Category Archives: Bitcoin
BlackRock CEO Larry Fink compares bitcoin to digital gold as ETF … – Morningstar
By Steve Goldstein
BlackRock Chairman and CEO Larry Fink has never been outright dismissive of bitcoin, but he sure sounds more enthusiastic now that his firm, and others, are seeking regulatory approval for a spot bitcoin exchange-traded fund.
"I was skeptical because the early users were -- it was heavily used for, let's say, illicit activities," said Fink in an interview on FOX Business Network that aired Wednesday afternoon.
In 2017, Fink said bitcoin was an "index of money laundering," though his more recent comments have been more positive.
"I think, as it became more accessible -- and, also, I do believe the role of crypto is -- it is digitizing gold in many ways. Instead of investing in gold as a hedge against inflation, a hedge against the onerous problems of any one country or the devaluation of your currency, whatever country you're in."
Fink was asked what a spot bitcoin ETF is meant to accomplish. "Right now, the bid-ask spread for crypto is very expensive. It does erode a lot of the returns that you speak about, because it costs a lot of money right now to transact bitcoin, and it costs a lot of money to get out of that. And so we hope the -- our regulators look at these filings that it's a way to democratize crypto."
Bitcoin has climbed past the $30,000 mark -- up 15% over the last month -- on interest from BlackRock as well as rivals including Fidelity in launching a spot ETF. The Securities and Exchange Commission has yet to approve any of those applications.
Also see:Coinbase stock explodes higher as enthusiasm builds for spot bitcoin ETFs
BlackRock stock (BLK) has slipped 2% this year, underperforming the 16% advance for the S&P 500 .
-Steve Goldstein
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
07-20-23 1728ET
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BlackRock CEO Larry Fink compares bitcoin to digital gold as ETF ... - Morningstar
Bitcoin-related investments outperforming Bitcoin, but remain inferior … – Invezz
Bitcoin has exploded into mainstream consciousness in the last few years. Despite this, for many institutions and other financial players, it can be challenging to own the asset directly, mainly for regulatory and compliance reasons.
This will change in time and is part of the reason that there is so much furore around spot ETF applications, which have been repeatedly denied by the SEC thus far. While purchasing Bitcoin directly and engaging in secure self-custody is not possible for some, there are other ways through which exposure to Bitcoin can be had.
Interestingly, this year has seen many of these mediums outperform Bitcoin. However, that doesnt mean that investing in them is not a mistake if buying the asset itself is also possible.
Some of the most popular Bitcoin-related investments are presented on the below chart. With Bitcoin returning 81% thus far this year, it has been outperformed by all four alternatives.
Or, to present the YTD returns alongside each other:
It should also be noted we have omitted the ProShares Bitcoin Strategy ETF (BITO), which the SEC approved in October 2021. BITO gains exposure to Bitcoin through Bitcoin futures, with the regulator indicating that it believes futures-based products provide stronger investor protections.
However, futures ETFs suffer from having to roll over futures contracts, meaning there is more tracking error. In addition to fees, this as led to BITO underperforming Bitcoin by close to 3% through the first half of this year. If the contango curve steepens in future, that divergence could also grow larger.
In short, there is absolutely no reason to own BITO if one can own Bitcoin, unless the slightly lower returns (which can add up in the long run!) are worth the convenience with regard to avoiding self-custody, or being able to trade it through ones broker account.
Nonetheless, there are far worse options than BITO. Despite the outperformance thus far this year, the Grayscale Bitcoin Trust (GBTC) is one of these. This is a trust rather than an ETF, meaning investors cannot redeem the underlying Bitcoin, causing the trust to trade at a discount or premium to its NAV.
When this fund launched, it originally traded at a premium, but this changed as competing options came online and demand for GBTC fell. The discount dipped as low as 50% in the aftermath of the FTX collapse in November, as questions also arose surrounding its parent company Digital Currency Group, which is also the parent company of crypto platform Genesis, which filed for bankruptcy after getting caught up in the Bankman-Fried storm.
The discount has since narrowed to 25%, as hope rises that the trust is more likely to be converted to an ETF, following the slew of applications lodged with the SEC over the past month. Conversion to an ETF should wipe the majority of the discount out.
