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On the first day of trading, US-listed Bitcoin ETFs reached an impressive volume of $4.6 billion, attracting both bullish and bearish investors who placed $80 million in long and short bets. Investors rushed to purchase these new SEC-approved products, marking a significant milestone for the cryptocurrency industry. However, after the launch, the price of Bitcoin (COIN:BTCUSD) surged to over $49,000, generating bullish sentiment, but it later retreated, falling to $45,700. Bitget analyst Fernando Pereira commented, “After aggressively rejecting $49,000.00, BTC once again showed that supply exceeded demand, even as the price rose. I believe it’s unlikely that the month’s peak will exceed $50,000.00.” This volatility led to the liquidation of $83 million in Bitcoin futures and losses of over $230 million in other futures products, underscoring market instability following the ETF debut.
Today, around 36,000 Bitcoin options contracts are set to expire, with a notional value of approximately $1.68 billion. Ethereum options (COIN:ETHUSD) are also expiring. At the time of writing, Bitcoin and Ethereum are down 6.1% and 1.2%, respectively, at $43,570 and $2,588.
Franklin Templeton (AMEX:EZBC) reduced the fee on its Bitcoin ETF to 0.19%, making it the lowest among the new US ETFs. This 10 basis point reduction surpasses Bitwise, which charges 0.2%. The fund will waive additional fees until it reaches $10 billion in assets under management. Following its launch, Bitcoin ETFs were valued at $4.6 billion, with Franklin Templeton contributing $65 million.
Grayscale began transferring 4,000 BTC ($200 million) to Coinbase Prime (NASDAQ:COIN) on January 12. This move, likely a result of recent ETF sales, indicates significant withdrawals from Grayscale. Unlike traditional ETFs, spot Bitcoin ETFs do not require instant buying and selling of Bitcoin (COIN:BTCUSD). Crucial transactions occur before 2 pm New York time, and the actual transfer of Bitcoin takes place on T+1 or T+2. These activities can impact Bitcoin’s price. Grayscale (AMEX:GBTC), known for its high fees, faces competition from new ETFs with lower costs. The SEC has directed new Bitcoin ETFs to use cash redemptions, diverging from stock and commodity funds that typically employ in-kind redemptions. This decision mainly affects institutional transactions and can influence market efficiency. While it does not alter tax treatment for investors, it raises questions about trading costs and market liquidity. SEC rules mandate that the creation and redemption of shares should not be done in Bitcoin, potentially affecting Bitcoin’s liquidity and price during weekends and holidays.
Larry Fink, CEO of BlackRock (NYSE:BLK), endorsed the idea of an Ethereum ETF following the launch of the Bitcoin ETF, highlighting tokenization as the future of the sector. In an interview with CNBC, Fink emphasized the potential value of an Ethereum ETF, seeing it as a step towards tokenization, which he believes is the future of the financial industry. BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) contributed approximately $1 billion to the ETFs’ total $4.6 billion volume. Fink views cryptocurrencies not as currencies but as valuable asset classes, comparing Bitcoin to gold and highlighting its role as a hedge against geopolitical risks. He also mentioned the benefits of tokenization in mitigating money laundering and corruption and considers Bitcoin’s limited supply a unique aspect compared to gold.
Cathie Wood’s Ark Invest liquidated $4.4 million worth of Coinbase shares and $4.3 million worth of Robinhood shares as both companies’ shares fell at market close. The ARK Innovation ETF (AMEX:ARKK) sold 26,301 Coinbase shares and 341,592 Robinhood shares, while the ARK Next Generation Internet (AMEX:ARKW) sold 4,980 and 23,838 shares, respectively. The sale occurred amid the launch of spot Bitcoin ETFs in the US, with Coinbase and Robinhood offering related services. Coinbase (NASDAQ:COIN) and Robinhood (NASDAQ:HOOD) shares closed Thursday’s trading session with declines of 6.7% and 3.5%, respectively, with continued declines in today’s negotiations.
European asset manager CoinShares has acquired the cryptocurrency ETF division of Valkyrie (NASDAQ:BRRR), expanding its presence in the US. CoinShares aims to strengthen its global position with the addition of Valkyrie ETFs to its portfolio, adding around $110 million to its $4.5 billion in assets under management. The transaction is pending legal agreements and board approval.
Swiss bank UBS (NYSE:UBS) will allow some clients to trade Bitcoin ETFs, but under restricted conditions. The rules include bans on bank solicitation and restrictions for accounts with low risk tolerance. Meanwhile, Citigroup (NYSE:C) offers access to Bitcoin ETFs to institutional clients and evaluates options for individual clients. The debut of Bitcoin ETFs generated significant interest, with substantial trading on the first day, despite some banks, such as Vanguard, refusing to offer them.
Vanguard, a giant in the asset management market, reaffirmed that it will not offer Bitcoin ETFs on its platform. The company stated that cryptocurrency products do not align with Vanguard’s focus on traditional asset classes like stocks and bonds. Vanguard maintains its conservative, low-cost approach inherited from its founder Jack Bogle.
