Bitcoin has made a lot of progress in the last couple of years, with the emergence of Layer-2 projects such as Stacks, Rootstock and Merlin Network enhancing its capabilities to support basic smart contract functionality.
Those projects are striving to create a new generation of Bitcoin-native DeFi applications, play-to-earn games and NFTs, but they face a number of challenges in pursuing this dream. Many of these new Bitcoin L2s are unable to interoperate with each other, leading to problems around ecosystem fragmentation.
It’s with these challenges in mind that a new project, which leverages the unique capabilities of the EOS blockchain, has emerged, to streamline the flow of data between Bitcoin and its nascent ecosystem of L2s.
A hybrid consensus mechanism to link Bitcoin’s L2s
That new project presents itself as exSat, and it is building what it describes as a “Docking Layer” for Bitcoin’s ecosystem. It utilizes a revolutionary hybrid consensus mechanism that encompasses the traditional Proof-of-Work, the Proof-of-Stake algorithm used by Ethereum and other chains and the Delegated Proof-of-Stake mechanism pioneered by projects such as Polkadot.
exSat’s plan is to facilitate direct interaction between Bitcoin and its L2s without compromising the inherent security of Bitcoin’s original blockchain.
The exSat architecture relies on a system of both Synchronizers and Validators. The Synchronizers’ role is to supply a bridge between Bitcoin’s blockchain network and exSat (and hence, all of Bitcoin’s L2s), ensuring that data and transactions can be processed quickly and accurately. According to exSat, existing Bitcoin miners will take on this role, with their work secured by Bitcoin’s standard PoW consensus mechanism. For participating, they’ll be rewarded with exSat’s native XSAT tokens for processing each block.
As for the Validators, their job is to verify the data that’s processed by the Synchronizers. This is where the PoS consensus mechanism comes in, as anyone will be able to become a Validator simply by staking both BTC and XSAT tokens. There’s quite a hefty barrier to entry though, as exSat requires a minimum 100 BTC stake to participate, plus another XSAT stake to become eligible for the XSAT rewards.
On-Chain Data Storage and EVM Compatibility
There are few other components to this system, with the most notable one being its Data Consensus Extension Protocol, which makes it possible for exSat to make use of EOS’s blockchain, supporting on-chain data storage with high-speed access for BTC assets such as BTC tokens, Runes, BRC20, BRC217 and Ordinals.
Another element of exSat’s architecture is its decentralized state data indexing platform for Bitcoin-native assets, which is a fundamental ingredient for smart contracts, EVM compatibility and trustless interactions. Finally, exSat has created its very own smart contract platform that leverages its EVM interoperability to enable universal gas fees for Bitcoin assets.
Combined, the various features of exSat’s architecture make it possible for Bitcoin and any L2 network to interoperate seamlessly with one another. At the same time, it supports enhanced smart contract functionality required for the next-generation of Bitcoin-native dApps.
Accelerating Bitcoin’s Transition
What exSat is building sounds ambitious, yet it also appears to be very well thought out, catering to a real need that will only become more acute as Bitcoin’s L2 ecosystem grows.
Those L2 networks have already propelled Bitcoin on an evolutionary path that will transform its utility and, perhaps, ultimately help it compete with and maybe even surpass Ethereum as the world’s number one smart contract chain. exSat can play a pivotal role in accelerating that translition.
Cboe Global Markets has formally requested approval from the United States Securities and Exchange Commission (SEC) for a rule modification that would enable the combination of exchange-traded funds (ETFs) and mutual funds.
In a report by Reuters on April 4, it was disclosed that Cboe submitted a 19b-4 form, seeking permission to introduce an ETF share class to existing mutual funds.
This move aims to establish a multi-share class fund structure, enabling issuers to merge and offer similar mutual funds and ETFs under one investment vehicle.
Todd Sohn, an ETF analyst at Strategas LLC, emphasized to Reuters that if the SEC greenlights Cboe’s proposal, “both the number of ETFs and ETF assets could soar.”
Distinguishing between mutual funds and ETFs, these investment vehicles operate differently, each with its own regulatory framework.
Mutual funds are typically traded at the end of the trading day at a price determined by the fund’s net asset value, computed post-market closure.
Conversely, ETFs trade on exchanges throughout the trading day at market prices akin to stocks, subject to fluctuations at any given moment.
