Despite a notable short interest, MicroStrategy, led by Michael Saylor, continues to witness significant attention from investors, holding $6.9 billion in major short positions as reported by institutions.
As per data from investment research firm Fintel, as of June 6, MicroStrategy features prominently with 18 short positions on Fintel’s “The Big Shorts” list, a compilation of substantial short positions disclosed to the U.S. Securities and Exchange Commission.
The largest of these short positions against MicroStrategy stands at about $2.4 billion, ranking as the 27th-largest net short position among institutions.
This figure is notably less than Amazon’s highest net short position of $3.59 billion, while the largest net short position in the U.S. targets the SPDR S&P 500 Trust ETF, valued at a staggering $114.06 billion.
Despite this backdrop of aggressive short-selling, the sentiment among short-sellers seems to be changing.
The short-interest ratio for MicroStrategy’s stock has halved over the past six months, plummeting from 3.1 days to 1.5 days, indicating a decrease in short-seller interest and reduced risk of a short squeeze.
This ratio measures the average number of days required for short sellers to cover their positions, with a lower figure suggesting waning interest.
Amid these dynamics, MicroStrategy’s stock performance has been robust.
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According to Google Finance, since December 2023, the stock price has surged from $570 to $1,656, effectively tripling in value.
This rally coincides with developments in the cryptocurrency sector, where the launch of spot Bitcoin ETFs in 2024 led investment firm Kerrisdale Capital to speculate on the decreasing necessity of trading MicroStrategy shares as a proxy for Bitcoin exposure.
Kerrisdale Capital highlighted this shift in a March 28 analyst note, stating, “The days when MicroStrategy shares represented a rare, unique way to gain access to Bitcoin are long over.”
This sentiment reflects a broader market adjustment to new financial products that offer direct exposure to Bitcoin, potentially diminishing MicroStrategy’s appeal as an indirect investment option.
Adding to the narrative of success, a recent report by Cointelegraph highlighted that MicroStrategy has substantially outperformed Bitcoin itself over the past year.
The stock has risen by approximately 469%, compared to a 168% increase in Bitcoin’s value, underscoring a period of significant financial growth for the firm amidst a challenging and evolving investment landscape.
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Nayib Bukele, El Salvador’s pro-Bitcoin president, has been inaugurated for a second five-year term following a decisive victory in February’s elections, stirring considerable excitement in the cryptocurrency community.
His administration’s pioneering stance on Bitcoin has been particularly celebrated within the industry.
Crypto commentator Cory Bates expressed his enthusiasm on social media, stating, “Bukele is Proof of Work— Cheers to 5 more years.
“God bless El Salvador.”
Meanwhile, crypto media figure Pete Rizzo reflected on Bukele’s tenure, noting, “Exactly 5 years ago today, Nayib Bukele took the Oath of Office, becoming President of El Salvador.
Ever since, the country has been a world leader – a beacon of freedom, safety, and innovation.
“The 1st Bitcoin President.”
The inauguration was held on June 1 at the National Palace in San Salvador, where President Bukele discussed the significant reduction in crime during his previous term, emphasizing his administration’s aggressive approach to dismantling gang influence.
“In two years we turned around a situation that had been unresolved for more than half a century, with more than 70,000 terrorists controlling the country, and who left more dead than the armed conflict,” Bukele declared.
Bukele’s anti-crime initiatives garnered domestic support, but his international acclaim largely stemmed from his embrace of cryptocurrency.
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In September 2021, El Salvador made history by becoming the first nation to recognize Bitcoin as legal tender, an announcement that initially met with skepticism among Salvadorans, as a Reuters poll in July 2021 suggested that over three-quarters of the population were doubtful of the move.
In the February elections, Bukele’s New Ideas party achieved a significant win, securing 54 of the 60 legislative seats, which strengthened his ability to implement his policies.
Although the official election results were pending, Bukele announced an early victory on February 5, claiming his party had won 58 seats.
