Bitcoin ETP exposure hits all-time highs as approval window for spot ETFs nears end: K33

Quick Take

  • Bitcoin exchange-traded product exposure has reached all-time highs ahead of the latest approval window for bitcoin spot ETFs closing on Friday.
  • Ether futures are also trading at a premium relative to bitcoin for the first time since August, driven by BlackRock’s ether spot ETF filing and strong institutional demand, according to K33 Research.

Institutional demand for bitcoin exposure through exchange-traded products has grown significantly over the past month, growing by 27,095 BTC -2.21% to record levels and outpacing the flows in June and July following BlackRock’s bitcoin spot ETF filing, according to the latest K33 Research report.

Beyond the bitcoin ETP inflows, sustained high exposure on the CME points toward strong institutional demand for bitcoin as the latest Securities and Exchange Commission bitcoin spot ETF deadlines approach, K33 Research Senior Analyst Vetle Lunde and Vice President Anders Helseth said.

Bitcoin under management by exchange-traded vehicles. Image: K33 Research.

A narrow window to approve all current bitcoin spot ETF applications ends on Friday, Nov. 17. That deadline specifically relates to applications from Hashdex and Franklin. However, if the SEC wanted to approve all applications at the same time, this window is an opportunity to do so. Once the window passes, although there is another deadline for the Global X ETF on Nov. 21, all current filings can no longer be accepted simultaneously, shifting emphasis to the next deadline on Jan. 10, the analysts said.

Bitcoin spot ETF SEC deadlines. Image: Bloomberg.

“In this scenario, momentum might slow in the crypto markets as there would likely be multiple weeks to wait for significant news relating to the ETFs,” Lunde and Helseth added.

CME traders are bullish, but crypto natives are not so optimistic

CME traders continue to exhibit an overall bullish stance, with the annualized futures premiums for both bitcoin and ether futures remaining above 15% for three consecutive weeks, the K33 analysts said. CME's open interest in bitcoin also reached a new peak last week, surpassing 110,000 BTC and positioning CME as the world's largest bitcoin derivatives exchange, outstripping Binance, they added.

Notably, that institutional optimism was not mirrored by crypto-native traders, Lunde and Helseth said. With funding rates trending above neutral since Nov. 9 as perps traded at consistent premiums to the spot market, the latest bitcoin rally appeared to be driven by heightened caution from the short side, the analysts noted — something that if growing alongside rising open interest, often foreshadowed long liquidations.


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

Yesterday, bitcoin positions witnessed the largest liquidation event since August’s plunge to $26,000, with $89.5 million in long liquidations across OKX, Binance and Bybit, according to Velo Data.

BTC liquidations. Image: Velo Data.

Bitcoin’s price fell around 4% on Nov. 14 from a high of $36,740 to $35,230 before recovering, according to The Block’s price data. Bitcoin currently trades at $36,196.

Ether futures trading at a premium relative to bitcoin

The recent filing by BlackRock for an ether spot ETF has attracted fresh longs to the CME’s ether futures market, leading ether’s basis to trade at a premium relative to bitcoin for the first time since August. The basis is the difference between the spot price of an asset and its futures price.

“Odds for ether spot ETF approvals are slightly worse than bitcoin spot ETFs due to technical nuances related to Grayscale’s SEC lawsuit,” Lunde and Helseth wrote. “Nonetheless, CME premiums and burgeoning activity represent a solid market signal, favoring continued relative strength in ether.”

Ether premiums surpass bitcoin on the CME. Image: K33 Research.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the immersive metaverse. You can get in touch with James on Twitter or Telegram via @humanjets or email him at [email protected].


To contact the editor of this story:
Adam James at
[email protected]