The growth of BTC dominance decelerates due to the uncertainty of ETF application.

Last week, the top 30 cc index increased from 5,713 to 5,852, posting a 2.4% rise. BTC price pumped 6.1% from $ 7,711 USD to $ 8,180 USD. Compared with their last week’s strong performance, the growth rates both decelerated. On the other hand, the one-week average daily trading volume was $ 13.8 billion USD, more than the prior week’s $12.9 billion USD, reporting a 6.6% increase. The price and volume both grow in these two weeks, which shows signs of bullish market

Moreover, BTC dominance appeared at the beginning of May and continues. According to CoinMarketCap, BTC dominance has posted up to 48% on July 30, approaching 50% in Dec. 19, 2017 when the BTC price was $ 17,777 USD. BTC price closed at around $7,500 USD when this article was edited.

BTC ETF application is not going well

On July 21, SEC decided to postpone Direxion’s Bitcoin ETC application to September 21 and CBOE’s application is set to be announced in August if there is no further announcement from SEC.

On July 26, SEC rejected Winklevoss’s bitcoin ETF application again because it couldn’t convince SEC BTC market has been well-supervised. Following the news, BTC dropped below $ 8,000 USD. In SEC’s statement, it had great concerns about the positive connection between ETT value and Gemini exchanges managed by Winklevoss, which is regarded as the market manipulation.

The big rise of BTC price is triggered by the market expectation of the up-coming bitcoin ETF approval. However, the above bad news disappointed the market and caused prices to drop.

Why is ETF so important for the cryptocurrency market?

An exchange-traded fund (ETF) is an investment fund which can be easily accessed and invested by retail investors without any professional knowledge of cryptocurrencies. Generally, ETF is distributed by mutual fund companies and assets management companies. If so, there will be billions of institutional money moving into the cryptocurrency market. On the other, there is no denying that the investors have calmed down and waited for the real application of blockchain technology and legalization by the government agencies. ETF is a legal asset class approved by the government.

What types of bitcoin ETF have been proposed?

According to the application filings proposed to SEC, we can be classified bitcoin ETF as settled and non-settled bitcoin ETF. The settled bitcoin ETF directly invests in the real bitcoin assets. On the other hand, the non-settled bitcoin ETF indirectly invests in the bitcoin by longing bitcoin futures. Currently, SEC has rejected most settled bitcoin EFT (if not, it will be still during the application). We expect the first waves of approvals will be non-settled bitcoin ETF based on our market observation.

Why has bitcoin ETF become so popular in 2018 H2?

The main reason is the statement made by SEC this May, pointing out bitcoin and ETH should be classified as digital goods instead of security. It triggers the bitcoin supporters’ expectation of SEC’s approval for bitcoin ETF. They believe the market price would be pumped high with the institutional money if ETH is coming to the reality, especially for BTC which is limited and the most well-known.