Further demonstrating the potential influence of Bukele’s policies, Argentina appears to be considering a similar path towards cryptocurrency integration.
A recent report from May 27 indicated that Argentina’s National Securities Commission (CNV) met with El Salvador’s National Commission of Digital Assets (CNAD) to discuss the adoption and regulation of cryptocurrencies, signaling a possible regional shift towards embracing digital assets.
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Ethereum‘s native token, Ether, has seen a significant increase of approximately 67% in 2024 and might continue to surge in June according to various on-chain, fundamental, and technical indicators.
As of June 1, Ether was observed in the breakout stage of a falling wedge pattern, a bullish reversal setup known for its two converging descending trendlines.
The typical resolution of this pattern occurs when the price surpasses the upper trendline, potentially increasing by the height of the wedge.
On May 20, the price of ETH surged above the upper line of the wedge, accompanied by higher trading volumes, indicating a potential target of about $4,255 by the end of June—an increase of 12.65% from its current price.
Additionally, Ether seems to be forming a bull flag pattern, featuring parallel downward-sloping lines. This pattern suggests a price breakout above the upper trendline, possibly reaching $6,000 by the end of June or early July.
The possibility of Ether reaching $4,000 is further supported by increased holdings among its largest investors.
On-chain data from Santiment shows a 0.5% increase in Ether holdings by accounts possessing between 10 million and 100 million ETH since May 20.
This period coincides with speculation about the SEC reevaluating its stance on Ether ETFs.
READ MORE: Franklin Templeton Fires First Shot in Ether ETF Fee War with 0.19% Sponsor Fee Disclosure
Following the SEC’s approval of spot Ether ETFs on May 23, the ETH/USD price experienced a 19.25% surge.
In contrast, holders of 1 million to 10 million ETH decreased their positions, indicating profit-taking.
Moreover, the overall Ether reserves on crypto exchanges have also diminished, signifying a strong hodling sentiment among investors, which could drive prices further up in June.
Analyst views on Ether are optimistic, particularly after BlackRock updated its SEC filing for the iShares Ethereum Trust (ETHA).
Bloomberg ETF analyst Eric Balchunas commented on May 29, “This is a good sign.
“We’ll probably see the rest roll in soon.”
Balchunas had earlier suggested that Ether ETFs might capture 10-15% of the initial inflows seen by Bitcoin ETFs, which have attracted $13.85 billion since their inception in January.
The successful introduction of Ether ETFs and the expected capital inflows indicate a rising demand for ETH, potentially pushing its price beyond $4,000 in the coming month.
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American multinational investment firm Franklin Templeton has filed an amended S-1 application for its proposed spot Ether exchange-traded fund (ETF) product, becoming the first among the applicants to disclose fees to investors.
“The fees of the Sponsor accrues daily at an annualized rate equal to 0.19% of the net asset value of the Fund,” Franklin Templeton stated in a filing with the United States Securities and Exchange Commission on May 31.
Bloomberg ETF analyst Eric Balchunas highlighted the significance of this move, stating that “the opening shot in the ETH ETF fee war has been fired from Franklin” in an X post on the same day.
He dismissed the notion that the fee might be temporary, asserting that it “looks permanent” as it matches Franklin’s spot Bitcoin ETF product.
Sponsor fees, which compensate the fund manager for administration expenses, are a crucial factor for ETF products as investors generally prefer funds with lower fees.
On the same day, VanEck, Invesco, and Galaxy also submitted amended S-1 applications, but none disclosed their sponsor fees.
This has led to speculation and anticipation in the market regarding their potential fee structures.
Balchunas noted, “Also no fees in any of the new S-1s. Fee war on hold for now,” indicating that the competitive fee adjustments seen with Bitcoin ETFs might not yet be replicated with Ether ETFs.
