On January 19, the United States Securities and Exchange Commission (SEC) made a significant move by acknowledging the proposals submitted by Nasdaq and the Cboe regarding the introduction of options trading for Bitcoin exchange-traded funds (ETFs).
Nasdaq initiated a rule change request to facilitate the listing and trading of options linked to BlackRock’s iShares Bitcoin Trust, while the Cboe applied for permission to trade options linked to “ETPs (exchange-traded products) that Hold Bitcoin.”
Notably, the Cboe had recently launched six out of the ten BTC ETFs that had received SEC approval.
The much-anticipated BTC ETFs commenced trading on both the Nasdaq and Cboe platforms on January 11, just one day after obtaining approval from the SEC.
Catherine Clay, the Executive Vice President of Cboe, disclosed that the exchange was experiencing “good inflows” into the BTC ETFs, which were closely tracking the price of Bitcoin, aligning with expectations.
According to Clay, introducing BTC ETF options trading was the “next logical step” for these products, as it would enhance their utility and provide risk mitigation capabilities.
Nasdaq supported this notion by stating that options would deliver “cost efficiencies and increased hedging strategies.”
Options are financial derivatives that grant the holder the right to buy or sell an asset at a predetermined price and time.
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Analyst Dave Nadig from VettaFi suggested that this move could attract various hedge fund players to the BTC ETF options space who may not have previously ventured into the cryptocurrency ecosystem directly.
Cboe submitted its request for options trading permission just last week, and Clay expressed uncertainty regarding the regulatory approval process, emphasizing that it was challenging to predict the outcome.
Moreover, Cboe’s options clearing corporation had to make corresponding filings with both the SEC and the Commodity Futures Trading Commission, adding an additional layer of complexity to the situation.
James Seyffart, an ETF analyst at Bloomberg, noted the unexpected speed at which Nasdaq had made its announcement, suggesting that approval for options trading could potentially be granted as early as the end of February, or at the latest, around September 21.
These proposals are now open for public comment for a period of 21 days after their publication in the Federal Register, allowing stakeholders and interested parties to provide their input and perspectives on this pivotal development in the cryptocurrency and financial markets.
On the fifth day of trading, issuers of Spot Bitcoin exchange-traded funds (ETFs) made a significant addition to their crypto holdings, accumulating a net total of 10,667 Bitcoins.
The trading activity was accompanied by a surge in trading volumes, indicating growing interest in these investment products.
Data provided by the X (formerly known as Twitter) account CC15Capital for January 17 reveals that a substantial $440 million worth of Bitcoin was added to the ETF holdings by the end of the trading day.
Notably, BlackRock’s ETF led the pack, acquiring 8,700 BTC, which translates to nearly $358 million in value.
The data further demonstrates that nine ETFs, excluding Grayscale, have collectively purchased approximately 68,500 BTC since their launch, currently valued at around $2.8 billion.
However, these recent Bitcoin acquisitions by ETFs were partly offset by ongoing outflows from the Grayscale Bitcoin Trust (GBTC), which saw 10,824 BTC, approximately $445 million, being sold off.
Since its conversion to a spot ETF on January 11, GBTC has witnessed nearly 38,000 BTC exiting its holdings.
Meanwhile, Bloomberg ETF analyst Eric Balchunas shared data indicating that the “Newborn Nine,” a term he coined for the new spot Bitcoin ETFs excluding GBTC, experienced a remarkable 34% surge in daily trading volume on their fifth day of operation.
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Balchunas noted that it’s unusual to see such an increase in volume after a highly anticipated launch.
It’s important to note that data regarding Bitcoin purchases reported by ETF managers are subject to delays due to purchase settlement processes, causing a lag in real-time transaction figures.
Investors have shown strong interest in these new funds, with both BlackRock and Fidelity’s Bitcoin ETFs amassing over $1 billion in assets under management as of the close of trading on January 18, according to Bloomberg ETF analyst James Seyffart.
Balchunas also highlighted that BlackRock and Fidelity’s Bitcoin ETFs rank fourth and fifth in terms of weekly capital inflows among all U.S. ETFs, trailing only the Vanguard 500 Index Fund ETF, which seeks to replicate the returns of the S&P 500 index.
CC15Capital additionally shared that Bitwise is the sole asset manager to disclose its Bitcoin holdings for January 18, revealing an addition of 491 BTC on that day, amounting to over $20 million.
While Bitcoin experienced a slight decrease of less than 1% on January 17, it has seen a more significant decline of over 3.5% in the past 24 hours, as reported by Cointelegraph Markets Pro.
