Ether funds registered $87 million in net inflows to break a five-week losing streak while bitcoin products added $1 billion.

Digital asset funds saw inflows of $1.2 billion last week, the largest total since the week ended July 19, according to crypto asset manager CoinShares.

The additions marked the third consecutive week of inflows and were attributed to expectations of further interest-rate cuts in the U.S., CoinShares wrote in its weekly report on Monday. U.S.-based funds accounted for $1.17 billion of the $1.2 billion of inflows.

The U.S. bitcoin exchange-traded fund (ETF) sector received a boost recently with the Securities and Exchange Commission’s (SEC) approval of physically settled options tied to BlackRock’s ETF (IBIT), the largest of the spot BTC funds in the U.S. by assets.

“The approval of options for certain US-based investment products likely boosted sentiment, although trading volumes have not seen a commensurate rise, in fact, they declined slightly by 3.1% week-on-week,” CoinShares wrote.

Bitcoin funds saw over $1 billion of inflows. Ether products added $87 million to break a five-week losing streak and net “the first measurable inflows since early-August,” according to the report.

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The SEC faces a Thursday deadline for at least one of the spot ether ETF applications it’s reviewing.

WASHINGTON, D.C. — U.S. Securities and Exchange Commission Chair Gary Gensler declined on Thursday to preview his agency’s decision on ether (ETH) exchange traded funds (ETFs), though he advised observers to “stay tuned.”

Though he’d reiterated that the court decision on ETFs had caused his agency to “pivot” in its thinking, when asked by CoinDesk on Thursday about what the agency is preparing to do in response to the specific applications on this much-anticipated crypto decision, he largely demurred.

“I don’t have anything on this particular filing,” Gensler said outside an Investment Company Institute event in Washington.

“We do it within the law and how the courts interpret the law, and that’s what I’m deeply committed to,” he said, after having noted on stage at the event that the agency had responded to the D.C. Circuit Court of Appeals decision rejecting the SEC’s approach toward spot bitcoin (BTC) ETFs earlier this year.

The SEC, after weeks of limited engagement, asked exchanges supporting spot ether ETF applications to refile their 19b-4 forms with universal language earlier this week. Those forms were submitted to the SEC by Tuesday, and the exchanges began publishing them online that night. The SEC also appears to have begun engaging with the would-be issuers themselves, as companies like Fidelity and Grayscale filed updated S-1 forms this week. The SEC has to make a final decision on at least one spot ether ETF application by the end of the day Thursday.

Based on these forms, it appears the SEC is uncomfortable with the idea that ether ETF issuers might stake any assets.

Industry participants previously told CoinDesk that while the SEC’s moves this week don’t guarantee approval of the ETFs, they make it more likely that the ETFs will be approved.

“[The] DC Circuit took a different view, and we took that into consideration and pivoted,” Gensler said on Thursday.

Gensler also reiterated Thursday that his agency would keep working on its opposition to the crypto bill that passed the House of Representatives on Wednesday.

“We’ll continue to engage,” he said. “It’s just a field where the token operators – without prejudging any one of them – aren’t making the disclosures that investors really could benefit from and are required by law.”

“We’ve seen leaders in this field find themselves on a pathway to jail or extradition,” he added.

And when asked about Congress seeking to reverse his agency’s crypto accounting policy, Staff Accounting Bulletin No. 121 (SAB 121), he argued that the agency meant it as guidance at a time when failing crypto firms were having to treat customer assets the same as their own in bankruptcy.

“The crypto that these companies have said they took as custody actually because part of the bankruptcy estate,” Gensler said. “That’s what we were addressing back in 2022,” he added, saying it was “just” an accounting bulletin.

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The crypto industry is expected to transition into a formal, regulated asset management industry with more than $500 billion of assets over the next five years, the report said.

The crypto fund management business could be worth as much as $50 billion in terms of revenue, as the expected launch of spot-based bitcoin exchange-traded funds (ETFs) in the U.S. is likely to bring more capital to the market, broker Bernstein said in a research report Monday.

That’s equivalent to about 4% of the present size of the crypto market, the report said. At press time, the total crypto market capitalization was $1.08 trillion.

The crypto industry is expected to transition from a “cottage industry” with $50 billion of managed assets to a “formal, regulated asset management industry with $500-650 billion of assets over the next five years,” analysts led by Gautam Chhugani wrote.

The research comes months after the likes of BlackRock filed for a spot-based ETF with the U.S. Securities and Exchange Commission (SEC). Early this month, the regulator delayed making a decision on all of the spot ETF applications until October. The crypto market is hopeful that an eventual launch of spot-based ETFs will unlock the floodgates to mainstream money.

Bernstein expects demand to be driven by “investment advisors, wealth and private banking integrated products and easier access to ETFs in direct broker accounts.”

That would imply a 10% ETF share for bitcoin (BTC) and ether (ETH) market cap and a 5-6% share for crypto hedge funds, the note said.

“Crypto financial adoption follows hype cycles, and we expect a hockey stick adoption, with 2024 as the landmark regulatory year for approval of ETFs,” the report added.