Despite the renewed hope of conversion, the fund has been a disaster for all investors. A 25% discount is an enormous chasm especially considering the underlying asset, Bitcoin, is still 55% below its peak from November 2021, adding insult to injury. The fund is even facing a lawsuit from some investors who claim it misrepresented the likelihood it would be converted to an ETF.
Interestingly, if we analyse the correlation of the top Bitcoin-related investments with Bitcoin thus far this year, MicroStrategy comes in at an incredibly high 0.86.
The company now owns over 152,333 Bitcoin, equating to 1 in every 128 Bitcoins currently in circulation, or 0.78%. In essence, this is therefore now a Bitcoin holding company, its mammoth stash helping to explain its strong correlation.
In truth, its also hard to make an argument for MicroStrategy over Bitcoin. Not only are there other factors here (it remains a tech company!) but Michael Saylors borderline religious rants are not exactly what you want to see as a shareholder. Even for Bitcoin fans, not many agreed with his advice to mortgage your house to buy Bitcoin (it was trading at $50,000 at the time, so hopefully not many listened). Its not entirely clear what the long-term vision is, bar simply holding Bitcoin.
The best performing asset this year has been the Valkyrie Bitcoin Miners ETF (WGMI), which has gained 267% compared to Bitcoins 81%. This is in line with what we would expect, as mining stocks have displayed far more volatility than Bitcoin. In short, if Bitcoin rises, mining stocks rise more, and if Bitcoin falls, mining stocks fall more.
Last year, miners got absolutely hammered. Their fall was exacerbated by their refusal to monetise their Bitcoin, which they earn for validating each block of transactions. In the next chart, we can see that their reserves in Bitcoin terms were relatively steady throughout the bull market, however rocketed upwards in USD terms as the price of Bitcoin exploded. It shows that they did not capitalise on the increased prices by selling off their reserves, and instead held onto their Bitcoin.
While one may applaud the conviction, this heightened their exposure to the price and hence kicked up the risk of these companies. More bad news is the ever-rising hash rate while great for the security of Bitcoin and the long-term health of the network, it means miners require greater amounts of energy to receive the same revenue (the difficulty adjustment automatically adjusts to ensure blocks are still mined at pre-determined intervals of approximately ten minutes). With last year also bringing an acute energy crisis, the price of electricity jumped, meaning miners were hit twice as hard with falling revenue on the Bitcoin side and rising costs on the energy side.
Hence, the risk with Bitcoin mining stocks is elevated, and they represent a different investment opportunity than Bitcoin, even if they will always be tied to the latters fate.
This brings us to Coinbase, the final of the investments. Being a crypto exchange in the US, Coinbase has been embroiled in the regulatory crackdown this year. Despite this, it has printed impressive gains for investors, up 186% thus far this year. But with a correlation of only 0.59 over the same timeframe, it clearly is not a good substitute for Bitcoin. Not only that, but even after its rise this year, Coinbase is still nearly three-quarters below its IPO price. With a lawsuit filed by the SEC last month, choppy waters lie ahead.
It is also tempting to wonder what a spot ETF would do for Coinbase. While undeniably positive for the industry as a whole, and hence for Coinbase, would the existence of a spot ETF drive some users away from exchanges? If the regulatory climate around Coinbase is still hazy when that ETF finally gets approved, perhaps it is worth considering. Either way, Coinbase is obviously highly correlated to the price of Bitcoin, but it is a company in itself and hence is a separate investment.
All in all, there is nothing yet that really replicates Bitcoin. While Coinbase and MicroStrategy are companies in their own right and many invest in these for reasons other than simply Bitcoin, as they do with mining stocks, the presence of the Grayscale Trust and the BITO futures ETF highlight why there is demand for a spot ETF.
The BITO futures ETF comes closest to replicating Bitcoins returns, but its underperformance is still notable. It is inevitable that the day of an approved spot ETF will come, and then such underperformance should (mostly) dissipate. But for now, if one wants to gain exposure to Bitcoin and has the ability to access it directly, nothing beats the real thing.
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Bitcoin-related investments outperforming Bitcoin, but remain inferior ... - Invezz
Bitcoin Cools and Drops Below $30,000But XRP, Chainlink Surging – Decrypt
Bitcoin's run may be cooling offthe largest digital asset is now below $30,000 per coinbut a number of altcoins are soaring.
