MicroStrategy (MSTR) Joins the Nasdaq 100, ETFs BlackRock and Fidelity Drive $500 Million USD in Ethereum and More: Dec 12

Bitcoin is currently priced at $101,110 with a +4.67% increase in the past 24 hours, while Ethereum trades at $3,831, up +5.60% over the same period. The futures market remains balanced, with a 50.9% long and 49.1% short position ratio. The Fear and Greed Index, a key measure of market sentiment, upgraded the sentiment from 74 (Extreme Greed) yesterday to 83 (Extreme Greed) today. The crypto world is changing fast and transforming traditional finance as well. Cryptocurrency and blockchain technology are redefining global markets. From Bitcoin-backed ETFs like BlackRock and Fidelity buying a record-breaking $500 Million in Ethereum ETF investments and the rise of stablecoins, Citi’s research numbers show how crypto is transforming traditional finance. This article explores three key trends: MicroStrategy joining the Nasdaq 100, Ethereum ETFs driving billions in trading volume, and stablecoins reshaping global finance with trillions in transactions.

1. Spot Bitcoin ETFs saw net inflows for nine consecutive days, and spot Ethereum ETFs saw net inflows for twelve consecutive days.

2. MicroStrategy  (MSTR) Joins the Nasdaq 100.

3. ETFs BlackRock and Fidelity Drive $500 Million USD in Ethereum.

4. Stablecoins Rival US Dollar Dominance By 1.4 Trillion in Q1 2024 and continue the trend into 2025 according to Citi Wealth.

5. CEO of BNY Mellon: Tokenization is a major trend in financial markets.

 Crypto Fear & Greed Index | Source: Alternative.me 

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Source: Eric Balchunas

MicroStrategy  will join the Nasdaq 100 stock index on December 23. This is a major milestone for a company that has shifted its focus to Bitcoin. Since adopting its Bitcoin strategy in 2020, the stock price has surged 2500%. It climbed from about 140 USD per share to over 3600 USD as of December 2024. Bitcoin recently passed 100,000 USD, boosting MicroStrategy further.

Inclusion in the Nasdaq 100 will put MicroStrategy in the Invesco QQQ Trust ETF. This ETF manages 322 billion USD in assets. Institutional investors will now have easier access to MicroStrategy, which holds 152000 Bitcoin valued at over 15.2 billion USD. Analysts predict the company could join the S&P 500 next year if its market capitalization reaches 14 billion USD.

Critics highlight risks. MicroStrategy has 2.4 billion USD in debt, much of it financed at low interest rates around 0.75%.

Source: The Block

Ethereum  continues to attract institutional investors. BlackRock and Fidelity bought 500 million USD worth of Ethereum in two days. They used Coinbase and its Prime platform to execute these trades.

BlackRock's ETHA ETF recorded 372.4 million USD in trading volume on December 10. Fidelity's FETH ETF added 103.7 million USD in trading volume the same day. Combined, these ETFs accounted for 476.1 million USD in activity. Ethereum traded at 3830 USD on December 11. The price increased 5.1% in 24 hours with 39.3 billion USD in trading volume.

The U.S. Securities and Exchange Commission approved eight spot Ethereum ETFs in May 2024. Institutional inflows into Ethereum now exceed 3 billion USD. Total assets under management for Ethereum ETFs stand at about 12 billion USD.

Source: The Block

Stablecoins now dominate cryptocurrency trading, making up over 80% of total volume. Tether holds a market capitalization of 83 billion USD. Circle’s USDC has 27 billion USD. Combined, these stablecoins handle over 1 trillion USD in monthly transactions.

Citi Wealth reports stablecoins are strengthening the global dominance of the US dollar. Stablecoins backed by US Treasury bills represent 1% of total Treasury purchases today. Regulatory clarity could double stablecoin adoption by 2026. Treasury demand from issuers might surpass 150 billion USD annually.

“Rather than usurping the dollar, therefore, this variety of cryptocurrency could thus make dollars more accessible to the world and reinforce the U.S. currency’s longstanding global dominance."

In Q1 2024, stablecoins processed 5.5 trillion USD in transactions. Visa handled 3.9 trillion USD in the same period. Tether alone accounted for 3.4 trillion USD in transfers. Ripple's RLUSD stablecoin recently received regulatory approval. This approval opens the door for more competition in the stablecoin market.

"Originally, cryptocurrencies such as bitcoin were conceived as rivals to the central bank–issued currencies. Indeed, some believed – and continue to believe – that bitcoin might end the U.S. dollar’s hegemony," the strategists wrote in a new report. "However, stablecoins – which account for more than four-fifths of cryptocurrency trading volume – are challenging that narrative."

Citi points to the fact that the vast majority of stablecoins are pegged to the U.S. dollar while issuers keep both USD and U.S. Treasuries on reserve. They also suggest that if the U.S. government moves to further legitimize stablecoins, that could bolster USD's dominance.

"Greater regulatory clarity could also potentially further boost [stablecoins] appeal. If so, demand for U.S. Treasury bills from stablecoin issuers might grow from around 1% of purchases today," said Citi. "Rather than usurping the dollar, therefore, this variety of cryptocurrency could thus make dollars more accessible to the world and reinforce the U.S. currency’s longstanding global dominance."

Traditional payment providers are adapting fast. Visa partners with Circle to settle transactions using USDC. PayPal launched its PYUSD stablecoin in August 2023. These moves show how traditional and crypto-native systems are converging.

Citi also included data illustrating how widely used stablecoins have become.

"Activity has reached record highs, with $5.5 trillion in value across the first quarter of 2024. By comparison, Visa saw about $3.9 trillion in volume," the strategists said. "In response to this challenge, Visa, PayPal and other traditional providers are adapting by offering stablecoins of their own or settling transactions in other firms’ coins."

Read more: What Is RLUSD? A Comprehensive Guide to Ripple's Stablecoin and Its Impact on XRP

Cryptocurrency and blockchain technology are reshaping global finance. MicroStrategy’s 2500% stock price surge and 152,000 Bitcoin holdings highlight Bitcoin’s role in corporate strategy. Ethereum ETFs are driving billions in trading volume and attracting major institutional players. Stablecoins now process trillions in transactions each year while reinforcing the dominance of the US dollar. These trends are not just reshaping finance. They are building the future of the global economy.

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