Digital Asset Market Update – Flash Crash Explained, 3 Ethereum ETFs Approved

 

Flash Crash Explained

 

There was a giant crash in the price of Bitcoin over the last forty-eight hours. Several macro factors were contributing to that. One was a giant influx of Bitcoin being sold by Binance exchange from a crypto whale.

Another reason was a giant drop in the mining hash rate of bitcoin that led to a price crash and the expiration of futures on the market.

It was a perfect storm of events to cause a giant market crash. It’s expected during these big bull runs up, you get volatility, you get big runs down. That’s just part of investing in a fast-growing asset. And so it’s par for the course for Two Prime Digital Assets. We are happy to use options to hedge downside protection.

So we’re actually able to accumulate and make money on Bitcoin when the market crashes. Typically, there are five to seven of these drawdowns during each bull cycle, and this is the third or fourth so far. It’s a good indication of where we’re at in the current bull run.

 

Canada approves three Ethereum ETFs

 

This is huge news both for the ETH price and also structural changes, what it means for others competing in the kind of regulated products space. First of all, we saw the Bitcoin trust Bitcoin ETF approved by Canada’s TSX last month, and we saw a huge influx of Bitcoin after that, over a billion dollars in just a few days.

And I expect something similar will happen with Ethereum.

Right now, it’s the only game in town kind of for regulated products like this has been grayscale, which offers a closed-end trust with no redemption, high fees, and trades currently at a discount to the actual NAV.

I expect that this will cause an increase in the discount of the grayscale Ethereum trust and puts pressure on the S.E.C. and US regulators to start offering similar products so that market shares won’t get stolen by competing jurisdictions and regulatory regimes.