Should the rule alteration be sanctioned, Bitcoin ETF shares might be integrated into a mutual fund’s portfolio, thereby providing exposure to the digital asset.
This prospective system is not without precedent. Vanguard Group has employed a patented investment strategy since 2001, facilitating a distinctive “share class” structure within their ETFs.
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This approach allowed Vanguard to incorporate ETFs as a share class of their existing mutual funds, sharing the same underlying portfolio. Vanguard’s patent on this share class concept lapsed in May 2023.
According to Reuters, eight asset managers, including Dimensional Fund Advisors, Morgan Stanley, and Fidelity, have sought regulatory approval to replicate this model. T. Rowe Price and JPMorgan have also indicated interest in adopting a similar strategy.
Cboe’s application is subject to approval or rejection by the SEC within 240 days. Bloomberg ETF analyst Eric Balchunas observed that the filing provides issuers with an opportunity to prompt the SEC’s response to their applications.
Mordor Intelligence projects that the North American ETF market will surpass $8 trillion in 2024, with a compound annual growth rate of 14% expected to propel it to $15.52 trillion by 2029.
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In a strategic move to address its financial obligations, the insolvent cryptocurrency lending entity Genesis reportedly disposed of roughly 36 million shares in the Grayscale Bitcoin Trust (GBTC), aiming to bolster its Bitcoin holdings to facilitate debt settlements with its creditors.
A Bloomberg article recently highlighted this significant transaction, noting the liquidation of these shares on April 2, which at the time were valued at around $58.50 each.
This disposal came after a notable increase in share value, approximately 50% since Genesis sought approval from a bankruptcy court in the United States to sell the GBTC shares on February 2, when their price stood at $38.50.
The aggregate sales proceeds amounted to $2.1 billion, enabling Genesis to acquire 32,041 Bitcoin at a price point of $65,685 each on the same day.
The firm intends to utilize this Bitcoin cache in its ongoing efforts to repay its creditors.
At the time this information was disclosed, the acquired Bitcoin stash was valued at $2.18 billion.
In light of these developments, Coinbase, a leading cryptocurrency exchange, reassured the market that this substantial sell-off was unlikely to destabilize the broader crypto market.
“Our view is that much of these funds will likely remain within the crypto ecosystem, contributing to a neutral overall effect in the market,” Coinbase remarked.
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They elaborated that the bankruptcy plan’s provisions permitted Genesis to either directly convert the GBTC shares into Bitcoin for creditors or sell the shares and distribute the proceeds in cash.
This move follows assertions from the Digital Currency Group (DCG), which contended that its subsidiary, Genesis, had proposed compensating its customers beyond what they were actually entitled to.
Cointelegraph, on February 6, reported DCG’s statement that Genesis’s proposed plan would result in lenders receiving “hundreds of millions of dollars more than the full amount of their petition date claims.”
Genesis’s strategic financial maneuvering comes after its Chapter 11 bankruptcy filing in January 2023, marking a critical phase in its efforts to stabilize its operations and fulfill its financial commitments to creditors.
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As the crypto community turns its gaze toward the upcoming Bitcoin halving event, many anticipate it to be a pivotal moment for a potential surge in Bitcoin’s price.
Nevertheless, Coinbase, a leading cryptocurrency exchange, suggests that the timing of this event might pose challenges.
In its market commentary report dated April 5, Coinbase emphasized the need for the crypto market to identify a new narrative to sustain price increases across various cryptocurrencies.
The exchange pointed out, “The BTC halving, currently due April 20 or 21, could be a catalyst for higher prices, but it will have to contend with what is typically a weak time of year for crypto markets and other risk assets.”
Historically, the period from June to September has yielded an average monthly return of about 2.7% for Bitcoin since 2011.
This is significantly lower compared to the average return of 19.3% observed in the other eight months of the year, as per data from Brave New Coin.
Furthermore, Coinbase has observed a slowdown in overall crypto volumes, indicating a market in search of a compelling story to drive its next growth phase.
Over the past day, total crypto volumes saw a 33.25% decline, totaling $61.78 billion, based on CoinMarketCap data.
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Despite these challenges, Coinbase sees potential for an influx of new investors into the crypto market, particularly due to Bitcoin’s growing reputation as “digital gold.”
This could foster demand from a new investor demographic, enhancing Bitcoin’s dominance, which stands at 50.6% of the total crypto market capitalization, according to CoinStats.