On January 18th, Bitcoin mining company Hut 8 experienced a significant setback as its share price plummeted by over 23%.
This decline occurred on the same day that Hut 8 celebrated its listing on Nasdaq by ringing the opening bell.
Simultaneously, an unverified report started circulating, alleging that insiders were preparing to offload their Hut 8 stock holdings.
Hut’s share price fell sharply, dropping from $9.30 to as low as $7.10 in after-hours trading.
The decline coincided with the release of a report by JCapital Research, an activist short-selling firm, titled “The Coming HUT Pump and Dump.”
This report raised concerns about Hut 8’s recent merger with fellow Bitcoin miner US Bitcoin (USBTC), which took place on November 30, 2023.
JCapital Research, known for its short-side bias, criticized the $725 million merger, claiming that USBTC had a history of legal issues.
They also alleged that a significant portion of the merged company’s shares were held by an undisclosed related party.
According to the report, USBTC had defaulted on a loan and faced government fines for securities violations in its short existence.
Furthermore, JCapital accused USBTC’s CEO, Michael Ho, who had become Hut 8’s chief strategy officer post-merger, of concealing his association with stock promoters known as the Honig Group.
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The Honig Group had faced accusations from the U.S. Securities and Exchange Commission in 2019, including involvement in “classic pump and dump” schemes. Honig had settled these charges and agreed to a ban on trading penny stocks.
The report’s conclusion was grim, suggesting that Hut 8 shareholders might suffer from an over-leveraged pump-and-dump scenario, ultimately holding shares in an inefficient Bitcoin mining company that remained unprofitable even with Bitcoin prices over $60,000.
The credibility of the report came under scrutiny within the crypto community, with some members expressing uncertainty about its authenticity.
This uncertainty triggered panic selling among investors, contributing to the share price decline.
Cointelegraph reached out to JCapital to validate the claims made in their report and also contacted Hut 8 for their response to the allegations.
Notably, the report coincided with the day Hut 8’s CEO, Jaime Leverton, marked the completion of the all-stock merger with USBTC by ringing the opening bell at Nasdaq’s headquarters in New York.
Unlike some other cryptocurrency miners that had to sell portions of their Bitcoin holdings due to challenging market conditions, Hut 8 reported an increase in its self-mined Bitcoin reserves.
In early January, the company revealed that it had mined 453 Bitcoin in December 2023, bringing its total reserves to 9,195 BTC, valued at approximately $377 million at current Bitcoin prices.
Bitcoin’s price is currently in a precarious position, and veteran analyst Filbfilb is warning that the cryptocurrency may have more to lose if a particular price chart pattern unfolds as it typically does.
In his recent update on X (formerly Twitter) on January 19, the founder of the trading suite DecenTrader raised concerns about Bitcoin’s descent to monthly lows.
Overnight, BTC’s price dropped to $40,600, representing a nearly 20% decline from last week’s local highs, according to data from Cointelegraph Markets Pro and TradingView.
While it subsequently bounced back above $41,000, many traders and analysts remain unconvinced of the market’s strength in the short term.
Filbfilb is among those expressing concerns, particularly with regards to the three-day timeframes.
He shared a comparative chart illustrating that when the three-day chart crosses below the daily 50-period simple moving average (DMA), it often leads to further downside.
This chart extends back to Bitcoin’s previous all-time high of $69,000, which was witnessed in November 2021.
Notably, Filbfilb has a history of successfully predicting Bitcoin’s price movements, such as foreseeing the cryptocurrency topping out at $48,000 around the time when the approval of United States-based spot Bitcoin exchange-traded funds (ETFs) was announced.
He has also set a similar price target for Bitcoin in anticipation of April’s block subsidy halving.
In the wake of the overnight dip, BTC/USD dropped below its 2024 opening price. Financial commentator Tedtalksmacro pointed out that $40,000 is the next crucial level that Bitcoin needs to hold.
Additionally, some market participants view the mid-$30,000 range as a potential bounce zone in the near future.
Popular trader Crypto Ed, who is the creator of the trading group CryptoTA, expressed caution, stating, “I think we need 1 more (smaller) leg down before we can bounce.
Last night’s bounce is not convincing me…” This suggests that market sentiment remains cautious, and traders are closely monitoring Bitcoin’s price movements.
In conclusion, Bitcoin is facing a critical juncture, with analysts like Filbfilb warning of potential downside if certain price patterns continue.