Just weeks ago, the biggest and oldest cryptocurrency soared above $31,000a yearly highthanks to renewed institutional investor interest in the space.
Now it has dropped again, and is trading hands for $29,890, according to CoinGeckoa 1.3% 24-hour drop. It has also dropped 2% in the past seven days.
But other coins and tokens are up significantly.
Flex Coin (FLEX), the native token for crypto exchange CoinFLEX, is one of the best performers, up 20% in the past day, trading for $4.12. It has surged by more than 37% in seven days.
Meanwhile, Ripple's XRP is still on a roll: Last week, a judge ruled that the company behind the cryptocurrency was partly victorious in a long-standing battle with the U.S. Securities and Exchange Commission on whether it sold unregistered securities back in 2020.
Investors obviously interpreted the ruling as positive because XRP is currently trading for $0.75, a 2.4% 24-hour jump. But in the past seven days, it is up nearly 60%.
Chainlink is also up significantly. The 23rd largest digital asset by market cap yesterday launched its Cross-Chain Interoperability Protocol (CCIP) on its Mainnet. Since then, it's jumped over 4% in the past day and 12.4% in the past week.
And Sui, a layer 1 blockchain launched in May 2023, with a native token of the same name, has jumped over 7% in the past day and is trading for $0.74.
Investors have flocked back to crypto after a high-profile Bitcoin spot exchange-traded fund (ETF) application from BlackRock and the launch of a new crypto exchange called EDX Markets backed by major Wall Street players led to renewed confidence in the digital asset space.
Despite Bitcoin being down today, the asset is up significantly since the start of the year when it was trading for less than $17,000 per coin.
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Bitcoin Cools and Drops Below $30,000But XRP, Chainlink Surging - Decrypt
Kota resident loses 2.7 lakh to Bitcoin trading fraud – The Hindu
A 25-year-old man from Kota in Udupi district lost 2.4 lakh to an online bitcoin trading fraud.
In the complaint to Udupi Cyber Economic and Narcotic Crime (CEN) station, the victim said on July 10, he received a message on WhatsApp from a number starting with +27 country code asking whether he was interested in online trading. He then received a link through which he opened the Telegram app. During his chat with one Nita, he was told about bitcoin trading for which he had to do four tasks after transferring certain amount for each task. He was assured of settlement of the amounts with 30% commission.
Deekshit completed all the four tasks and paid 5,000, 20,000, 65,000, and 1.5 lakh. When he sought for settlement of the amount, he was asked to transfer 4 lakh or lose the investment he had made so far. When Deekshit questioned, the perpetrator threatened to close the trading wallet.
Similarly, a businessman and his wife from Kuvettu village in Belthangady lost 18.77 lakh to an online job fraud.
In the complaint to Dakshina Kannada CEN station, the businessman said said his wife received a link on her Telegram app offering a part-time job. On sending her name and contact number, she received a link containing 30 tasks. On completion of the task, she received an amount. Following demand by the perpetrator, the businessman and his wife transferred a total of 18.77 lakh between June 19 and June 27. They failed to get any task from the perpetrator, the businessman said. s
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Kota resident loses 2.7 lakh to Bitcoin trading fraud - The Hindu
Grayscale Bitcoin Trust among ARK’s top ETF performers in Q2 2023 – Cointelegraph
Digital currency investment product, Grayscale Bitcoin Trust (GBTC), was one of the best performers at Cathie Woods ARK Invest in the second quarter of 2023.
According to ARKs latest quarterly ETF report published on July 19, GBTC was one of the top contributors to the success of its ARK Next Generation Internet exchange-traded fund (ARKW) in Q2.
According to the data, GBTC was one of the top five drivers of ARKWs growth of more than 9% in Q2, alongside other top performers like Tesla, Shopify, Unity Software and Draftkings. Ranked in fifth place, Grayscale accounted for 108 basis points at ARKW, while the top asset, Tesla, amounted to 232 basis points, the document notes.
ARKW is one of the leading ETFs operated by ARK in terms of year-to-date gains, up around 50% in the period to June 30. Aiming to capture internet-based products and services, cloud computing, artificial intelligence and e-commerce, ARKW had nearly 20% of assets related to cloud computing and about 19% related to blockchain in Q2.
