First Mover Americas: Bitcoin Holds Stable as ETF Outflows Increase

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Bitcoin BTC$89,302.32 traded above $64K even as outflows from bitcoin exchange-traded funds (ETFs) picked up. Market data shows that the U.S.-listed ETFs had a daily total net outflow of $217 million. This brings the total outflow this week to $244.49 million. In comparison, bitcoin is up around 3.7% in the past seven days. According to JPMorgan, the correlation between bitcoin ETF prices and inflows has weakened, dropping from a high of 0.84 in January to 0.60 in recent assessments.

Cathie Wood's ARK Invest offloaded the last of its shares in ProShares Bitcoin Strategy ETF (BITO) on Thursday. The investment firm sold 237,983 BITO shares worth $6.7 million at Thursday's closing price of $28.22 from its Next Generation Internet ETF (ARKW). ARK bought over 4 million of the shares late last year as a short-term play in anticipation of the approval of spot bitcoin ETFs in the U.S., with plans to swap them once the approval came. Following consistent sales in January, ARK has sold the rest of its BITO shares in the past week.

The European Parliament voted to adopt a new package of laws tightening money laundering and terrorist financing measures across the EU. The laws target large cash payments, crypto firms and football clubs, among others. In addition to creating a single rulebook for the 27 nations that make up the European Union, the package approved on Thursday sets up an anti-money laundering authority based in Frankfurt to oversee the implementation of the relevant frameworks – particularly those the bloc deems as the "riskiest entities." The new laws include "enhanced due diligence measures and checks on customers’ identity, after which so-called obliged entities (e.g. banks, assets and crypto assets managers or real and virtual estate agents) have to report suspicious activities to [Financial Intelligence Units] and other competent authorities," a press statement on the vote said.

Chart of the Day

• The chart shows that the crypto exchange Deribit's bitcoin volatility index (DVOL), an options-based measure of expected price volatility over the next 30 days, has collapsed from an annualized 72% to 55% in five days.
• "This is the result of spot [price] being stuck in a tight range and the basis yield drying up. The desk has seen many customers pivot to option selling strategies," Singapore-based QCP Capital said in a market update.
• Selling or writing options represent a bearish view of volatility or a degree of price turbulence.
• Source: TradingView.

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