Traders are advised to exercise caution and closely watch key support levels as the cryptocurrency market remains volatile.
ProShares, a prominent issuer of exchange-traded funds (ETFs) in the United States, is gearing up to introduce a range of Bitcoin ETFs, offering indirect exposure to Bitcoin as the era of spot Bitcoin ETF trading takes off on domestic stock exchanges.
In a filing submitted to the U.S. Securities and Exchange Commission (SEC) on January 16, ProShares outlined its plans to launch leveraged and inverse Bitcoin ETFs.
These ETFs aim to generate daily returns based on the fluctuations in Bitcoin’s price, which are determined by the daily performance of the Bloomberg Galaxy Bitcoin Index (BGCI).
ProShares has put forth proposals for five distinct Bitcoin ETFs, including the Plus Bitcoin ETF, Ultra Bitcoin ETF, UltraShort Bitcoin ETF, Short Bitcoin ETF, and ShortPlus Bitcoin ETF.
The Plus Bitcoin ETF and Ultra Bitcoin ETF from ProShares aspire to mirror a 1.5x and 2x increase, respectively, in daily BGCI performance.
Conversely, the other three funds, namely ProShares UltraShort Bitcoin ETF, ProShares Short Bitcoin ETF, and ProShares ShortPlus Bitcoin ETF, are designed to reflect daily returns inversely correlated to the BGCI at -2x, -1x, and -1.5x, respectively.
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It’s important to note that these funds do not engage in direct shorting of Bitcoin; instead, ProShares aims to capitalize on price declines in Bitcoin.
At the time of filing, Bitcoin was trading at approximately $43,000, following a notable downturn subsequent to the introduction of spot Bitcoin ETFs in the United States.
Market analysts, such as ARK Invest CEO Cathie Wood, had previously anticipated a short-term sell-off as some investors looked to capitalize on the positive developments.
This announcement comes shortly after the U.S. SEC’s approval of the first batch of 10 spot Bitcoin ETFs on January 10, with trading commencing on January 11. ProShares did not participate in the initial launch of spot Bitcoin ETFs.
Previously, ProShares had been primarily focused on futures-based crypto ETFs, notably introducing one of the first Bitcoin futures-linked ETFs in the U.S. back in October 2021.
Their flagship BTC futures-based product, the Bitcoin Strategy ETF (BITO), has experienced substantial growth over recent months, briefly surpassing $2 billion in assets under management (AUM) for the first time in January 2024.
In addition to BITO, ProShares currently offers a range of ETFs related to cryptocurrency, including the Ether Strategy ETF, Bitcoin & Ether Market Cap Weight Strategy ETF, and the Bitcoin & Ether Equal Weight Strategy ETF.
Bitcoin experienced a dip in its price on January 17, just before Wall Street opened for the day. Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin’s price fell to $42,400 on Bitstamp.
Despite recent volatility, the cryptocurrency has remained within a tight range and struggled to maintain support above $43,000 due to a lack of liquidity.
The negative sentiment surrounding Bitcoin was exacerbated by Jamie Dimon, the CEO of JPMorgan Chase, who criticized the cryptocurrency at the World Economic Forum (WEF) annual gathering in Davos, Switzerland. Dimon referred to Bitcoin as a “pet rock” and dismissed its utility.
He mentioned use cases such as anti-money laundering (AML), fraud prevention, tax avoidance, and combatting sex trafficking but reiterated widely debunked criticisms.
Dimon also announced that he would refrain from discussing Bitcoin in the future, asking others to stop talking about it as well.
This decision marked a change from his previous statements where he had promised to stop mentioning Bitcoin.
When asked about his thoughts on the recent launch of Bitcoin exchange-traded funds (ETFs), Dimon expressed ambivalence about competitors embracing Bitcoin.
He referred to Larry Fink, CEO of BlackRock, whose iShares Bitcoin Trust (IBIT) ETF received over $700 million in inflows within its first three days.
Dimon acknowledged that different people have different opinions, emphasizing the diversity of perspectives in the market.
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Traders in the cryptocurrency market are cautious about Bitcoin’s short-term price performance.
Daan Crypto Trades noted that Bitcoin has become unpredictable, and he preferred to wait for clear opportunities rather than rushing into trades. He stated that the previous ease of trading had disappeared, and the current market environment was more challenging.
Crypto Tony, another trader, predicted that Bitcoin would continue to trade within a range, possibly with a floor in the upper $30,000 area.
