Bitcoin [BTC] saw a decline in value this week as traders opted for de-risking strategies before and after the Federal Reserve rate decision on March 18th.
Following a 15% surge to reach a local high of $76K, partly influenced by the escalating tensions in West Asia, BTC reversed its gains and dropped by 10% in the last three days. The risk-off move was primarily driven by ETF investors.
In the subsequent days, the Spot BTC ETFs experienced net outflows of $323 million, breaking the seven-day inflow streak observed previously.
The BTC pullback has now reached a crucial 50-day Simple Moving Average (SMA, blue), with another support level around $65K. These levels could serve as a new foundation for bullish momentum, but the upcoming mega quarterly Option expiry may impact their defense.
Morgan Stanley Updates S-1 for Spot BTC ETF
In the meantime, Morgan Stanley has filed an amended S‑1 registration with the SEC, introducing the MSBT ticker for its spot BTC ETF application.
In their initial application back in January, the bank identified Coinbase and BNY Mellon as custodians. Coinbase would handle prime brokerage responsibilities, while Mellon would serve as the cash custodian.
If approved, Morgan Stanley would become the first major U.S. bank to directly issue a spot BTC ETF, following the footsteps of Canada’s Scotia Bank in offering crypto ETF products directly.
According to Amy Odelnburg, Morgan Stanley’s head of crypto strategy, crypto adoption is still in its early stages, with current demand predominantly from self-directed investors rather than advisor-managed accounts.
Approximately 80% of the distribution of these ETFs on our platform is driven by self-directed investors.
Bloomberg ETF analyst James Seyffart noted that the amendment indicates the imminent debut of MSBT.
SEC Chairman Paul Atkins Clarifies Stance on Crypto Assets
SEC Chairman Paul Atkins has offered clarification on the agency’s approach to crypto assets following the recent interpretation that categorized most digital assets as non-securities.
Atkins views this as just the beginning and believes the guideline will serve as a bridge as Congress works on advancing the broader market structure bill, the CLARITY Act.
He stated:
Our rules need to be clear enough to provide market guidance, flexible enough to accommodate innovation, and strong enough to protect investors.
He cautioned that the ‘token taxonomy’ was the agency’s interpretation, subject to potential challenges or deviations by the court. Nevertheless, he pledged to follow up on the guidance with a proposed rule and a sandbox for exemptions to promote innovation.
We will soon introduce a proposed rule to implement much of this. We will also establish a series of exemptions, similar to a sandbox, to allow experimentation and development of proof-of-concept for new products.
Final Summary
- BTC’s decline halted around $70K following a de-risking move by ETF investors resulting in $323M outflows
- SEC chair announced forthcoming proposed rules related to the recent interpretation of the crypto assets framework
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