Coinbase also suggests that future market dips may be more aggressively bought up by investors than in previous cycles, owing to an increased investor base and continued market volatility.
Historically, Bitcoin halving events have been precursors to significant price increases. Following the last halving in May 2020, Bitcoin’s value saw a dramatic rise from $8,787 to nearly $69,000 by November 2021.
In legal developments, Coinbase scored a victory on April 6 when the United States Court of Appeals for the Second Circuit ruled in its favor, stating that the exchange’s secondary sales of cryptocurrencies did not breach the Securities Exchange Act.
The ruling was a significant win for Coinbase, which argued against the applicability of securities regulations to secondary crypto asset sales, despite allegations of selling unregistered securities and violating securities laws.
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The increasing frequency with which Bitcoin attains higher support levels combined with a lack of significant speculation in the derivatives markets implies a slim chance of its price dropping to $50,000 in the near future, says Dylan LeClair, a senior analyst at UTXO Management.
In his analysis dated April 7, LeClair posits that a rise in Bitcoin’s price to the $70,000-$75,000 bracket could exert substantial pressure on short sellers.
LeClair observes, “As we’ve consolidated, an increasing amount of short liquidations are building from 70-75k.”
Data from CoinGlass suggests that a surge to $70,000 could trigger liquidations worth approximately $174.17 million.
Should Bitcoin reach $75,000, it would lead to the liquidation of about $830 million in short positions, indicating a potential price increase of 7.8% from its present $69,344.
This forecast mirrors a similar 7.5% decline on March 15, which resulted in $525.2 million of liquidations.
Despite the possibility of a significant drop in Bitcoin’s price to $50,000 triggering massive liquidations of long positions, LeClair deems such a scenario unlikely given the pattern of higher lows and the current stability of the derivatives market.
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He acknowledges the possibility but considers it improbable, citing Bitcoin’s last fall below $50,000 on February 13 to $49,725, after touching $50,000 the day prior—a milestone not seen since December 2021.
Supporting his analysis, LeClair refers to recent developments like BlackRock’s update to its Bitcoin ETF prospectus on April 5, which now includes five prominent Wall Street firms as new authorized participants, including ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, Goldman Sachs, and UBS Securities.
The crypto community is also closely watching Bitcoin’s price as it approaches the halving event scheduled for April 20, which reduces miner block rewards by 50%.
Historical data indicates a 658% price surge since the 2020 halving. Should trends follow suit, Bitcoin could potentially reach $434,280 by the 2028 halving.
Rekt Capital, a noted crypto trader, optimistically suggests to his 443,000 followers that the market is in the early stages of a bull phase, hinting at substantial room for upward movement in the short term.
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With the Bitcoin “halving” event drawing near, the cryptocurrency community is abuzz with predictions, some even suggesting a surge to the $100,000 mark.
Bitcoin‘s price has recently seen a slight increase, reaching $69,395.
This halving, which is expected to happen this April, will reduce mining rewards by half, from 6.25 to 3.125 bitcoins.
Such events, occurring every four years, aim to limit Bitcoin supply and have historically led to price volatility.
Analysts at Steno Research speculate this occasion might follow a “buy the rumor, sell the news” pattern, similar to what was observed in the 2016 halving.
The anticipation builds as the market awaits to see the effect of reduced supply against the backdrop of stable demand.
Coinbase recently celebrated a legal victory that could enhance investor confidence, potentially influencing Bitcoin’s market performance.
The U.S. Court of Appeals for the Second Circuit ruled that Coinbase’s secondary cryptocurrency sales do not contravene the Securities Exchange Act.
This decision is significant for the cryptocurrency exchange and its users, possibly encouraging more trading activity.
Ethereum also remains a focal point in the digital currency sphere.
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Despite being 20% below its peak, Ethereum leads the decentralized finance (DeFi) sector, commanding over 60% of its market value.
Its recent Denchun update promises enhanced functionality and reduced transaction fees on Layer 2, solidifying its position in the DeFi space.
Such developments not only boost Ethereum’s appeal but may also impact Bitcoin positively by fostering trust in cryptocurrencies.
In a bold move, Genesis acquired $2.1 billion in Bitcoin, trading off 36 million GBTC shares.
This purchase, executed amid a Chapter 11 bankruptcy filing, aims to settle debts and enhance Genesis’s Bitcoin reserves.
