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Crypto: Bitcoin Spot ETFs Debut Strongly, Circle Prepares for IPO, and More

Fernanda T
Latest News
January 11 2024 8:00AM

GBTC, IBIT, and FBTC have a strong debut

After years of anticipation, the Bitcoin ETFs were finally approved in the USA and started trading on Thursday. BitMex Research ranked the 11 newly launched funds by trading volume on the first day, with the ETFs from Grayscale (AMEX:GBTC), BlackRock (NASDAQ:IBIT), and Fidelity (AMEX:FBTC) leading in volume.

In comparison, the futures-based Bitcoin ETF from ProShares (AMEX:BITO) generated $1 billion in volume on its first day in October 2021, while the record for the launch of an individual ETF is $2.1 billion. The 11 ETFs reached $2.3 billion in trading volumes at the time of writing.

Other ETFs like those from Ark 21Shares (AMEX:ARKB), Bitwise (AMEX:BITB), Invesco (AMEX:BTCO), VanEck (AMEX:HODL), and Franklin (AMEX:EZBC) also recorded upward movements, with volumes ranging between $10 million and $100 million.

Bitcoin (COIN:BTCUSD), meanwhile, reached a high of $49,102 this morning and fell to $45,932 at the time of writing, in the early afternoon. Fernando Pereira, an analyst at Bitget, commented on the movement of Bitcoin prices: ‘Finally, the requests for ETFs were approved, but Bitcoin barely moved with this news. This, combined with the divergence that the price has been showing (more negative days than positive even with the price rising) shows that the demand is already at the end. Very difficult to pass $50,000 in the short term. The party is ending.’

Bitwise allocates Bitcoin ETF profits to community development

Bitwise Asset Management announced that 10% of the profits from its Bitcoin ETF (AMEX:BITB) will be donated to organizations that support open-source Bitcoin development. CEO Hunter Horsley expressed enthusiasm in funding developers, especially the pioneers of the Bitcoin community. Following the recent SEC approval of 11 Bitcoin ETFs, Bitwise seeks to contribute to the industry’s expansion, with no plans for reimbursement of the donations. The beneficiaries were selected for their track record in supporting Bitcoin development, emphasizing the importance of sustainable support for Bitcoin Core Development.

SEC’s split decision in approving spot Bitcoin ETFs

SEC Chairman Gary Gensler was one of three members of the commission who voted in favor of creating the first spot Bitcoin ETF. Gensler, along with Hester Peirce and Mark Uyeda, approved the registrations, while Caroline Crenshaw and Jaime Liz√°rraga opposed them. Despite Peirce’s support for cryptocurrency, Gensler maintained a critical stance, emphasizing risks and customer protection. According to Crenshaw, the controversial decision could compromise investor protection, marking a significant moment in the regulation of the cryptocurrency market. In related news about the security breach of the SEC’s account on X, the FBI is collaborating in the investigation. The infraction, which occurred on January 9, involved the publication of a false announcement about the approval of spot Bitcoin ETFs, which was quickly debunked by the SEC and its Chairman Gary Gensler. The SEC clarified that the false announcement was not prepared by the agency, dispelling rumors of a premature launch.

Challenges on the way to SEC’s Ether ETF

The Chairman of the US SEC, Gary Gensler, expressed caution about approving an ETF for Ethereum (COIN:ETHUSD), following the launch of the Bitcoin ETF. Despite the rise in ether prices, there are doubts about its classification as a commodity or security, a critical factor in the SEC’s decision. Gensler reiterated that many cryptographic assets are considered investment contracts. Experts are divided on the likelihood of an ether ETF being approved soon, with some optimistic and others skeptical, depending on the SEC’s regulatory approach.

Circle Internet Financial moves towards IPO

Circle Internet Financial, issuer of the stablecoin USDC (COIN:USDCUSD) with a market value above $25 billion, took a significant step towards becoming a public company. The company confidentially submitted a Form S-1 to the US Securities and Exchange Commission, a standard procedure for IPOs. Details such as the number and price of shares are still uncertain, depending on the SEC’s review and market conditions. This initiative follows earlier discussions about an IPO and a failed attempt to go public in 2022, valuing the company at $9 billion.

Aave votes to add PayPal’s stablecoin PYUSD

The DeFi protocol Aave is holding a vote to integrate the PYUSD stablecoin (COIN:PYUSDUSD), issued by PayPal and Paxos Trust Company, into its Ethereum pool. The proposal, with 99.98% of votes in favor, aims to strengthen the synergies between PYUSD and Aave’s stablecoin GHO (COIN:GHOUSD). Trident Digital, which supports PYUSD/USDC liquidity on Curve, plans to contribute up to $10 million in liquidity for PYUSD on Aave. The strategy aims to generate organic loan demand for PYUSD, boosting the Aave ecosystem.

JPMorgan highlights the market and mining impact following the approval of the first spot Bitcoin ETFs

According to JPMorgan Chase (NYSE:JPM), the buying pressure on bitcoin and mining stocks has increased in recent months. JPMorgan analysts Smith and Pearce indicate uncertainty about the future impact of this novelty on bitcoin and mining stocks. They observed that mining stocks have risen 131% in the past three months, outperforming the 71% increase in bitcoin value. However, while they warn of possible sales in the sector, they see buying opportunities, highlighting that the ETF does not directly affect the mining economy. ‘Our feeling is that mining stocks need a break, but we expect the stock performance to follow bitcoin prices in the coming weeks.’ JPMorgan maintains an optimistic view for the year in bitcoin mining, highlighting Iris Energy (NASDAQ:IREN) as a promising choice.