Ripple Labs (COIN:XRPUSD) is repurchasing $285 million worth of company stock from early investors and employees. The buyback, valuing the company at $11.3 billion, limits share sales to 6% per investor. Confirmed by Ripple on Wednesday, the move is part of a larger $500 million buyback plan to cover share conversion costs and taxes, according to Reuters. CEO Brad Garlinghouse revealed that Ripple holds more than $1 billion in cash and $25 billion in cryptocurrencies, and the company does not plan to go public soon due to regulatory uncertainty.
Additionally, the US Securities and Exchange Commission (SEC) is pressuring Ripple Labs to provide 2022 and 2023 financial statements, as well as institutional sales contracts for XRP, in the context of an ongoing legal case. The SEC seeks to clarify the proceeds Ripple made from these sales following the initial complaint. This request aims to assist Judge Torres in deciding on precautionary measures and possible civil sanctions. The legal dispute between the SEC and Ripple, which began in December 2020, was largely resolved by October 2023.
The BSV Blockchain is ready to compete with payment giants like Visa (NYSE:V) and Mastercard (NYSE:MA), with the Teranode development team announcing significant improvements in network efficiency and speed. The updates will allow BSV to process one million transactions per second, thanks to new features such as modularized functions and transaction segmentation into subtrees. This evolution of BSV, designed to follow the original principles of Bitcoin (COIN:BTCUSD), puts the network in a unique position to transform the digital economy.
Telcoin quickly restored user balances following an exploit that resulted in the loss of $1.2 million. CEO Paul Neuner is proud of the team’s efficiency in recovering funds from the company’s treasury by fixing the flaw in the interaction between the Telcoin digital wallet and a proxy contract on Polygon. After the restoration, Telcoin saw a significant increase in deposits, demonstrating users’ renewed confidence in the platform.
Genesis Global Trading, a subsidiary of Digital Currency Group, agreed to pay $8 million to the state of New York following violations of financial regulations. The agreement with the New York Department of Financial Services includes the suspension of operations in the state and the waiver of the BitLicense. The company has been criticized for failures to maintain effective compliance programs, exposing it to money laundering risks and cyber vulnerabilities.
Terraform Labs co-founder Do Kwon has requested a postponement of his trial by the SEC until mid-March, pending his extradition from Montenegro. Kwon’s legal team informed Judge Rakoff of the delay caused by the pending extradition, seeking to allow Kwon to be present at the trial. He faces multiple charges, including fraud and securities law violations, with uncertainty over his final extradition destination between the US and South Korea.
Data from BlockchainGamer.biz shows that of the 1,318 blockchain games released since 2021, more than 30% have been abandoned or discontinued. Of the remaining 911 games, 334 are active, and 577 are in development. Top reasons for abandonment include funding challenges, volatile market conditions, and inexperienced teams. Many projects have ceased operations without warning, with Binance BNB Chain leading in abandoned projects, followed by Polygon.
DappRadar revealed significant growth in the NFTs market in 2023, driven by positive variations in the cryptocurrency market. The report highlighted a 166% increase in the number of new wallets trading NFTs. Despite a 49% reduction in trading volume to $12.6 billion, the number of NFTs sold soared by 445%. The entry of major brands into the NFT space, such as Samsung and Nike (NYSE:NKE), and Blur’s leadership in trading volume are indicative of the growing mainstream adoption of NFTs. DappRadar also approved 2,985 new dApps in 2023, with a focus on NFTs and games, signaling a continued growth trend in the sector.
Sotheby’s has opened an auction specializing in Bitcoin Ordinals, called “Natively Digital: An Ordinals Curated Sale.” The event includes 19 exclusive pieces, such as rare Satoshis and works by artist Shroomtoshi, a pioneer in Bitcoin Ordinals. Following the success of the first Bitcoin Ordinals auction in December, which raised $450,850, Sotheby’s continues to explore this new arena for artists and collectors, highlighting the fusion of digital art and cryptoculture. The auction closes on January 22nd.
Hut 8 Mining (NASDAQ:HUT), a Bitcoin mining company, increased its line of credit to $65 million through an agreement with Coinbase (NASDAQ:COIN), its US partner. This new $15 million loan, added to the pre-existing $50 million credit, will be used for general corporate purposes. The loan is secured by Bitcoin (COIN:BTCUSD) and has the same interest rate as the previous agreement. Additionally, Hut 8 received authorization to acquire four natural gas plants in Ontario, Canada. This acquisition, which includes a Bitcoin mining operation, is part of a new financing agreement with Macquarie, where Hut 8 retains an 80% equity stake. This transaction is expected to close on February 15th.
The outflow of Bitcoin miners (COIN:BTCUSD) reached record levels, with the transfer of more than $1 billion in BTC to exchanges, according to CryptoQuant. The majority came from F2Pool, with rising costs and the need to update equipment as the main reasons. This move, which could historically impact the price of Bitcoin, comes during the introduction of the first Bitcoin ETFs in the US, but analysts do not see it as a negative sign.
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