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Good morning everyone,

The US stock market fell on Thursday, with the tech-heavy Nasdaq dropping 3.6% and the S&P 500 falling 2.1% amid disappointing earnings results from market bellwethers such as Alphabet and Tesla.

Against this backdrop, the price of Bitcoin initially held up, hovering around USD 66,000, but began to fall after the Mt. Gox news (see below).

Let's take a look at the stories that have moved the crypto markets this week, aside from the slump in tech stocks:

1. Ether ETFs started trading on Tuesday

2. The Mt. Gox floodgates are open

3. Donald Trump to speak at Bitcoin 2024 conference on Saturday

DISCLAIMER: This newsletter is not financial advice. It does not take into account your financial situation, is general in nature, and is for educational purposes only.

Also, this newsletter contains affiliate links. This means that I may receive a commission from them. But for Crypto Down Under, I only choose products I use myself and can recommend wholeheartedly. Don’t forget to do your own research.

1. Ether ETFs start trading

On Tuesday 23 July, Ether ETFs began trading in the US.

(Fun fact for my Aussie readers: In Australia, a spot Ether ETF has been trading on Cboe Australia since May 2022. Not investment advice.)

The two main metrics to watch when a new ETF launches are trading volume (large volumes lower the spread and attract more buyers) and flows (inflows/buying vs. outflows/selling).

The chart below shows Bloomberg's Day 1 volume and flows figures (USD million) for the ETH ETFs on the left and the Bitcoin ETFs on the right.

As you can see, the ETH ETFs saw USD 1.1 billion in volume and USD 108 million in inflows on the first day. That's about 24% of the volume and 16% of the inflows that Bitcoin ETFs saw on their first day of trading in January.  

The numbers are in line with what market observers were expecting and are a "solid A", as Eric Balchunas, senior ETF analyst for Bloomberg, put it.

However, the price of Ether could see some volatility in the short term as people flee the ETHE ETF in the same way they fled the GBTC ETF after it started trading.

Key takeaway: While the launch of the Ether ETFs went well, an ETF listing is a marathon, not a sprint. Give it some time to be fully digested by the market. In the long term, the launch of a crypto ETF other than Bitcoin bodes well for the industry and can be seen as a sign that more altcoins will come to Wall Street.

2. Mt. Gox floodgates are opening

I've talked about the looming Mt. Gox repayments several times in this newsletter.

In a nutshell: Users of the now-defunct Mt. Gox crypto exchange lost their funds in a catastrophic hack in 2014. Now, after a decade of waiting, they will be paid back.

After cryptocurrency exchange Kraken already started paying out, cryptocurrency exchange Bitstamp received Bitcoin, Bitcoin cash and Ethereum from the Mt. Gox trustees on Wednesday to repay victims of the hack.

In total, around 20,000 former Mt. Gox users will receive over USD 9 billion in crypto. However, it's unclear how much of this will be sold. The former Mt. Gox users may decide to continue to hodl.

Key takeaway: For USD 9 billion of selling pressure coming in, the market is holding up well so far. Remember when the German state of Saxony sold USD 2.7 billion worth of Bitcoin earlier this month? That scared the market much more than the Mt. Gox repayments, even though the amount that could end up being sold is much larger this time.

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3. Donald Trump to speak at Bitcoin 2024

I've written about how the Republican candidate for the US election in November, Donald Trump, has embraced Bitcoin.

It makes sense because according to the Trump campaign, 50 million Americans own crypto.

Now, having already made some big statements about Bitcoin and crypto, Donald Trump is scheduled to speak at the Bitcoin 2024 conference in Nashville on Saturday. According to the conference agenda, the Republican contender will give a 30-minute keynote speech.

The Bitcoin conference is the largest gathering of Bitcoiners in the world. If you ever wanted to make a big statement about Bitcoin, this is the place to do it.

Now, you have to take the following information with a grain of salt, because it's just rumours at this stage.

But.

Trump may want Bitcoin to become a reserve currency. Even CNBC was talking about it this week.

If that's what Trump has to say on Saturday, you'd better buckle up. Bitcoin could go parabolic very quickly.

If Trump comes out and says something completely different, there could be a bit of disappointment in the market, but his embrace of Bitcoin is still a positive for the industry.

Key takeaway: I'm not a Trump supporter by any means. There is a school of thought in crypto that glosses over all of Trump's very obvious shortcomings and embraces him for the sake of moving the industry forward.

But I disagree because I don't think things are that black and white. For example, if Trump makes Bitcoin a reserve currency but starts World War 3 with China, that's... not going to be a good outcome.

While I think Trump will win the election in November (Polymarket's odds of a Trump win are 63%), I focus on policy, not politics.

And I think that Trump's embrace of Bitcoin and crypto will move the needle so much that even a Democratic White House would have to change its tune on Bitcoin and crypto policy.

Have a great weekend everyone!

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