Although GBTC was a top performer for ARKW in Q2 2023, the asset trails Coinbase in terms of the amount of asset allocation at ARKW. Grayscale accounted for nearly as much as ARKWs holdings of Tesla, or slightly above 7.5%, while Coinbase was the biggest allocated asset, accounting for almost 9%.
Other top assets by allocation include Jack Dorseys crypto-related platform Block, which is ranked fourth, and accounted for 7% of the ARKWs total assets in Q2. Unlike GBTC, Block was among the top five worst performers for ARKW, dragging it down by 30 basis points in Q2.
Related: Grayscale CEO: BlackRock ETF filing a moment of validation for Bitcoin
The latest quarterly report by ARK doesnt include the companys most recent large sales of the Coinbase stock. As Coinbase shares reached above $90 in mid-July, ARK has been actively taking profits, selling nearly one million Coinbase shares in July, worth around $97 million.
Despite selling the stock, ARKs CEO Wood remains bullish on Coinbase, mainly due to Ripples latest legal progress in the long-running action initiated by the United States Securities and Exchange Commission. On July 17, Wood reiterated her bullish stance on Bitcoin (BTC), predicting it willhit $1.5 million per coin one day.
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Grayscale Bitcoin Trust among ARK's top ETF performers in Q2 2023 - Cointelegraph
Altcoins ‘bled’ as Bitcoin gained dominance in Q2: CoinGecko – Cointelegraph
The second quarter of the year has been a solid one for Bitcoins performance as its market dominance gained against altcoins, which bled throughout the quarter, according to CoinGecko.
On July 18, the crypto data aggregator released its industry report for Q2 2023 which noted Bitcoin (BTC) and Ether (ETH) continued to build upon their Q1 gains over Q2.
Meanwhile, Binance Coin (BNB), XRP (XRP) and Cardano (ADA) suffered double-digit losses over that time.
CoinGecko said BNB and ADA saw the largest losses as both were labeled securities in lawsuits against Binance and Coinbase filed by the Securities and Exchange Commission.
Decentralized finance (DeFi) tokens were hit particularly hard during the quarter with Uniswap (UNI), Chainlink (LINK) and Lido (LDO) taking double-digit losses.
The top five metaverse and play-to-earn tokens by market cap including Axie Infinity (AXS), Sandbox (SAND) and Decentraland (MANA) also marked losses of up to 40%.
As a result, Bitcoin dominance increased to a two-year high of just over 52% in late June. However, it dropped back below 50% recently with the altcoin rally driven by Ripples partial court victory.
Additionally, most of the altcoins that made gains following the 80% XRP pump have already lost them, returning markets to the status quo before the courts ruling.
CoinGecko reported the total market cap remained sideways for the quarter, ending where it started the period at $1.2 trillion. It has remained sideways into the third quarter and is still at $1.2 trillion at the time of writing.
The big winner for the period was Bitcoin, which outperformed the rest of the market with its gain of almost 7%, the report noted. However, the average daily trading volume for BTC declined 58.7% from the previous quarter.
Related: Altcoin season anyone? Bitcoin dominance tumbles after XRP victory
After a stellar Q1, Bitcoin still outperforms most major asset classes in Q2, only lagging behind the NASDAQ and S&P500, the report stated.
With most altcoins aside from XRP continuing to retreat at the moment, hopes for an early "altseason" are dwindling as Bitcoin remains the king of crypto.
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Altcoins 'bled' as Bitcoin gained dominance in Q2: CoinGecko - Cointelegraph
Bitcoin miners hedging with recent sell-offs: Bitfinex report – Cointelegraph
Bitcoin (BTC) mining companies are employing derisking strategies by offloading BTC to exchanges, according to a market report from Bitfinex.
The cryptocurrency trading platforms latest newsletter addresses the Bitcoin mining sector at length, highlighting a recent surge in miners selling large volumes of BTC to exchanges. This has led to a corresponding increase in the value of shares in Bitcoin mining companies as institutional interest in BTC picks up in 2023.
The report notes that Poolin has accounted for the highest amount of BTC sold to the market in recent weeks.Bitfinex analysts also note that the Bitcoin mining difficulty recently hit an all-time high, which it labels as an indicator of robustness and miner confidence. The report states:
The report goes on to suggest that miners are hedging positions on derivatives exchanges, with 70,000 BTC in 30-day cumulative volume transferred in the first week of July 2023.