He expected Bitcoin to fluctuate between $47,000 and $38,000 in the coming months, with more attention shifting towards alternative cryptocurrencies (Altcoins).
In summary, Bitcoin faced a price dip and struggled to maintain support above $43,000. Jamie Dimon’s critical remarks at the World Economic Forum added to the negative sentiment, and traders were cautious about the cryptocurrency’s short-term performance, with some anticipating a continuation of its range-bound trading.
VanEck, the asset management firm, has decided to shutter and liquidate its Bitcoin Strategy Exchange-Traded Fund (ETF), a move that comes less than two years after its launch.
The decision was officially announced on January 17th, with VanEck’s board of trustees granting approval for the liquidation and dissolution of the ETF, which had been listed on the Cboe BZX Exchange since November 2021.
This strategic move follows VanEck’s recent approval from the United States Securities and Exchange Commission (SEC) to list shares of its spot Bitcoin ETF.
VanEck explained that this decision was the result of a comprehensive evaluation of multiple factors, including performance, liquidity, assets under management, and investor interest.
In a statement, the firm stated, “VanEck continuously monitors and evaluates its ETF offerings across a number of factors, including performance, liquidity, assets under management, and investor interest, among others.”
Shareholders who hold positions in the Bitcoin Strategy ETF will have until January 30th to sell their shares, as the fund’s ticker symbol, XBTF, is set to be delisted on February 6th.
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In a post dated January 17th, VanEck hinted that the decision to discontinue the ETF linked to Bitcoin futures was influenced by the SEC’s green light for spot Bitcoin investment vehicles.
VanEck has also made strides in the cryptocurrency space by launching the VanEck Bitcoin Trust ETF, with the ticker symbol HODL.
This ETF started trading on the Cboe BZX Exchange on January 11th, and it has seen impressive success, with all recently approved spot Bitcoin ETFs collectively amassing approximately $4.5 billion in trading volume on their first day of operation.
A report from CoinShares underlined the increasing popularity of cryptocurrency products in the United States, as it revealed that inflows into U.S. crypto products for the week ending on January 12th surpassed those of Canada, Germany, and Sweden.
This data suggests that despite the discontinuation of the Bitcoin Strategy ETF, the interest and investment in cryptocurrencies remain robust and continue to shape the financial landscape.
In 2022 and 2023, a significant shift occurred in the world of cryptocurrency-related illicit activities as stablecoins eclipsed Bitcoin in terms of transaction volume.
This transformation is highlighted in the latest report by blockchain analytics firm Chainalysis, which reveals that from 2018 to 2021, Bitcoin was the “go-to cryptocurrency” for cybercriminals. However, the years 2022 and 2023 saw stablecoins taking the lead in facilitating illicit transactions.
This transition coincided with the overall surge in stablecoin activity, encompassing both lawful transactions and nefarious ones.
Nonetheless, it’s important to note that Bitcoin remains the preferred choice for certain types of illicit activities, such as darknet market sales and ransomware extortion.
Stablecoins have gained favor among cybercriminals, particularly for activities like fraudulent schemes and transactions involving sanctioned entities.
These activities represent the most substantial portion of crypto-related crimes in terms of transaction volume.
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According to Chainalysis, sanctioned entities and jurisdictions accounted for a combined transaction volume of $14.9 billion in 2023, constituting 61.5% of all illicit transactions during that year.
Chainalysis also points out that a significant portion of this volume stems from crypto services that continue to operate in regions not subject to U.S. sanctions.
This allows them to evade the reach of the United States Department of the Treasury’s Office of Foreign Assets Control.
In another positive development, blockchain security firm CertiK reported on January 4th that crypto hack revenue had decreased by more than 51% in 2023.
This marked a notable improvement in blockchain security, as noted by CertiK’s co-founder, Ronghui Gu.
Chainalysis corroborated these findings in their report, revealing a 54.3% decrease in crypto hack revenue and a 29.2% drop in profits from crypto scams.
Consequently, there has been a decline in transaction volume associated with illicit addresses in 2023.
In summary, the landscape of crypto-related illicit activities shifted dramatically in 2022 and 2023, with stablecoins taking precedence over Bitcoin for most of the illicit transaction volume.
This change is driven by the increased popularity of stablecoins among cybercriminals, particularly for fraudulent schemes and transactions involving sanctioned entities.
Despite these shifts, efforts to enhance blockchain security have yielded positive results, leading to a decline in hack revenue and scam profits, as reported by CertiK and Chainalysis.
