First Mover: America’s Crypto ETPs Gained $2.2 Billion of Investment in 2023

Investors poured over $2 billion into digital-asset investment exchange-traded products (ETPs) in 2023, making it the third-largest year for net inflows dating back to 2017, according to data provided by CoinShares. This surge in investment represents more than double the inflows seen in 2022. CoinShares’ James Butterfill noted that most of the money entered the market in the final quarter of 2023, as it became “increasingly clear that the SEC was warming up to the launch of bitcoin spot-based ETFs in the United States.” The final week of 2023 alone saw $243 million of net inflows into digital asset ETPs.

In other news, Ether (ETH) prices may experience a boost in the coming weeks. Crypto lender Celsius, which is currently undergoing bankruptcy proceedings, announced that it will unstake its holdings of the second-largest cryptocurrency. This move removes a factor that may have contributed to the token’s underperformance in recent months. Celsius, which is transitioning to become a bitcoin miner, had previously included staking in its activities. The company has been selling staking rewards on the open market to cover costs associated with its reorganization plan. The decision to unstake its ETH holdings will unlock the cryptocurrency and ensure timely distributions to creditors.

Meanwhile, Celestia’s TIA token has gained over 22% in the past 24 hours, defying the muted broader market trend. Investor interest in staking the token has gained momentum alongside rising hype for the blockchain’s underlying technology. TIA traded at just under $17 in the early Asian morning hours on Friday before experiencing a slight pullback. Data from CoinGecko shows that it recorded nearly $800 million in trading volume in the past 24 hours, its highest to date. Staking involves locking coins in a cryptocurrency network in return for rewards. Staking TIA on native platforms yields between 15% to 17% annually, minus fees, making it an attractive option for investors. The high yield compared to the risk-free rate offered by the U.S. 10-year Treasury note seems to be drawing demand for the cryptocurrency. As of Friday, the market capitalization of TIA is just under $2 billion, indicating the potential for participants to make money from both the inflated value of rewards and the initial staked capital as valuations likely grow further in a bull market.

In terms of market analysis, a chart depicting bitcoin’s 1% market depth shows that while the cryptocurrency rallied 60% in the final three months of 2023, the 1% market depth failed to recover from the dip caused by Alameda’s demise in late 2022. The market depth, which measures order book liquidity, indicates how easy it is for traders to trade large quantities at stable prices. Analysts speculate that the situation may improve following the anticipated launch of spot ETFs.

In other news, the fees associated with Bitcoin ETFs are expected to play a critical role in their popularity. As the race for Bitcoin ETFs heats up, the fees charged by these investment vehicles will be a key factor in attracting investors. Lower fees may entice more participants to enter the market and invest in Bitcoin ETFs.

Additionally, the Australian Treasury plans to question regulators about the HyperVerse crypto scheme. The scheme has raised concerns, and the Treasury aims to gather more information to assess its potential risks and implications.

Lastly, India’s digital rupee achieved a significant milestone, with over a million transactions processed in a single day. This achievement was made possible with the support of banks, highlighting the growing adoption and acceptance of digital currencies in the country.

Overall, the crypto market experienced significant developments and milestones in 2023, with increased investment in digital-asset ETPs, potential price gains for Ether, the rise of Celestia’s TIA token, and ongoing discussions surrounding Bitcoin ETFs and regulatory concerns. These events indicate the continued growth and maturation of the cryptocurrency industry.