Tesla has Already Made $1 Billion on its $1.5 Billion Bitcoin Investment

Tesla has Already Made $1 Billion on its $1.5 Billion Bitcoin Investment

Equity analyst Dan Ives expects about 5% of public companies to follow the same route as Tesla until more regulatory clarity comes.

The electric car company has doubled its Bitcoin investments in less than two months.

The leading digital currency made another all-time high at about $58,360 on Sunday, appreciating more than 14x in value since the March 2020 low. These gains helped Bitcoin become a trillion-dollar asset.

This week, however, the market is experiencing a sell-off after a 71.5% uptrend this year.

Bitcoin’s rally, before this recent pullback that went into action over the weekend, has racked up Tesla’s profits worth $1 billion, according to estimates by Dan Ives, an equity analyst at Wedbush Securities. Ives wrote in a note published Saturday,

“Based on our calculations, we estimate that Tesla so far has made roughly $1 billion of profit over the last month from its Bitcoin investment given the skyrocketing price of Bitcoin, which now tops a trillion of market value.”

At the time of the announcement in January, when the BTC price was between $30k to $40k, the company didn’t specify when or at what price it bought Bitcoin. But Tesla is ready to make more from its BTC investment than by selling the cars throughout the last year.

The company “is on a trajectory to make more from its Bitcoin investments than profits from selling its EV cars in all of 2020,” he added.

Tesla, whose CEO is Elon Musk, who repeatedly tweets about Bitcoin and cryptos, also announced at the time of Bitcoin investment that it would soon begin to accept the cryptocurrency as payment for its products.

As the Crypto Twitter (CT) has been calling and hoping, the analyst also expects other companies to follow in Tesla’s footsteps. Ives said in the note,

“While the Bitcoin investment is a sideshow for Tesla, it’s clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months.”

However, per him, less than 5% of public companies will take the same route at least until more regulatory clarity comes around.

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Author: AnTy

Elon Musk’s Tesla Used Coinbase OTC Desk to Broker the $1.5 Billion Bitcoin Purchase

Elon Musk’s Tesla Used Coinbase OTC Desk to Broker the $1.5 Billion Bitcoin Purchase

Over the past year, institutional demand has been a blessing to the crypto industry. With more public firms showing interest in digital assets, the market has swollen in size.

However, what many institutions seem to have in common is their port of entry into the crypto market – Coinbase.

Coinbase Wins Another Institutional Client

Coinbase had been behind Tesla’s purchase of $1.5 billion in Bitcoin, which the auto manufacturer announced last week, The‌ ‌Block‌ ‌‌reports. Citing sources familiar with the exchange, the news source confirmed that Coinbase had begun the purchasing spree through its over-the-counter (OTC) trading desk in early February.

The source added to The Block that Coinbase’s brokerage service now counts over five Fortune 500 companies as clients. With the exchange looking to go public later this year, its clientele definitely gives it additional credibility to seek a solid offering.

Did MicroStrategy Have a Hand?

Coinbase has been doing some significant work when it comes to helping institutions improve their exposure to cryptocurrencies. Last year, Coinbase was reported to have facilitated British asset management firm Ruffer Investments with their $750 million Bitcoin purchase, marking the latter’s focus on alternative investments as it looked to hedge against devaluation.

Jonathan Adkins, a company representative, said Ruffer had made the purchase through One River Digital, an offshoot of top volatility hedge fund One River Asset Management. One River eventually contacted Coinbase, which brokered the investment over several days.

The San Francisco-based exchange has also confirmed that it helped business intelligence firm MicroStrategy with its Bitcoin investment. MicroStrategy began purchasing Bitcoin last July, committing $425 million in less than a month. Pumping its brokerage and custody service, Coinbase confirmed in an October blog post that it had indeed been the facilitator of MicroStrategy’s purchase.

MicroStrategy has been on a tear since, raising $650 million in December to facilitate a Bitcoin purchase and buying $10 million more of the asset last month, and raising $1 billion more to buy. It is unclear whether the company went through Coinbase since then.

The move from Tesla isn’t so surprising. Last year, Michael Saylor, MicroStrategy’s chief executive, had offered to “share his playbook” with Tesla CEO Elon Musk when the latter showed openness to purchasing Bitcoin. While any communication between the two, eventually leading to last week’s purchase, seemed to have happened privately.

Coinbase Wants To Go Public

Coinbase is considered one of the most successful crypto exchanges in the world. With five Fortune 500 companies on its list of clientele, the company is also looking to go public later this year. The famous crypto exchange has $90 billion worth of assets in cryptocurrencies alone.