Despite potential market concerns, Coinbase anticipates that this influx of capital will remain within the crypto ecosystem, likely pushing Bitcoin’s demand and price upward.
Bitcoin’s technical indicators show a bullish sentiment, with the Relative Strength Index at 61 and the 50-day Exponential Moving Average supporting an optimistic outlook.
The market seems primed for an upward trajectory, provided it stays above a critical support level.
On a lighter note, the crypto world is set to welcome Slothana ($SLOTH), a meme coin leveraging Solana’s blockchain efficiency.
Its presale offers an early investment opportunity in what could be the next meme coin sensation, drawing lessons from previous successes in the space.
This event underscores the diverse and ever-evolving nature of the cryptocurrency market, offering various avenues for investment and speculation.
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In a significant move to address its financial obligations, the bankrupt cryptocurrency lending firm Genesis has converted roughly 36 million shares of the Grayscale Bitcoin Trust (GBTC) into Bitcoin, gearing up to settle its debts with creditors.
This conversion was executed on April 2, with the GBTC shares valued at approximately $58.50 each at the time of liquidation, according to Bloomberg.
This decision comes after the GBTC share price witnessed a substantial 50% increase since Genesis initially received approval from the U.S. bankruptcy court for the share sale back in early February when shares were valued at $38.50.
The liquidation of GBTC shares culminated in a $2.1 billion revenue for Genesis, which it used to purchase 32,041 Bitcoin at $65,685 per Bitcoin on the same day.
This purchase is aimed at fulfilling the firm’s obligations towards its creditors, with the acquired Bitcoin currently valued at around $2.18 billion.
The cryptocurrency community has been closely monitoring this large-scale transaction, concerned about its potential impact on the market.
Coinbase, however, has offered reassurances, suggesting that the move is likely to have a neutral effect on the market as the funds remain within the cryptocurrency ecosystem.
This is part of Genesis’s bankruptcy plan, which permits the firm to either directly convert the GBTC shares into Bitcoin for creditors or sell them and distribute the proceeds.
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This development follows an assertion by the Digital Currency Group that its subsidiary, Genesis, is committed to repaying its customers beyond their due entitlements.
Furthermore, Genesis recently announced a settlement agreement with the SEC, agreeing to a $21 million payment to resolve a civil lawsuit related to its operations, including the temporary suspension of withdrawals from Gemini Earn following the FTX bankruptcy, citing market turmoil and liquidity challenges.
Genesis’s financial troubles became more pronounced after the SEC’s lawsuit led to its bankruptcy filing earlier last year.
Additionally, a recent court ruling has allowed the SEC’s lawsuit against Gemini and Genesis to proceed, dismissing motions by both companies to dismiss the lawsuit, which involves allegations of selling unregistered securities through the Gemini Earn program.
This legal development underscores the ongoing challenges and regulatory scrutiny facing the cryptocurrency industry.
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In the first quarter of 2024, Pantera Capital’s Liquid Token Fund delivered an impressive 66% return, buoyed by strategic investments in various crypto tokens, including the notable Solana (SOL).
A shareholder letter obtained by Bloomberg reveals that the fund’s stellar performance from January through March also benefited from investments in Ribbon Finance (RBN) and Stacks, even as it scaled back on Bitcoin and Ether exposures.
Cosmo Jiang, the portfolio manager, shared with Bloomberg the fund’s strategic shift away from Bitcoin, noting a significant reduction in Bitcoin holdings since the year’s start.
Jiang emphasized the deliberate reduction in Bitcoin exposure, stating, “We’d been pretty heavy in Bitcoin until the start of the year, and I really like each month we’ve decreased that Bitcoin position meaningfully.”
Market data indicates the success of this strategy, with the RBN token surging by 400.43% year-to-date, and SOL’s gains registering at 69.88%.
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These figures markedly outpace Bitcoin’s 62.59% appreciation within the same timeframe.
Founded in November 2017, the Pantera Liquid Token Fund is tailored for accredited investors, offering a portfolio of 10–20 liquid tokens with a focus on decentralized finance (DeFi).
This investment vehicle demands a minimum commitment of $100,000 from its participants.
Pantera Capital, managing assets worth $5.2 billion, is a pioneer in the cryptocurrency investment space.
The firm recently acquired SOL tokens formerly owned by the defunct crypto exchange FTX, investing approximately $250 million for tokens valued at $64 each, which is roughly 60% below their current market value.
