anticipated in order to ward off a potential recession. This bullish sentiment has not only impacted tech stocks but has also lifted other sectors, leading to gains across major indices.

The impressive rally has caught the attention of investors, who now face a significant test as a massive number of options contracts tied to stocks and indexes are set to expire. Known as OpEx, this event typically prompts traders to either roll over existing positions or establish new ones, often resulting in portfolio adjustments that can lead to increased volatility and sudden price swings.

While the stock market continues to display strength, some analysts caution that certain areas, such as the Nasdaq 100 index and the S&P 500, appear overbought and extended in the short term. Historical data suggests that such overbought conditions cannot be sustained indefinitely. These analysts believe that a pullback in the market is probable, particularly as we move beyond the month of June.

In addition to these concerns, the market is facing the potential impact of significant rebalancing by large money managers, who are expected to sell up to $150 billion worth of stocks. This rebalancing could potentially lead to a 5% decline in global stock prices, according to estimates by JPMorgan strategists.

While stocks continue to attract attention, the bond market saw a surge as well, with yields on 10-year Treasuries declining. The dollar also experienced a slump, while the euro rallied following an interest rate hike by the European Central Bank. The US Federal Reserve, on the other hand, paused its series of interest rate hikes but maintained a hawkish stance, projecting higher borrowing costs in light of persistent inflation and labor-market strength.

<div class="blog-details-info">
<div>Author:** Peter L. **, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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