Bitcoin market value falls below $1 trillion, is the bull market over? At least institutional investors don't think so

Affected by the sharp drop in US stocks, the cryptocurrency market suffered its biggest drop since March today, and the market value of Bitcoin fell back below $1 trillion. Many people began to ask, is the bull market over?

The answer may be no. At least from the perspective of institutional investors’ interest in the cryptocurrency market, the bull market is still there, as evidenced by two major pieces of news yesterday:

1. Fidelity, one of the world's largest financial institutions, is seeking approval from the US SEC to launch a Bitcoin ETF

2. US exchange giant Chicago Board Options Exchange (Cboe) may re-list Bitcoin futures

1. Fidelity applies for Bitcoin ETF

One of the world’s largest financial institutions, Fidelity, is seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch a Bitcoin ETF, a new SEC filing shows.

The ETF, which will be registered as the Wise Origin Bitcoin Trust, will allow retail investors to bet on the price of bitcoin without having to buy and store the cryptocurrency themselves. If approved, Fidelity Service Company Inc will serve as administrator and Fidelity Digital Assets will custody the underlying bitcoin for the ETF.

The SEC has yet to approve any bitcoin ETFs, though many companies have applied. Gemini, a crypto services company owned by the Winklevoss twins, has applied for multiple bitcoin ETFs since 2013. Anthony Scaramucci’s SkyBridge Capital just filed for one, and asset manager VanEck has been trying to launch one for years.

Cryptocurrency investors have been eager to buy Bitcoin ETFs, and companies like Grayscale and Galaxy Digital have also offered similar cryptocurrency investment products to try to meet this demand. The Grayscale Bitcoin Trust (GBTC) currently manages more than $36 billion in Bitcoin, although it has a -12% premium.

The proposed ETF is not Fidelity’s first foray into cryptocurrencies — last year, the bank launched its first bitcoin-only investment product in the form of the Wise Origin Bitcoin Index Fund I.

Fidelity’s global macro director said in a recent statement that Bitcoin has “unique advantages” over gold.

2. US exchange giant Chicago Board Options Exchange (Cboe) may re-list Bitcoin futures

Ed Tilly, CEO of exchange giant Cboe, said they may re-list Bitcoin futures.

Tilly told Bloomberg in a report published Thursday:

“We are still interested in this space, we have not given up. We are passionate about building the entire platform. There is a huge demand for Bitcoin from retail and institutional sources, and we need to be here.”

In December 2017, Cboe became the world’s first regulated exchange to launch Bitcoin futures, but for unknown reasons it decided to stop offering Bitcoin futures from June 2019. However, the exchange did not rule out the possibility of issuing cryptocurrency derivatives again at the time. It said it was “evaluating” its strategy.

After Cboe stopped Bitcoin futures, the cryptocurrency market ushered in its biggest bull run in history in 2020, with institutional investors pouring in crazily.

Cboe's competitor, the Chicago Mercantile Exchange Group (CME Group), also began offering Bitcoin futures in December 2017, but they have persisted with the service and have become the largest regulated Bitcoin futures venue in the field. As of March 24, 2021, CME's Bitcoin futures open interest was close to $3 billion, ranking only behind unregulated exchanges Binance, OKEx, and Bybit.

In addition to Bitcoin futures, Cboe also seems keen on listing Bitcoin exchange-traded funds (Bitcoin ETFs). Asset management companies VanEck and WisdomTree have both applied to the US SEC to list Bitcoin ETFs on the Cboe bZx exchange.

“We are very eager to get the VanEck ETF approved,” Tilly said.

Cboe will also launch crypto indexes this year, after signing a partnership with trading software company CoinRoutes in December.