Prior to the launch of spot Bitcoin ETFs in January, the industry experienced frequent S-1 filing amendments for fee adjustments, a phenomenon Balchunas referred to as the “fee wars.”
Some issuers even waived fees to enhance competitiveness; for instance, Bitwise waived all fees on its spot Bitcoin ETF for the first six months and the first $1 billion in assets.
Grayscale Investments and BlackRock submitted amendments on May 30 and May 29, respectively. Balchunas commented at the time that it was a “Good sign. Probably see rest roll in soon.”
He suggested there might be another round of amendments to “fine-tune” SEC comments, but expressed optimism that spot Ether ETFs could launch by the end of June, calling it a “legit possibility.”
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21Shares has filed an updated application for its Ethereum spot ETF S-1, rebranding the fund from Ark 21Shares Ethereum ETF to 21Shares Core Ethereum ETF.
Additionally, ARK Invest has ended its partnership with 21Shares and will no longer be involved with the ETF.
The newly amended Form S-1 indicates no updated fees.
Despite recognizing Ethereum’s groundbreaking potential and long-term value, an ARK Invest representative confirmed that the firm has decided not to proceed with an Ether ETF, citing a need to reassess its investment strategy.
This decision does not affect the ongoing collaboration between 21Shares and ARK Invest on other projects, such as the ARK 21Shares Bitcoin ETF launched in January.
In their partnership, 21Shares sponsored the ETF, with Delaware Trust Company acting as the trustee. Coinbase Custody Trust Company securely holds the underlying Ether assets, while ARK Investment Management played a supporting role as a sub-adviser responsible for marketing the shares to investors.
Apart from Bitcoin and Ethereum futures, the duo launched another product called the ARK 21Shares Blockchain and Digital Economy Innovation ETF.
This ETF is designed to invest in public equities of companies within the blockchain industry.
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According to 21Shares, this provides investors with what it describes as a “holistic exposure” to the growth of blockchain technology.
ARK Invest and 21Shares revised their spot Ether ETF proposal on May 10, dropping plans to stake a portion of the fund’s assets through third-party providers.
In their Feb. 7 filing, the companies included a clause stating that 21Shares anticipated receiving ETH as a reward for staking and intended to classify the resulting earnings as income generated by the fund.
In September 2023, ARK Invest and 21Shares submitted an application for a spot Ether ETF.
The fund aims to offer direct exposure to Ether and will be traded on the Cboe BZX Exchange, utilizing the CME CF Ether-Dollar Reference Rate – New York Variant.
Last week, the U.S. Securities and Exchange Commission approved 19b-4 forms for eight Ethereum ETFs. Issuers still need their S-1 statements to become effective before trading can begin.
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The United States Treasury Department has published its inaugural finance risk assessment for nonfungible tokens (NFTs), aiming to provide regulators with deeper insights into potential risks and security concerns within the rapidly evolving market.
The report identified several risks, including the possibility of terrorists using NFTs to finance operations, state actors funding nuclear proliferation through NFTs, money laundering, and risks to investors who may face theft, rug-pulls, or other fraud forms that have become well-known.
The report emphasized that most of these illicit activities occur through fiat financing and transactions, rather than being unique to the digital asset space.
“This risk assessment recognizes that most money laundering, terrorist financing, and proliferation financing by volume and value of transactions occurs in fiat currency or otherwise outside the digital asset ecosystem via more traditional methods,” the report stressed.
The Treasury also noted that even in cases of investor or market abuse, digital asset fraud typically happens through long-established schemes, such as Ponzi schemes or exploiting inside information, rather than mechanisms unique to digital assets.
However, fraud has occurred through unique digital asset mechanisms like smart contract manipulation.
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Despite the high potential for abuse and illicit activity via NFTs highlighted in the assessment, the Treasury admitted that there are few, if any, examples of NFTs being used in terrorist financing, nuclear proliferation, or drug trafficking.