The crypto exchange seems to attract some of the most famous institutional investors looking to make huge crypto bets.

As part of its enormous stake in the crypto industry, the crypto unicorn had $20 billion worth of cryptocurrency assets in custody for its clients as of November 2020.

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Author: Jimmy Aki

NYDIG Sees Institutional Order Books Pushing BTC Holdings to $25B by Year-End

  • NYDIG believes it could grow its AUM to $25 billion as institutions are still hungry for Bitcoin.
  • Increasing institutional demand is growing at impressive levels, giving more hope for Bitcoin’s long-term trajectory.
  • Institutional demand remains a significant point of focus for the crypto market, with more firms expected to enter into the industry soon enough.
  • In line with the phenomenon, the New York Digital Investment Group (NYDIG) expects to quadruple its assets under management this year.

This week, Ross Stevens, the founder and chairman of NYDIG, made an appearance at the MicroStrategy World Conference 2021. In his session, the executive explained that the crypto investment company could be sitting on $25 billion in assets under management (AUM) by year’s end.

Stevens explained that NYDIG’s AUM figures currently stand at about $6 billion. However, the firm has seen enough institutional investors’ commitment to push the figure past the $25 billion mark. Considering that none of the investors have walked back their intention to commit to Bitcoin, the firm expects a windfall going into the year.

NYDIG is a fund management firm that operates as the crypto-facing subsidiary of Stone Ridge Holdings Group LLC. The company provides an avenue for large investors to improve their crypto exposure. Last year, it helped facilitate the purchase of $100 million by MassMutual, the Massachusetts-based insurance giant.

As the Wall Street Journal reported at the time, MassMutual, a company with about $235 billion in AUM, had made the purchase through a backchannel with NYDIG. The insurance giant also purchased a minority stake in NYDIG for $50 million. The deal will also see NYDIG custody MassMutual’s Bitcoin stash. Now that more institutions appear to be lining up to make purchases, NYDIG could be in for its most fruitful year.

Institutional Demand: A MicroStrategy Case Study

Stevens had made the revelation to Michael Saylor, a businessman who has become overly familiar with cryptocurrencies over the past year. Since August 2020, under Saylor, MicroStrategy has purchased over $1.3 billion worth of Bitcoin, becoming one of the industry’s largest institutional players.

The company has benefited immensely from the decision. MicroStrategy built a $425 million Bitcoin holding when the asset was only trading at about $11,000. When the asset eventually grew to $21,000 apiece, the firm announced that it had issued $650 million in convertible senior notes and would use most of the raised capital to purchase more of it.

Now that Bitcoin is in the high $30,000s, it is anyone’s guess just how much MicroStrategy’s decision to move to the Bitcoin standard has grown its reserves.

Along with its bottom line, MicroStrategy’s Bitcoin obsession seems to be helping its stock price. In December, Tyler Radke, an analyst at investment banking giant Citigroup, downgraded MicroStrategy’s stock based on fears that the company was overpricing its Bitcoin play. As the analyst explained, while the company had made a sizable return on its Bitcoin investment, the market appeared to have been overpricing its core business.

However, Bitcoin’s rally in December helped the company’s reserve to balloon even more. While Radke’s criticism of MicsoStartey’s core business has some merit, the market appeared to have overlooked that as its stock surged over 100 percent. The stock, which traded at $286.21 when Radke downgraded it, has now jumped past the $740 mark and is surging on.

The Virginia-based firm is precisely the type of client that NYDIG appears to be looking for. Deep-pocketed and not afraid to take risks, MicroStrategy has become a whale among whales in the Bitcoin market.

Although some could criticize the effects of increasing institutional action on Bitcoin’s liquidity, everyone seems to agree that it would benefit the market in the long run.

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Author: Jimmy Aki

Bakkt to Become a NYSE-Listed Publicly Traded Company with a $2.1 Billion Valuation

Bakkt to Become a NYSE-Listed Publicly Traded Company with a $2.1 Billion Valuation

Renamed Bakkt Holdings, the company appointed new CEO Gavin Michael from Citi bank as it prepares to launch its App in March.

Bitcoin trading platform Bakkt is now becoming a publicly-traded company with a value of $2.1 billion and will be listed on the New York State Exchange with renamed Bakkt Holdings.

Launched during the bear market of 2018 by Intercontinental Exchange (ICE), Bakkt investors will roll their equity into the combined company, with ICE contributing an additional $50 million in capital.

This is made possible through its merger with Victor VPC Impact Acquisition Holdings that completed its initial public offering in September 2020. Together, they aim to grow Bakkt’s “market-leading position in digital assets.”

