Ark Invest June Bitcoin Report: Dawn of the ETF Era Approaching?

Ark Invest, a fintech investment firm, has released its latest Bitcoin report for June, titled "The Dawn of the ETF Era?" While warning of a potential economic downturn, the report remains optimistic about long-term holders and institutional involvement in Bitcoin. Ark and 21Shares resubmitted their Bitcoin spot ETF filing on June 28th, citing the shrinking discount of Grayscale Bitcoin Trust (GBTC) as an indication of market expectations for the approval of a Bitcoin spot ETF. Could this be the dawn of the ETF era?

Bitcoin Fundamentals Solid, Technicals Have Strong Support

According to Ark's analysis, nearly 70% of Bitcoin's circulating supply has not moved in at least a year, indicating a strengthening base of Bitcoin holders and increasing confidence among long-term Bitcoin investors.

Bitcoin closed at $30,460 at the end of June, up 11.9% for the month. BTC found strong technical support at the 200-week moving average of $26,200, with short-term investor cost basis at $27,465.

GBTC Discount Shrinks, Institutions See Bitcoin as Investment Option

Since BlackRock filed for a Bitcoin spot ETF on June 15, the Grayscale Bitcoin Trust (GBTC) discount has decreased from 42% to a one-year low of 30%. Ark suggests that the narrowing discount may indicate market expectations for the approval of a Bitcoin spot ETF, increasing the possibility of GBTC converting to an ETF.

The balance of Bitcoin held by over-the-counter (OTC) trading desks serving as agents for institutional activity reached a one-year high in June, growing by 60% by the end of the month. Ark indicates that this signifies institutions and large capital allocators are starting to view Bitcoin as an investment option.

Divergence Between Two Major Stablecoins Widens, Economic Recession Signs Emerge

The report also highlights the trend differences between the two major stablecoins, USDC and USDT. Year-to-date, USDC's supply has decreased by 37%, while USDT has increased by 25%, reaching a historical high in June. Ark attributes this difference to the uncertainty in the U.S. regulatory environment, driving some crypto activities offshore, and a temporary hiccup following Circle, the issuer of USDC, holding $3.3 billion reserves in the collapsed Silicon Valley bank in March.

Finally, the Ark report also warns of upcoming economic challenges, with the U.S. Gross Domestic Income (GDI) continuing to decline domestically, and new orders in the Manufacturing Purchasing Managers' Index also on a downward trend, indicating a potential economic recession.