Since the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States on January 11, these new investment vehicles have rapidly gained traction, with trading volumes soaring past $10 billion within just three days, as reported by Bloomberg Intelligence analyst James Seyffart.
This meteoric rise in trading activity has sparked debate, with some questioning whether the frenzied trading has had any substantial impact on Bitcoin’s price.
However, Eric Balchunas, another Bloomberg analyst, emphasizes the sheer magnitude of this achievement.
He points out that the $10 billion volume in the first three days dwarfs the performance of 500 ETFs launched throughout 2023, which collectively managed only $450 million in volume during the same period.
The most successful ETF from that batch achieved a mere $45 million in trading volume.
In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) alone recorded more activity than the entire class of ETFs launched in 2023.
Regarding net inflows and outflows, the data shows a trend of investors moving away from the Grayscale Bitcoin Trust (GBTC), which recently transitioned into an ETF format.
Over three days, BlackRock’s IBIT accumulated an impressive $700 million in net gains.
Meanwhile, GBTC experienced net outflows of over $1.1 billion, likely due to investors switching to ETF products with lower fees.
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James Van Straten, a research and data analyst at CryptoSlate, expressed optimism about the ongoing trends:
“GBTC total outflows are now at $1.18 billion vs. spot Bitcoin ETF inflows of $2 billion. It would be extremely encouraging if we continued this pace for the first month of trading.”
CEO Samson Mow anticipates a return to ETF equilibrium in the near future, expecting Grayscale to adjust its fees and alleviate the selling pressure.
While these developments are exciting, the Bitcoin price remains within its well-established trading range since December 2023, hovering around $43,000.
Although some remain confident in the market’s strength at this level, concerns persist regarding Bitcoin’s ability to avoid another significant price decline.
Popular social media trader JT believes that there is still room for further decline, especially when considering the long-standing trading range.
The price has found support around $41,500 in January, repeatedly testing this level since the beginning of 2024, according to data from Cointelegraph Markets Pro and TradingView.
The cryptocurrency community remains watchful, hoping for stability and potential price growth as the ETF market continues to evolve.
More than a year has passed since the notable Terra, FTX, and Celsius collapses in 2022, and the cryptocurrency industry has faced numerous challenges since then.
Industry leaders are now discussing the crucial role of crypto rating agencies in managing risks within the crypto sphere.
In 2022, Ben Goertzel, the CEO of SingularityNET, a decentralized artificial intelligence (AI) firm, argued that rating agencies could play a more significant role in rebuilding trust in crypto than regulators.
As we enter 2024, Goertzel remains skeptical of regulatory efforts aimed at bolstering confidence in the crypto space.
He expressed his lack of faith in regulatory agencies, stating, “Nothing that the world’s regulatory agencies have done since 2022 has increased my faith that they are going to be able in practice to do more good than harm for customers or service providers in the crypto space.”
However, Goertzel believes that transparent, crowdsourced, and intelligently aggregated rating mechanisms could significantly benefit the crypto landscape.
He highlighted the advancements in AI technology, which now make it easier to generate customized summaries of the reputations of various entities in crypto using raw data and reports from diverse sources.
Goertzel also pointed out the United States regulator’s handling of the FTX case as evidence that special laws for crypto fraud may not be necessary.
He argued that existing laws against fraud can effectively be applied to arrest “crypto fraudsters,” similar to individuals involved in other fraudulent activities.
While he doesn’t believe that rating agencies could have prevented the FTX collapse, he suggests that they could have “alerted customers to the numerous red flags observable in advance.”
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Anastasia Ulianova, co-founder of the crypto ratings platform Aria, acknowledges the limitations of rating agencies in preventing collapses like FTX.
Ulianova emphasized that rating agencies can “raise red flags” when the risk associated with a particular crypto exceeds its performance, but they cannot predict collapses.
She stated, “A rating can only tell you how much risk you are taking. It is not a certain prediction of an upcoming collapse.”
Despite these limitations, Ulianova believes that rating agencies can still play a crucial role in helping investors assess the risk-to-reward ratio of tokens.
This information can aid investors in determining whether the expected returns justify the associated risks.
She also emphasized that Aria’s goal as a rating agency is to “legitimize the place of crypto assets in a traditional investment portfolio.”
In summary, crypto rating agencies are being viewed as a valuable tool in the cryptocurrency industry to assess risks and provide investors with information needed to make informed decisions.
While they may not prevent collapses, they can help individuals navigate the complex crypto landscape and make more educated investment choices.