The company also announced a new CEO, Gavin Michael, former head of technology of Citi’s Global Consumer Bank, as it focuses on the rollout of its consumer application. Meanwhile, interim CEO David Clifton will sit on the Board of Directors.

The new Bakkt App, to be rolled out in March 2021, will allow the users to buy, sell, store, and spend digital assets. Michael said,

“The average consumer holds a wealth of digital assets but rarely tracks their value and lacks the tools to manage and utilize them.”

“I’m excited to join the management team of a company, at this important time in its expansion, whose vision is to bring trust and transparency to digital assets through innovation and technology and, through that process, unlock trillions of dollars currently held in customer and loyalty accounts and allow consumers to put them to work.”

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Author: AnTy

VanEck Files for a Bitcoin ETF Again; This Time It Will Physically Hold BTC

The $49 billion investment firm says the Bitcoin market has matured, pointing to better infrastructure, regulated exchanges, and support from OCC.

So, it has started!

After no new proposal in 2020 following the rejection of all the Bitcoin ETF proposals by the US Securities and Exchange Commission (SEC) in the past couple of years, the market is back to try again.

Now that institutions are pouring in amidst the strong bull market, VanEck is yet again making an attempt at a Bitcoin exchange-traded fund (ETF). The market feels that this time, we could finally get approval.

The big difference in VanEck’s proposal is that unlike the last time when they filed for a Bitcoin futures ETF, this one would physically hold the world’s largest digital asset.

The $49 billion investment firm has already successfully launched a Bitcoin ETN in Europe and is now ready to bring in another herd. Gabor Gurbacs, digital asset strategist at VanEck tweeted,

“Bringing to market a physical Bitcoin ETF in the U.S. is a top priority for @vaneck_us. We are committed to support bitcoin-focused innovation & continue to work with regulators & market participants to achieve that goal.”

In its SEC filing, VanEck argues that the Bitcoin market has matured and is “operating at a level of efficiency and scale similar in material respects to established global equity, fixed income and commodity markets.”

Here, it points to the launch of BTC futures contracts on major and regulated exchanges, growth of trading volume, arrival of major, established market makers, development of a robust bitcoin lending market, and expansion in the availability of institutional-quality custody services.

Moreover, the Office of the Comptroller of the Currency has confirmed that national banks may provide custody services for bitcoin and other virtual currencies, it said.

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Author: AnTy

Cryptocurrency Market Sees $1 Billion USD of Real Capital Flowing Out of Altcoins

Cryptocurrency Market Sees $1 Billion USD of Real Capital Flowing Out of Altcoins

For most of the altcoins, the deep losses have already been reverted in this week of Pump-Dump-Pump.

XRP has taken the entire crypto market down with it.

The cryptocurrency carnage that occurred on late Wednesday night wiped out about $62 billion from the market.

XRP has lost 63.5% of its value since Monday when Ripple CEO Brad Garlinghouse tweeted that SEC is going to sue them for selling unregistered securities in 2013.

XRP/USD went as low as $0.212 before recovering to the $0.263 level.

Still, shorting XRP won’t be as fun here as “Funding rate is absolutely insane. Similar to the funding rate for BTC during the March capitulation. This can short squeeze so hard,” noted trader CryptoSqueeze.

While the world’s largest cryptocurrency, Bitcoin barely felt the effect, as it only dropped to $22,600 and is already back above $23,000, the second-largest cryptocurrency wasn’t this lucky.

ETH went down hard, losing nearly 12% of its value as it crashed to $550, currently working on getting back to the $600 level.

When it comes to the DeFi market, the total value locked (TVL) in the space hasn’t seen much change from last weekend’s ATH of $14 billion, currently standing at $13.3 billion.

As for tokens, SUSHI nuked only to get back to the previous level soon after. Much like SUSHI, several altcoins fell hard. LINK is another example of losing easily 30% of their value only to move back halfway up.

Over the past week, the notable losers include HAKKA (51%), SWRV (35%), CRV (31%), bzrx (28%), COVER (26%), COMP (25%), YFI (18%), AAVE (9%), and UNI (8.40%).

This week, SNX was the outlier as it diverged from the rest of the DeFi world. SNX surged more than 42% in the first three days of the week only to feel the pressure and losing 24% of its value since then.

This altcoin carnage resulted in their collective market capitalization down approximately $31 billion. This amounts to about “$1b USD of real capital flows out of alt-coins using FundStrat estimations of crypto cap change per dollar invested,” noted on-chain analyst Willy Woo.

Altcoins’ loss has been Bitcoin’s gain as its dominance surpassed 70%, to reach a one-year high.