Related:Bitcoin miners raked $184M in fees in Q2, surpassing all of 2022
While miners historically transfer BTC to exchanges using derivatives as a hedge for large spot positions, the report labels the high volumes as uncharacteristic:
Bitfinex also cited data from Glassnode indicating that Poolin has been responsible for a large portion of this activity, with the mining pool offloading BTC to Binance.
The analysts note that several plausible reasons could be behind recent mining behavior. This could include hedging activities in the derivatives market, carrying out over-the-counter orders or transferring funds through exchanges for other reasons.
The increase in mining difficulty also indicates new mining power being added to the Bitcoin network. Analysts suggest that this is seen as a sign of increased network health, as well as increased confidence in the profitability of mining, either by increased BTC prices or improved hardware.
The report also suggests that on-chain Bitcoin movements reflect a transfer of supply from long-term holders to short-term holders. This investor behavior is said to be commonly seen in bull market conditions, as new market traders look for quick profits while long-term holders capitalize on increased prices.
Cointelegraph has reached out to a handful of mining companies and pools to ascertain why Bitcoin outflows from miners have increased over the past month. As recently reported, miners sent over$128 million in revenue to exchanges at the end of June 2023.
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Bitcoin miners hedging with recent sell-offs: Bitfinex report - Cointelegraph
Binance completes integration of Bitcoin Lightning Network – Cointelegraph
Cryptocurrency exchange Binance has completed the integration of the Bitcoin Lightning Network on its platform for BTC withdrawals and deposits.
The development wasconfirmedby Binance in a July 17 blog post, where they noted thatBinance users can now use the layer-2 scaling solution for BTC withdrawals and deposits.
When users now choose to withdraw or deposit Bitcoin, they will now be able to select LIGHTNING as an option. Other options include BNB Smart Chain (BEP-20), Bitcoin, BNB Beacon Chain (BEP2), BTC (SegWit), and Ethereum ERC-20.
Binance first hinted at the integration of the Lightning Network in May after it had to temporarily pause BTC withdrawals due to a flood of pending transactions caused by the recent surge in BTC network gas fees.
The explosion in transaction fees has largely been attributed to the creation of memecoins on Bitcoin in the form of BRC-20 tokens a new token standard on the network.
Binance later confirmed it was working toonboard the Lightning Network on June 20 shortly after users spotted Binance's own Lightning nodes.
Related: What is the Bitcoin Lightning Network, and how does it work?
Binance joins Bitfinex, River Financial, OKX, Kraken and CoinCorner as the other prominent exchanges to have embraced the Lightning Network.
Coinbase CEO Brian Armstrong also signaled his intention to integrate the Bitcoin layer 2 network on Coinbase in April. However, he didn't give a timeline as to when that may happen.
The Lightning Network aims to make Bitcoin transactions faster and cheaper by allowing users to create off-chain transaction channels.
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Binance completes integration of Bitcoin Lightning Network - Cointelegraph
Institutional Investors Flock To Bitcoin: Are We Witnessing A Paradigm Shift? – NewsBTC
The Bitcoin market is experiencing a seismic shift, with recent data revealing fascinating trends that shed light on the evolving dynamics. From a significant decline in Bitcoin inflows to a historic drop in supply on exchanges, coupled with a surge in institutional fund accumulation, these developments highlight a maturing market and changing investor sentiment.
The on-chain analytics service CryptoQuant has today published extremely interesting data on the behavior and cohorts of Bitcoin hodlers via Twitter.
Over the past 612 days, Bitcoin has witnessed an 80% decline in the number of addresses recording inflows, which can be interpreted as selling activity. This decline reaches an even higher figure of 84% when measured from the peak in May 2021. These numbers even surpass the previous record set during the 2017 parabolic top, demonstrating the magnitude of the current trend.
Both narrowly beat the second highest decline in addresses associated with inflows between the 2017 parabolic top into 2018 bear, at 78.5%.
It is important to note that these figures do not account for addresses that have moved to self-custody or differentiate between miner activity and retail investors. This suggests that the decline in addresses associated with inflows may be even more significant than the data implies, potentially indicating a shift towards long-term holding strategies or alternative custodial methods.