The surge in SOL’s price is largely credited to its growing dominance in the blockchain market and the burgeoning popularity of memecoins.
Memecoins like Dogwifhat and Bonk, along with new entrants such as Cat in the Dogs World and Book of Meme, have seen rising interest.
CoinShares reports reveal that institutional investors contributed almost $25 million to SOL-based investment funds in March, further bolstering the token’s value in the market.
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Bitcoin‘s rising appeal as a safe haven asset amid global financial uncertainties is notably highlighted by Cathie Wood, CEO of ARK Invest, in a recent CNBC interview.
Wood articulates the unique dual nature of Bitcoin (BTC) as both a risk-on and risk-off investment, indicating its complex role in the current financial landscape.
The introduction of new exchange-traded funds (ETFs) in the United States has certainly contributed to the growing mainstream acceptance of Bitcoin in 2024.
However, Wood suggests there’s a deeper narrative unfolding beyond the institutional engagement with BTC.
She points out the significant opportunities BTC presents to ordinary citizens worldwide, especially against the backdrop of currency devaluation in various countries.
Wood specifically mentions the severe depreciation of currencies like the Nigerian naira and Egyptian pound against the U.S. dollar, attributing these downturns to deliberate government actions rather than market dynamics.
She interprets this trend as a clear move towards Bitcoin as a “flight to safety” and a protective measure against the erosion of wealth and purchasing power.
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The discussion further delves into how Bitcoin’s appeal has been bolstered by recent financial crises, including the U.S. regional banking crisis last year and the Greek financial crisis in 2013.
Wood views Bitcoin as a form of insurance against the consequences of poor fiscal and monetary policies globally.
Despite ARK’s ETF facing competition from leading asset managers and experiencing unusual net outflows of nearly $90 million recently, Wood’s conviction in Bitcoin remains strong.
These outflows, she suggests, might relate to routine financial operations like quarterly rebalancing, as noted by the trader Daan Crypto Trades on the social platform X.
Furthermore, Wood’s bullish outlook on Bitcoin’s future is underscored by her prediction of a $1 million price tag before 2030, driven by a surge in institutional investment.
She believes that the full potential of the market has yet to be realized, signaling her ongoing support for Bitcoin amidst fluctuating market dynamics and ARK’s recent fund performance challenges.
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Over the past 14 years since Bitcoin’s inception on January 3, 2009, investors have found nearly every day to be profitable, with only six days not yielding returns, according to an analysis.
This remarkable statistic underscores Bitcoin’s success, with 99.92% of all days proving profitable for those holding the digital currency.
Recently, Bitcoin reached a record price of $73,600 in mid-March, a boon for all BTC holders as their investments increased in value.
The cryptocurrency has since stabilized in the $68,000–$70,000 range, showcasing its enduring appeal and resilience against market volatility.
Despite the general profitability, a small fraction of Bitcoin transactions made during specific periods in March are currently at a loss, reflecting the inherent risks and fluctuations in the cryptocurrency market.
These unprofitable transactions account for just 0.16% of the 3,732 tradable days, emphasizing the rarity of loss-making investments in Bitcoin.
The distribution of Bitcoin holdings among wallets offers insights into the investment patterns and financial commitment of the community.
The majority of Bitcoin wallets, 86.28%, contain up to $1,000, demonstrating widespread participation with smaller amounts.
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A smaller percentage of wallets hold higher values, with 13.03% between $1,000 and $10,000 and just 0.69% holding over $100,000, highlighting the varying levels of investment within the Bitcoin ecosystem.
Bitcoin’s resilience through bear markets and its ability to consistently recover enhances not only investor confidence but also the mining community’s prospects.
These dynamics bolster the network’s security and contribute to a vibrant ecosystem.
The anticipation around the fourth Bitcoin halving event, expected on April 20, 2024, is generating excitement and strategic accumulation of BTC by both institutions and private investors, expecting a significant impact on Bitcoin’s value.
Amid these developments, the mining sector is preparing for the post-halving era, which will see mining rewards halved to 3.125 BTC.
Canadian firm Bitfarms, for instance, is investing nearly $240 million in upgrading its mining equipment to stay competitive.
Jeffrey Lucas, CFO of Bitfarms, highlighted the strategic importance of this upgrade, noting it will substantially increase the company’s scale, profitability, and efficiency in the face of halving rewards, positioning Bitfarms favorably within the mining industry.
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