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The purchase takes the ARK Innovation ETF’s holding to 5.7 million COIN shares and marks its first investment in the crypto exchange in a month.

Cathie Wood’s Ark Investment Management said in an e-mail it bought 78,982 shares in cryptocurrency exchange Coinbase (COIN), its first investment in the crypto exchange in a month.

At Friday’s closing price of $40.24 , the purchase would have cost about $3 million. The stock has been in a funk in recent months, and is down almost 60% from $98 in early August.

The purchase takes the ARK Innovation ETF’s (ARKK) holding to 5.7 million COIN shares. That puts the purchase on the small side – increasing the ETF’s exposure by 1.4%. It suggests the investment firm still sees bullish signs for the crypto sector, though may be opting for a cautious approach while the dust settles on a rocky period.

Coinbase CEO Brian Armstrong said last week the company’s revenue this year would be at least 50% less than it was last year owing to the steep price drops in cryptocurrency prices and knock-on effects across the sector from multiple bankruptcies of large firms, such as rival exchange FTX.

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Many crypto exchange-traded funds started during the last bull market and enjoyed an initial boom before crashing months later when valuations tanked.

Cryptocurrency exchange-traded funds (ETFs) account for five for the worst seven debuts in ETF history, according to Morningstar Direct data, the Financial Times reported on Friday.

The five funds were all linked to the performance of crypto or blockchain. The worst performer was France-based Melanion BTC Equities Universe fund, which invests in companies such as bitcoin miners Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT). The fund, which launched October 2021, has seen its value slide 76.9% in the past 12 months.

Many ETFs started during the heady days of the last crypto bull market, enjoying an initial boom at the end of 2021 before crashing as valuations tanked this year.

Morningstar’s data however suggests that a poor first year does not condemn ETFs in the long-term. The SPDR Portfolio S&P 500 Growth ETF (SPYG), a non-crypto fund that tracks the S&P 500 Growth Total Return Index, fell by 52.8% in 2000-01. It has since recovered and is now a $12.2 billion fund, the FT said.

“The people that I speak to who invest in bitcoin are still reliably bullish because the potential use cases haven’t changed,” said Kenneth Lamont, a senior fund analyst at Morningstar. “A lot of those involved in the industry have just regathered themselves for the next bull run.”

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The application comes about eight months after the SEC rejected the investment firm’s last application.

Investment giant VanEck has filed a new application for a spot bitcoin ETF with the Securities and Exchange Commission (SEC).

VanEck’s filing for its VanEck Bitcoin Trust comes just eight months after the SEC rejected its previous application and just a day after it denied the spot bitcoin ETF applications of Grayscale Investments and Bitwise. Grayscale Investments is a subsidiary of CoinDesk parent Digital Currency Group.

The SEC has repeatedly cited concerns about applicants’ ability to prevent market manipulation and protect investors, although the agency has approved multiple bitcoin futures ETFs.

“Spot commodities and currency markets for which it has previously approved spot ETPs are generally unregulated and that the Commission relied on underlying futures market as the regulated market of significant size that formed the basis for approving the series of Currency and Commodity-Based Trust Shares, including gold, silver, platinum, palladium, copper, and other commodities and currencies,” VanEck noted in its filing.

A spot bitcoin ETF is comprised of bitcoin or assets related to bitcoin’s price. Proponents of a spot bitcoin ETF approval have argued the product would offer a low-cost and easily accessible way for individuals and institutions to invest in bitcoin.

Grayscale Investments filed suit against the U.S. Securities and Exchange Commission (SEC) barely an hour after its rejection, asking the U.S. Court of Appeals for the District of Columbia Circuit to review the SEC’s order.

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The SEC rejected Grayscale’s application to convert its Grayscale Bitcoin Trust to an exchange-traded fund earlier Wednesday.

Grayscale Investments has sued the U.S. Securities and Exchange Commission (SEC) barely an hour after the regulatory agency rejected its application to convert its flagship Grayscale Bitcoin Trust product to an exchange-traded fund (ETF).

The SEC rejected Grayscale’s application earlier Wednesday, citing concerns about market manipulation, the role of Tether in the broader bitcoin ecosystem and the lack of a surveillance-sharing agreement between a “regulated market of significant size” and a regulated exchange, echoing concerns the regulator has expressed for years in rejecting other spot bitcoin ETF applications.

In the filing, Grayscale simply asks the U.S. Court of Appeals for the District of Columbia Circuit to review the SEC’s order.The investment firm announced it was prepared to sue the SEC in the event of a rejection earlier in 2022, saying it would file a proceeding tied to the Administrative Procedures Act. To that end, Grayscale tapped former Solicitor General Don Verrilli, who has experience in APA proceedings.

“Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation – and we are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market,” Grayscale CEO Michael Sonnenshein said in a statement Wednesday.

Essentially, the company will argue that the SEC has to allow products that are like other products already trading, in this case bitcoin futures ETFs.

Verrilli told reporters earlier in June that the SEC’s approval of futures ETFs indicate the underlying market must be seen as reliable.