Overall, markets remain in the red going into the weekend ahead of the Christmas celebration.

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Author: AnTy

Bitcoin Buy Signal Flashes; Institutional Investors Focused on Accumulation, Becoming Whales

Today, Bitcoin went as low as $18,700, and the volume remains around $3 billion as Bitcoin struggles to find a direction.

Interestingly, Bitcoin Hash Ribbon gives a buy signal that flashes when the hash rate has recovered (30d MA crosses above 60d MA). BTC price momentum is positive, as per Glassnode data.

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According to HRXO Labs, Bitcoin’s high range is $19,915, above which both BTC and ETH will rally higher, and range low is $16,200 below, which is “death.” But it is the sideways trading around $18,000, where altcoins live.

In the short-term, the leading digital asset is expected to show some weakness as in 4Q20; bitcoin has rallied 80%. Besides the correction to $17,300 last week, we haven’t had any meaningful pullback yet.

But given that this time is different, it is anyone’s guess where BTC will go next.

The good thing about it all is, once we are above $20k, the sky’s the limit with no barriers holding BTC as noted by analyst Ceteris Paribus, “after 20k there’s no resistance to 1m.”

The thing is, “Timing the macro top will be extremely difficult this time, with institutions potentially muting extreme moves. There will still be a lot of retail, but IMO institutions are in charge of the market this time. So macro narratives (e.g., inflation) are important to pay attention to,” said quant trader and entrepreneur Qiao Wang.

It’s an Institutional play

2020 is all about institutions in the bitcoin market. Just yesterday, Grayscale bought yet another 7,188 BTC.

“BTC whales are changing from Bitcoin OGs to inst. Investors,” responded Ki-Young Ju, the CEO of data provider Crypto Quant. This can also be seen in the 1% of BTC’s total supply that moved out of the long-term storage during the November price run-up.

Young Ju is actually bearish in the short term, as we reported, but goes on to say that the Grayscale institutional investors holding BTC on Coinbase Custody are why Bitcoin is currently going sideways rather than having a correction.

Institutional investors have actually accumulated more than 100k BTC, and they aren’t selling.

But despite just over 3% of BTC supply getting scooped off, the number of Bitcoin supply in circulation has remained relatively stable, as per ByteTree.

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Amidst this, the adoption curve of Bitcoin is growing faster than any other global infrastructure rollout before it that involves the Internet, mobile phones, and easily faster than “virtual banking” players like PayPal.

With the network strong and people continuing to buy any dips and adoption surging, it seems to be just a matter of time that Bitcoin price moons. Analyst PlanB, based on his stock-to-flow cross-asset model, said,

“If BTC doesn’t break it’s historical path: BTC market cap will approach gold market value $5-10T in 2021-2024 and approach real estate market value $10-100T in 2024-2028, after 2028 we can no longer interpolate and enter uncharted waters.”

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Author: AnTy

FUD of the Week: China and US Treasury Unsuccessful in Attacking Bitcoin

This week as we reported, China Police seized more than $4.2 billion worth of the crypto asset from the PulsToken Ponzi scheme.

However, it was the officials informing the public, as the crypto market has known all along, about how and where these funds have been moving thanks to the transparency of the blockchain technology.

Researcher Ergo has been updating the community about the sale of these tokens over the years, which peaked in mid-2019. Only about 15k of the BTC are left of the original 201k BTC now.

What is really interesting about China’s latest summary is that the authorities might be the ones involved in the sale of crypto assets all this time.

“Chen Bo, the mastermind of PlusToken (arrested in June 2019), was entrusted with selling PlusToken’s BTC, via a third party business, on behalf of the CCP?” commented ErgoBTC adding, “In return, he only gets 8 years in the gulag for architecting a multi-billion $ Ponzi? What kind of communism is this?”

The good news about this all is the market won’t be getting smashed as most of the Bitcoin has already been dumped into the open market through OKEx and Huobi. It was this sale-off at that time in mid-2019 that sent BTC crashing from $14k to $6k in six months.

There isn’t really anything left to send to China’s national treasury as they already sold most of it all. However, the same can’t be said of ETH and other altcoins, including LTC, EOS, DASH, XRP, DOGE, BCH, and USDT.

“Most importantly, this can be seen as the first government attack toward Bitcoin via liquidity games and price manipulation. IT FAILED,” said market analyst David Puell.

The price of cryptocurrencies had already taken a big drop before this news hit the market, sending BTC to nearly $16,300. Today, the crypto market is actually green.

