Core Fund Update
May has continued this year’s strong start in the Web3 industry with the approval of the Ethereum ETF, ongoing regulatory developments, ever-growing BTC inflows, and significant advancements in altcoins. With Bitcoin returning back to its upper-range of $70,000 and Ethereum nearing the $4,000 mark, enthusiasm and investor confidence have surged throughout May.
Following the market’s retrace to its highs this month, the Core Fund has capitalized on the positive momentum, seeing a 5% return. This follows leveraging of upcoming market trends and asset allocations designed to maximize returns. Join us as we take a closer look at this month’s most significant developments!
US SEC Approves spot Ethereum ETFs
Diving deeper into May’s developments, the approval of the Ethereum ETF stands out as particularly noteworthy. After months of anticipation, the U.S. Securities and Exchange Commission (SEC) approved exchange applications for Spot Ethereum ETFs. This marks another significant milestone in the Web3 sector, after the recent listings of US Spot Bitcoin ETFs. The path is now clear for the trading of spot ether ETFs on U.S. stock exchanges in the near future and would indicate a regulatory shift that suggests Ethereum will be regarded more as a commodity than as a security.
Speculation about the future approval of spot ETFs for major Web3 assets has intensified. Now that flagship Web3 asset Ethereum has received regulatory approval, it potentially paves the way for other significant assets in terms of market capitalization. This development not only validates the market maturity and investor interest in the broader cryptocurrency field but also signals a wider acceptance of Web3 technologies.
Regulatory Developments Continue To Show Progress
May also showcased one of the industry’s most significant legislative developments with the House of Representatives passing the Crypto-FIT21 Bill. This legislation, aimed at regulating the Web3 industry, has now progressed to the Senate for further needed approval. Although the date for the Senate vote has not been specified, the bill’s advancement is a promising step toward necessary regulation in the U.S.
The U.S. is following in the footsteps of Europe, which has effectively guided the Web3 market for over an year through the The Markets in Crypto Assets Regulation (MiCA) which came into effect in June 2023. These legislative developments are designed to clarify asset classifications and exchange operations, thus minimizing legal uncertainties and fostering the development of Web3 companies. By offering clearer guidelines, these bills aim to enhance industry innovation, attract global talent, and ensure a more secure Web3 sector.
BTC ETFs Inflows Continue To Grow As Institutional Holders Surge
In May, it was also revealed that more than 600 firms have disclosed substantial investments in spot Bitcoin ETFs. These investment firms reported owning a collective $3.5 billion in Bitcoin, with major players including Morgan Stanley, JPMorgan, Wells Fargo, UBS, BNP Paribas, Royal Bank of Canada, and hedge funds such as Millennium Management and Schonfeld Strategic Advisors. Notably, Millennium Management stands out as the largest BTC ETF investor with $1.9 billion invested. These investments in Bitcoin ETFs by prominent financial institutions and renowned hedge funds, signal strong institutional confidence in Bitcoin.
Given that the BTC ETF are a new financial instrument on Wall Street, numerous institutions are commiting with modest capital allocations, dedicating 1-2% of their asset portfolios. This trend is also followed by global pension funds exploring the idea of gradual asset allocation in Web3 assets. This strategy allows for a preliminary evaluation period, allowing them to assess the industrys ever growing validity. This approach shows that these institutions are still learning about the industry and want to make sure it’s a good choice before investing more heavily.
Following the influx of institutions into Bitcoin, on May 5th, the Bitcoin Network experienced a significant milestone in its 15-year history by surpassing one billion transactions. This achievement coincides with the highest inflow to BlackRock’s ETF since April 5, reversing a trend of minimal inflows observed over April. The simultaneous increase in institutional investments and network activity showcases that both on-chain activity and financial market activity continues to bloom.
Major US Financial Institutions Complete Major Pilot With ChainLink
May also showcased major developments in other Web3 organizations, with Chainlink successfully completing a pilot project aimed at accelerating the tokenization of funds. This project, named Smart NAV, tested a standardized process for distributing data of funds across various blockchains using Chainlink’s interoperability protocol, CCIP. The Depository Trust and Clearing Corporation and major U.S. financial institutions such as JPMorgan and BNY Mellon collaborated with ChainLink as the other major institutions like BlackRock have already seen major pushes into the industry with their on-chain tokenized fund.
The successful completion of this pilot is a key step in using blockchain technology for the tokenization of real-world assets like bonds and funds, potentially offering benefits such as enhanced operational efficiencies and increased transparency. The push of Web3 technology in traditional financial systems showcases that institutions are recognizing the net benefit of using this technology.
Conclusion
In conclusion, May has been a monumental month for the Web3 industry, marked by significant regulatory approvals and institutional investments. The Core Fund, closely aligned with these trends, has leveraged the positive market momentum to achieve this substantial return. The approval of Ethereum ETFs and the successful pilot projects like Chainlink’s Smart NAV showcase the industry’s maturation and continue to drive the industry forward.
Want to take advantage of these developments before the market comes to full maturity? Now is the perfect time to get involved.
Feel free to reach out through our contact page or schedule a consultation to discuss how you can be a part of the Core Fund!
