Spot ETFs Approved to Combat Inflation in Argentina
Argentina’s decision to approve spot ETFs marks a pivotal step in integrating cryptocurrency into its financial markets. The new move is being carried out through the CEDEAR programme, under Regulation No. 1030, which now allows Bitcoin and Ethereum spot ETFs to be traded. This change comes after Argentina previously prohibited spot ETFs under Law No. 27440.
According to Roberto E. Silva, the President of CNV, the approval of these ETFs is part of an innovative effort to provide new investment options. The CNV also announced the approval of other ETFs, including gold ETFs, S&P 500 Index ETFs, and Chinese stock market indexes, aimed at diversifying investment options for traders.
This strategic move aligns with President Javier Milei’s economic plan to stimulate Argentina’s digital economy. With inflation dropping from nearly 300% in April 2024 to below 200%, the introduction of crypto ETFs provides a modern financial solution. The approval is also timely as the country seeks to embrace digital currency innovation in response to ongoing inflationary challenges.
Argentina’s Embrace of Digital Assets
Argentina is one of the few Latin American countries where Bitcoin transactions are allowed, and it has even publicly showcased Bitcoin mining operations by the Central Bank of Argentina (BCRA). This is the first time a central bank has displayed crypto mining activities, further emphasizing the government’s support for digital currencies. The approval of spot ETFs marks the country’s ongoing efforts to incorporate digital assets into mainstream financial systems.
Bitcoin and Ethereum Spot ETFs See Continued Inflows
Argentina’s move to approve spot ETFs coincides with a continued surge in Bitcoin and Ethereum spot ETF inflows in the US. As of December 11, Bitcoin spot ETFs recorded a total inflow of $223.1 million, with major contributions from financial firms like Fidelity, ARK Invest, and Grayscale.
Specifically, Fidelity accounted for over $121.9 million of the Bitcoin ETF inflows, followed by ARK Invest’s $52.7 million and Grayscale’s $20.1 million. Notably, BlackRock’s IBIT ETF did not register any inflows, and Valkyrie experienced a net outflow of $2.4 million.
Ethereum Spot ETFs Also Experience Surge
Ethereum spot ETFs have seen a similar rise in inflows. On December 10, Ethereum spot ETFs recorded $101.6 million in net inflows, with BlackRock leading the charge by contributing $73.7 million. Other contributors included Grayscale ETH with $13.4 million, Bitwise’s $8.2 million, and VanEck’s $5.6 million. Despite this, Grayscale ETHE saw a net outflow of $2.3 million.
Fresh Purchases of Ethereum Spot ETFs by BlackRock and Fidelity
Recent reports from Arkham Intelligence highlight that BlackRock and Fidelity have made significant investments in Ethereum spot ETFs, totaling more than $500 million in the past 48 hours. These purchases occurred through Coinbase Prime, an institutional crypto trading platform, following the approval of eight Ethereum spot ETFs by the US SEC.
As of December 11, Ethereum (ETH) saw a 5.1% increase in value, trading at $3830, with a trading volume of $39.3 billion. BlackRock’s iShares Ethereum Trust ETF has become the largest issuer of Ethereum spot ETFs with a total inflow of $2.93 billion, while Fidelity’s Ethereum Fund follows with $1.35 billion in inflows. December 10 marked the largest activity for both firms, with BlackRock gaining $372.4 million and Fidelity $103.7 million in trading volumes.
This surge in institutional investment highlights the growing interest in digital assets and the increasing integration of cryptocurrencies into the global financial system. BlackRock and Fidelity’s expansion into crypto ETFs demonstrates their long-term commitment to digital asset portfolios.
The Future of Crypto ETFs and Institutional Activity
BlackRock has filed for approval with the SEC to begin Ether spot ETF trading, pending clearance from the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC). The SEC is expected to make a decision by April 2025.
The recent actions of BlackRock and Fidelity are indicative of the growing trend of institutional activity in digital currencies, particularly as spot ETFs gain approval in early 2024. These developments underscore the increasing integration of digital assets into mainstream financial systems and pave the way for broader access to crypto investments.
Conclusion: Argentina Joins the Crypto ETF Movement
Argentina’s approval of Bitcoin and Ethereum spot ETFs marks a significant milestone in the adoption of digital assets. By opening up its financial markets to these ETFs, the country is positioning itself at the forefront of cryptocurrency integration, helping to modernize its financial system and combat inflation. With spot ETFs continuing to see rising inflows in the US, Argentina’s decision to approve these products is a timely and strategic move that could pave the way for more nations to follow suit.
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