Shares of Coinbase and Robinhood react downwards

Shares of Coinbase Global (NASDAQ:COIN) and Robinhood Markets (NASDAQ:HOOD) suffered declines on Thursday after the approval of Bitcoin ETFs by the US SEC, generating uncertainties about the impact on cryptocurrency trading platforms. Both companies, which had a positive start in the session, fell more than 4% and 2%, respectively, at the time of writing. The approval of the ETFs is seen as a milestone in the cryptographic space, but raises concerns about competitive pressure for these companies. Despite being the custodian of many of these ETFs, analysts at JPMorgan (NYSE:JPM) see a mixed scenario for the company, with potential direct competition to its services. Vlad Tenev, CEO of Robinhood, announced that the investment platform will add spot Bitcoin ETFs as soon as possible. Meanwhile, both Coinbase and Robinhood had an exceptional performance in the previous year, with significant increases in their shares.

Polymarket registers record volume

Polymarket, a decentralized betting platform, recorded an impressive volume of $5.7 million after the US SEC approved Bitcoin ETFs, exceeding its daily average of $300,000 and even the volume of OpenSea. According to analyses by Richard Chen from 1confirmation, Polymarket stood out after the SEC’s decision, with a specific contract on the approval of the Bitcoin ETF attracting more than $12 million in bets. The platform also saw a significant increase in the number of active users, reaching the highest level since April 2022.

South Korea maintains restrictions on cryptocurrency ETFs

The Financial Services Commission of South Korea confirmed that it will continue to restrict the launch of cryptocurrency ETFs by financial institutions. Despite the approval of Bitcoin ETFs in the USA, the South Korean regulator does not plan to review or suspend its ban, citing investor protection and the stability of financial markets. Since 2017, South Korea has not considered cryptocurrencies as financial assets and prohibits institutional investments in them. The nation is working on a two-part cryptocurrency regulation, with the first phase scheduled for July 2024.

Restructuring and growth at NEAR Protocol

The Near Foundation, responsible for the NEAR Protocol (COIN:NEARUSD), announced a 40% reduction in its staff, despite significant development in the past year. This decision, influenced by the NFC, mainly affects the marketing and business development departments, maintaining the engineering team. CEO Illia Polosukhin explained that the change aims to focus on higher-impact activities and promote decentralization. Parallelly, NEAR’s decentralized financial ecosystem showed strong performance, with the total value locked surpassing $100 million and the NEAR token growing 17.25% the previous day.

Vitalik Buterin supports increasing Ethereum’s gas limit

Vitalik Buterin, co-founder of Ethereum (COIN:ETHUSD), advocated for a 33.3% increase in the Ethereum block gas limit, from 30 to 40 million units. This change would allow more transactions per block, improving network efficiency. Buterin notes that the current limit has remained stable for almost three years, while Martin Köppelmann from Gnosis recognizes that such an increase would require more operational resources from nodes. Jesse Pollak from Coinbase also supports the idea, highlighting the potential benefits. Unlike other changes, this adjustment can be made directly by validators adjusting their node settings.

Mantle (MNT) reaches new record

Mantle (COIN:MNTLLUSD) achieved a new all-time high, continuing its upward trend since October 2023. The digital asset broke the previous barrier of $0.53 in December and, after a consolidation phase, initiated another wave of growth, surpassing the $0.80 mark at the time of writing. Analysts like Defi Maestro and KashKysh are optimistic, highlighting the daily transaction volume and the potential of Ethereum ecosystems and layer 2 solutions. Technical analysis suggests a parabolic trajectory for MNT, pointing to a possible rise of 17%, potentially reaching $0.93.

Costly purchasing error in meme coin

A trader, possibly by mistake, spent nearly $9 million in three large transactions to acquire the Solana meme coin WIF. These purchases triggered a temporary price increase to $3 due to low liquidity, followed by a drop to 15 cents. The result was a substantial loss of over $5.7 million for the trader. This event highlights the risks of trading in low liquidity pools and sparked speculation of being a marketing stunt to draw attention to WIF, which had previously been a big success in the Solana ecosystem.

Cookie3 and Chainwire form strategic partnership for Web3 analysis

Cookie3, an analytics platform for Web3 users, announced a collaboration with the press release distribution service Chainwire. This partnership, revealed on January 10th, allows companies to monitor the impact of their press releases on the blockchain. Cookie3 is offering a 10% discount for Chainwire users, which can be accessed with the code ‘campaigns’. The announcement highlights that Cookie3’s clients will have easier access to Chainwire’s PR services and vice versa, with Chainwire providing enhanced user analytics.

CoinGecko faces hacker attack on platform X and issues security alert

CoinGecko, known for tracking cryptocurrency prices, had its account on platform X compromised, resulting in the fraudulent disclosure of a new cryptocurrency, GCKO. Hackers promoted a fake token airdrop through a suspicious link. CoinGecko alerted its users not to interact with the malicious content. The attack occurred due to an accidental click on a fraudulent link by a team member, despite security measures like two-factor authentication. CoinGecko has since regained control of their accounts and apologized for the incident.