In a parallel trend, the overall supply of Bitcoin on exchanges has been steadily shrinking since March 2020, marking a period of consistent decline that had not been witnessed before in Bitcoins history. This decline is not only significant in its duration but also in its depth, as Bitcoin reserves on exchanges have dropped by over 30%. CryptoQuants experts further note:
March 2020 was the highest ever supply recorded on exchanges, and preceded by consistent ten years of supply growth. The 1200 days since, are the first period of consistent decline in Bitcoins history. [] Retail traders and institutions are holding more Bitcoin than ever.
This also indicates a major potential shift from active trading and speculative behavior towards long-term holding strategies.
As the decline in inflows and supply unfolds, another intriguing trend emerges: institutional fund accumulation, as observed by CryptoQuant. Institutional investors, including hedge funds, investment firms, and cryptocurrency private funds, are currently actively increasing their holdings of Bitcoin.
This exponential increase in fund holdings demonstrates a strong interest in acquiring Bitcoin, even at its current price level. Institutional investors often take a more patient and long-term approach compared to short-term traders who closely monitor price fluctuations.
By closely monitoring fund holdings, investors can gain valuable insights into market sentiment and the confidence that institutional investors have in Bitcoin as a long-term asset. And the following chart by CryptoQuant is showing just that, an ultra bullish stance by institutions.
The positive evolution of Bitcoins perception is probably further reinforced by recent developments in the regulatory landscape and the introduction of exchange-traded funds (ETFs). Regulatory frameworks, especially those being implemented by countries in the European Union with MiCA, are beneficial for the institutional Bitcoin adoption.
Moreover, the filings and re-filings of Bitcoin spot ETFs by major financial institutions, including BlackRock and Fidelity, indicate a growing recognition of Bitcoins potential as a legitimate investment. These ETFs provide a more accessible and regulated way for investors to gain exposure to Bitcoin, potentially driving further institutional adoption and market growth.
At press time, the BTC price stood at $30,716, remaining in its range between $29,800 and $31,000.
Featured image from iStock, chart from TradingView.com
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Institutional Investors Flock To Bitcoin: Are We Witnessing A Paradigm Shift? - NewsBTC
Will Bitcoin price face negative effects from Federal Reserves two rate hikes? – FXStreet
Bitcoin (BTC) price continues to move sideways for the eleventh day, confusing short-term traders. Despite the Exchange Traded Fund (ETF) mania, the big crypto continues to remain lull.
Read more: Why approving a Bitcoin ETF might unleash $18 billion in sell-pressure
Unexpectedly, altcoins seem to be enjoying the enhanced interest in crypto due to the ETF hype. Bitcoin Cash has risen a whopping 212% in 10 days, STORJ has climbed 67% in the last two weeks, and many other altcoins have also skyrocketed.
But will this altcoin mania continue? Unlikely, especially if Bitcoin price finds its footing and kickstarts a rally, irrespective of the direction.
Also read: Top 3 altcoins to buy for next alt season: PEPE, OP, BNB
Last year proved that the United States Federal Reserves monetary policy decision does affect Bitcoin and the larger crypto markets. But this connection between the Feds decision, the stock market and the cryptocurrency market seems to have dried up.
However, worsening macroeconomic conditions and erosion of trust in the US banking system has clearly given Bitcoin the upper hand, knocking the aforementioned correlation down. As a result, Bitcoin price has returned year-to-date gains of nearly 85%.
But Fed Chairman Jerome Powell is hinting at two more rate hikes by the end of 2023. If Powell follows through on his commitments, the US Dollar could see a massive rally, causing risk-on assets like the stock markets or Bitcoin to take a hit.
Read more: Fed Chair Jerome Powell expects two more rate hikes in 2023
The effects of these rate hikes on Bitcoin price are usually ephemeral or short-lived. In addition to the rate hikes, if the correlation between BTC and the stock market remains low, Bitcoin price will continue to move depending on supply and demand dynamics, aka capital flow.
From a big-picture perspective, Bitcoin price remains bullish and can scale to highs last seen in late 2021.
Read more: Three reasons why Bitcoins 2023 rally is just starting
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Will Bitcoin price face negative effects from Federal Reserves two rate hikes? - FXStreet