Crypto Market Framework Takes Shape, BTC Holds Steady

Key Takeaways

• The SEC is providing greater regulatory clarity for crypto products in the US
• BTC ETF flows continue to dominate as ETH ETF flows start to gain traction
• A BTC cup-and-handle chart pattern targets the $140k–$160k region

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Digital Asset Commentary

In a continuation of its push for regulatory clarity, the US SEC last week released a 12-page disclosure framework for new crypto products entering the market. This new guidance is expected to streamline the process of bringing crypto products to market and expand the range of offerings, including altcoin ETFs, staking features, and in-kind creation & redemption mechanisms. The SEC also approved the conversion of Grayscale’s multi-asset trust, GDLC, into an ETF, but just one day later issued a stay under Rule 431, temporarily pausing its launch. As a result, the fund is unlikely to begin trading as an ETF until the broader crypto framework is finalized later this year. Overall, these developments point to a wave of new crypto product launches in the US by year-end.

Eighteen months after the debut of nine US BTC ETFs, IBIT continues to capture the majority of inflows, while GBTC outflows have slowed to a trickle. Year-to-date, net flows stand at $14.47B after bringing in $35.21B in 2024, with IBIT now the fastest ETF ever to reach $70B in AUM. Meanwhile, US ETH ETFs have seen much smaller inflows, gathering just $4.5B in net flows since their launch on July 23, 2024. The eventual addition of staking features, offering yield, could help boost interest in ETH ETFs and differentiate them from BTC ETFs. Stablecoin clarity under the GENIUS Act may also provide tailwinds for ETH flows, as most stablecoins are built on the ETH network. Ultimately, BTC benefits from a simpler “digital gold” narrative with clearer price appreciation potential, whereas ETH’s positioning as “digital oil” for a decentralized world computer remains more complex and less understood by traditional finance.

While the market waits for a regulatory catalyst, BTC’s price action remains in a holding pattern, poised for explosive potential upside. The Cup & Handle pattern, if confirmed, suggests a measured move toward the $140k–$160k range. The current lack of volume and volatility during this period of range contraction is typical of market behavior before sharp expansions. A daily close below $105k would be a warning sign for the pattern, with likely invalidation if price makes a new lower low around $100k.

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