“This is a place where common sense has a really important role to play. You’ve got a situation now in which you have certain kinds of exchange traded funds, one that is focused on bitcoin futures, and the SEC has approved that, the SEC is given it the seal of approval,” he said. “In order to do so it had to make a determination that that giving this approval was consistent with the securities laws, and in particular, that that there wasn’t a sufficient underlying risk of fraud and manipulation.”

To date, only a handful of bitcoin futures ETFs have been approved to trade. Spot bitcoin ETFs trade based on the price of bitcoin itself, while futures-based ETFs trade based on the price of CME’s bitcoin futures product (which in turn is tied to an index). Bitcoin ETF proponents argue that the futures markets are still based on the underlying spot bitcoin price, while the SEC notes that CME’s futures market is regulated by the Commodity Futures Trading Commission (CFTC), a fellow federal agency.

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The Grayscale Future of Finance exchange-traded fund will list on the London Stock Exchange, Deutsche Börse and Borsa Italiana.

Grayscale Investments plans to list its first exchange-traded fund (ETF) in Europe, offering investors exposure to companies in finance, technology and digital assets.

The Grayscale Future of Finance UCITS ETF (GFOF) will list on the London Stock Exchange (LSE), the Deutsche Börse and Borsa Italiana and will be available to investors across Europe. Trading in the ETF is set to start tomorrow, a company representative said.

The ETF will track the Bloomberg Grayscale Future of Finance Index, which was launched in January to track the performance of financial services and technology companies in the digital economy. They include PayPal (PYPL), Coinbase Global (COIN), Block (SQ), Robinhood Markets (HOOD) and Argo Blockchain (ARB).

CEO Michael Sonnenshein said in April that the digital asset manager wanted to enter the European crypto fund market, where there are already over 70 exchange-traded products with a total of $7 billion in crypto and related assets. The new company-focused ETF will join incumbents such as the VanEck Vectors Digital Assets Equity ETF and Melanion Capital’s BTC Equities Universe ETF.

A similar ETF, which has been listed in the U.S. since February on the NYSE Arca, was designed to broaden Grayscale’s offering away from direct investment in digital assets, offering investors exposure to companies whose performance is indirectly linked to the crypto market.

Grayscale is currently seeking to convert its Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF in the U.S. Markets regulator the Securities and Exchange Commission (SEC) has yet to approve such a product despite having received dozens of applications in recent years.

Grayscale is a subsidiary of Digital Currency Group, which is also the parent company of CoinDesk.

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Investors opted for a cautious approach during intense volatility on the opening day of three crypto funds.

Three crypto exchange-traded funds (ETFs) opened up to investors in Australia on Thursday, with a slow start being attributed to an 18-month low for bitcoin (BTC).

The Cosmos Asset Management ETF, which invests in bitcoin through the Canadian Purpose Bitcoin ETF, saw $250,000 in trading volume across the first hour before hitting $400,000 by 1 p.m. in Sydney.

The ETFS 21Shares Bitcoin ETF experienced similar volumes, while the ETFS 21Shares Ethereum ETF had around $150,000 in the first hour of trading.

The volumes were well below the expected $1 billion inflow of capital into these ETF’s, according to a report by AFR. Bitcoin dropped to levels not seen since 2020 on Thursday, and the total crypto market cap lost 16% overnight.

ETF Securities head of distribution Kanish Chugh said that trading had been “relatively muted.”

“The extreme volatility in crypto has caused some investors interested in crypto to sit on the sidelines and wait for calm. This is a challenging market for a crypto ETF launch,” Chugh added.

In a bid to incentivize volume and appeal to market makers, Cosmos waived fees for the first two months.

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Teucrium’s approval may hint at a future spot bitcoin ETF approval.

The U.S. Securities and Exchange Commission has allowed NYSE Arca and Teucrium to issue a bitcoin futures exchange-traded fund.

The SEC announced the approval Wednesday in a filing on its website, adding Teucrium to a host of other bitcoin futures ETF issuers.

Notably, Teucrium and NYSE Arca filed the application under the Securities Exchange Act of 1934, filing a 19b-4 form with the SEC. The already-approved bitcoin futures ETFs filed by other companies were under the Investment Company Act of 1940, which follows a slightly different regulatory pathway to approval.

An approval under the Securities Act of 1933, under which Teucrium’s filing falls, may potentially open the door for a spot bitcoin ETF, Bloomberg analyst James Seyffart said on Twitter earlier this year. Proponents of crypto ETFs have argued that “like situations must be treated alike,” he said, citing an argument from crypto company Grayscale, which filed to convert its Grayscale Bitcoin Fund (GBTC) to an ETF. (Grayscale is a subsidiary of CoinDesk parent company Digital Currency Group).

The SEC has, to date, disapproved all spot bitcoin ETF applications, citing concerns about market manipulation and a lack of a surveillance-sharing agreement between an ETF issuer and a sizable market that trades the underlying asset. That has not stopped various companies from trying to bring a bitcoin ETF to market.

ProShares, Valkyrie and VanEck are among those approved to list and trade bitcoin futures ETFs in the U.S. so far.

Valkyrie has also filed to launch a 33 Act bitcoin futures ETF. Its application is outstanding.

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