A notable example of malicious activity mentioned in the report was the theft of digital assets by North Korea (DPRK) and associated hacker groups aiming to evade U.S. sanctions and generate revenue for military spending.
The Treasury clarified that NFTs represented a small portion of the total digital asset theft, with other financial institutions also targeted by DPRK hackers.
The report concluded with several recommendations to mitigate potential abuse through NFTs.
These include regulating the NFT market, collaborating with industry insiders to prevent fraud, partnering with foreign allies to curb illicit geopolitical activities, and educating consumers about the risks associated with nonfungible tokens and digital assets.
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Robinhood, the popular trading platform, is finalizing a settlement with investors who sued the company for halting the trading of certain meme stocks in 2021, including GameStop.
According to a May 28 filing in a Miami federal court, Robinhood’s lawyers stated that the settlement with the group of investors is nearly complete and is expected to be finalized and dismissed within the next two weeks.
The filing did not provide details of the settlement, and neither Robinhood, its counsel, nor the investors’ counsel responded to requests for comment.
The investors, led by Plaintiff Blue Laine-Beveridge, accused Robinhood of “unlawfully manipulating market prices” and causing “tens of billions of dollars of investors’ equity” losses by selectively restricting the stocks its users could buy between January 28 and February 4, 2021.
The affected stocks included GameStop, AMC, Bed Bath & Beyond, BlackBerry, Nokia, trivago, Koss, Express Inc., and Tootsie Roll.
This lawsuit focused on Robinhood’s alleged violations of securities law and is part of a broader legal action in multiple U.S. jurisdictions regarding the company’s handling of meme stocks.
The settlement follows United States District Judge Cecilia Altonaga’s denial of the investors’ request to file a new motion for class certification on April 19.
A similar request had been denied in November of the previous year.
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Meme stocks, such as GameStop and AMC, are so named because retail investors often trade them based on social media hype.
GameStop’s stock surged dramatically in January 2021 due to a “short squeeze,” causing significant losses for hedge funds and short sellers while some retail traders made substantial gains.
The surge in GameStop’s stock price was largely credited to Keith Gill, known as “Roaring Kitty,” who recently returned to social media platform X in May after a nearly three-year hiatus.
His return and cryptic posts excited traders, pushing GME’s stock to close at $48.75 on May 14, its highest since late 2021, according to Google Finance.
However, GameStop’s stock has since dropped significantly, closing down nearly 11% on May 29 at $21.24, with an additional 2% decline in after-hours trading to $20.78.
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Bitcoin surged above $70,000 on May 21 after intense buying pressure triggered a sharp price increase.
Data from Cointelegraph Markets Pro and TradingView indicated that BTC/USD was striving to maintain its newly regained ground at crucial psychological levels.
Bitcoin’s ascent towards the previous daily close was driven by significant buying liquidity, pushing the market close to $72,000.
This surge dealt a heavy blow to short sellers, with $85 million in BTC shorts liquidated in the 24 hours leading up to the report, according to data from CoinGlass.
Statistician Willy Woo commented on the situation, highlighting that bulls were confronting overhead resistance that had persisted for over a month.
“1 month of Bitcoin short position build up just got liquidated,” he told followers on X. “One more layer to go in order to short squeeze past all-time highs.”
A bold prediction even suggested that Bitcoin could reach $100,000 following a breakout on weekly timeframes.
Popular trader Skew speculated that the United States’ spot Bitcoin exchange-traded funds (ETFs) might have influenced the move, anticipating “important days to come” ahead of the decision on U.S. spot Ether ETFs.
On the same day, ETH/USD traded near $3,700, up 18% in 24 hours and 25% over the week.
Despite the surge in demand, popular trader and commentator Credible Crypto maintained a cautious outlook.
He emphasized that BTC price action was at “major resistance” and was unlikely to overcome it in the near term.
“No change to the plan – we are at major resistance atm with perp premium positive after a month and a half and funding the highest it’s been since – I clearly said these are not the conditions in which a move to the highs is conducive to the next major leg up imo,” he wrote in part of an X discussion.
CoinGlass indicated that $70,630 was the area with the thickest bid liquidity below the spot price at the time of writing.
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Martin Gruenberg, chairman of the United States Federal Deposit Insurance Corporation (FDIC), will step down following a scathing investigation revealing a toxic workplace culture at the agency.
On May 20, Gruenberg announced his intention to resign from his position as chair, a role he has held since August 2005.
He stated in an email to staff, “In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed.
Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”
The FDIC, an independent U.S. government agency, provides insurance for depositors in American commercial and savings banks.
The announcement follows a third-party investigation published on May 7, which uncovered allegations of sexual harassment and other misconduct at the FDIC, as well as the management’s inadequate response to these issues.
On May 15, Gruenberg testified before Congress regarding the widespread allegations of sexual harassment and mistreatment of subordinates.
Both Republicans and Democrats expressed their outrage and disbelief at the severity of the issues within the FDIC, as reported by Reuters.
Lawmakers, including Senate Banking Chair Sherrod Brown, have called for his resignation and urged President Biden to appoint a new FDIC chair.
The White House has confirmed its intention to nominate a successor for the position.
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However, Senator Elizabeth Warren expressed confidence in Gruenberg’s ability to initiate change at the agency.
Gruenberg’s impending resignation has been well-received by the crypto community. Nic Carter, a partner at Castle Island Ventures, celebrated the news, calling it “the best day ever.”
Meanwhile, digital asset industry lawyer John Deaton criticized Warren, saying, “It is shameful how Elizabeth Warren circled the wagons to keep one of her disgraced puppets in place. I’m so looking forward to the debates.”
Gruenberg is believed to have played a key role in Operation Choke Point 2.0, a term coined by Nic Carter in 2023.
This refers to a coordinated effort by the FDIC to discourage banks from holding crypto deposits or providing banking services to crypto firms.
In an October 2022 speech, Gruenberg compared crypto assets to risky financial innovations like subprime mortgages and collateralized debt obligations that contributed to the 2008 financial crisis.
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Bitcoin surged past $70,000 on May 21 following intense buying activity that spiked its price upwards.
Data from Cointelegraph Markets Pro and TradingView revealed that BTC/USD was striving to maintain its newly reclaimed position near critical psychological levels.
Bitcoin’s price spike toward $72,000 was unexpected, driven by significant buy liquidity.
This rapid increase dealt a heavy blow to short sellers, with $85 million in BTC shorts being liquidated in the past 24 hours, according to data from CoinGlass.
Statistician Willy Woo highlighted that bullish investors were confronting overhead resistance that had persisted for over a month.
“1 month of Bitcoin short position build up just got liquidated,” he shared with followers on X. “One more layer to go in order to short squeeze past all-time highs.”
A bold forecast even suggested that Bitcoin could reach $100,000 following a breakout on weekly timeframes.
READ MORE: Bitcoin Eyes New Highs as Analysts Spot Imminent Golden Cross on Lower Timeframes
Popular trader Skew speculated that the U.S. spot Bitcoin exchange-traded funds (ETFs) might have influenced the recent price movements, anticipating “important days to come” ahead of the decision on the U.S. spot.
Meanwhile, Ether (ETH/USD) traded near $3,700, marking an 18% rise in 24 hours and a 25% increase over the week.
Trader Credible Crypto maintained a cautious outlook despite the new demand, advising followers to be conservative.
He emphasized that Bitcoin’s price was facing “major resistance” and was likely to struggle to break through it for now.
“No change to the plan- we are at major resistance atm with perp premium positive after a month and a half and funding the highest its been since- I clearly said these are not the conditions in which a move to the highs is conducive to the next major leg up imo,” he explained in an X discussion.
CoinGlass indicated that the thickest bid liquidity below the spot price was at $70,630 at the time of writing.
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