Besides, over-leverage and BTC already rallying 85% in less than two months being the reason for the crash, Coinbase CEO Brian Armstrong spreading the U.S. Treasury FUD is another one.

While “false, it should be taken seriously,” said Puell.

Regulating self-custodied wallets is already forced upon exchanges in countries like Switzerland, Singapore, and the Netherlands.

While the crypto community continues to oppose these regulations, more rules and laws are expected, which means “privacy and ownership, even more so than price, will be the most contested subjects in Bitcoin in the next few years.”

The implication of this in the US on the price of Bitcoin in the long term, however, isn’t expected to change anything.

“The fundamentals remain the same, so in my view, even if we continue correcting ($14k, 12k, or whatever), the cause would be simply out of major market actors taking profits with the aim to buy cheaper,” Puell said.

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Author: AnTy

World’s 4th Largest Bank Drops the $3B Bond Tradeable Against USD & BTC Amid Fintech Backlash

China’s Construction Bank (CCB) has withdrawn the listing of its $3 billion bond on the Malaysian cryptocurrency exchange. The bonds were to be issued by Longbond Ltd, which was to be created specifically to issue digital bonds.

The bond, which was to be tradable on the FUSANG exchange, a crypto trading platform, had CCB Lauban as its listing sponsor.

The day the bond was to be traded, the Labuan-based exchange received a letter from CCB informing them that the world’s second-largest lender “decided not to proceed” with the issuance. The reason for the suspension wasn’t given, said Henry Chong, chief executive of FUSANG. Fusang said in the statement on Monday,

“The exchange has accepted this decision, and is announcing the suspension of the listing with immediate effect.”

This month, Ant Group met with troubles with its record-breaking IPO, just 48 hours before it was to be listed.

According to South China Morning Post, with China’s central bank rolling out its own digital yuan, “CCB’s digital bonds, which can be bought and traded using US dollars or bitcoin, appear to undermine efforts to safeguard its currency sovereignty.”

SCMP is owned by the Chinese Alibaba Group, founded by Jack Ma, who is also the controlling shareholder of Ant Group. Jacky Zuo, an analyst at Hong Kong-based China Renaissance, said,

“If a retail investor could use bitcoin or other cryptocurrencies to trade such digital bonds backed by a Chinese bank, there may not be a welcoming stance from the policymakers’ perspective.”

“This could be seen as challenging the digital yuan.”

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Author: AnTy

Despite Vampire Attack 2.0 from SushiSwap, Uniswap Volume Holds

The liquidity on DEX Uniswap fell sharply, from $3.3 billion to $1.7 billion, as the UNI liquidity mining regards program ended on Monday.

Simultaneously, SushiSwap started incentivizing the same pools as Uniswap right on the day Uniswap’s subsidy ended. With this, SushiSwap liquidity continues to rise, the total value locked in the project also jumping back above $1 billion.

“This feels like (a smaller) vampire attack 2.0, with the difference that Sushiswap has a more distinguished product now and is not just an exact clone of Uniswap anymore,” said Hasu, an independent researcher adding that the real kicker is that “Sushi token holders already capture 1/6 of every taker fee, or 0.05% of all trading volume.”

With a 240% increase in TVL in just three days, SushiSwap became the 6th largest DeFi project while Uniswap lost its dominance.

From over $3 billion in TVL on Nov. 15, it has declined to $1.3 billion and at the 4th spot. With this, Maker has again taken back its dominant position from Uniswap, as per DeFi Pulse.

SpartanBlack, a partner at the crypto fund, the Spartan Group, tweeted, “Yield farmers have no platform loyalty. They go where the yields are….”

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Still, the volume on the Uniswap platform is strong, the 7-day volume above $1 billion.

Jeff Dorman of Arca also pointed out, “4 Uniswap pools had more liquidity than needed to facilitate trading, & the excess liquidity left once UNI farming ended. This doesn’t affect volumes. TVL is pointless for Uniswap when there is more capital than needed.”

While LPs are critical to the success of Uniswap, incentivizing market makers isn’t the secret to success, he added. “You need customers too, and Uniswap’s customers are much stickier than the LPs. As long as customers show up, LPs will stay,” Dorman said.

According to him, UNI’s latest move just means the excess unproductive capital is gone.

But even Uniswap community members are not giving up, and a governance vote for continuing farming on the same four asset pairs WBTC/ETH, USDC/ETH, USDT/ETH, and DAI/ETH is proposed. The proposal has to pass a series of governance polls before farming restarts on Dec. 4.

Amidst the focus on Bitcoin and its looming retest of an all-time high, a heated battle for LPs by DeFi based venues is emerging. Recently, Bancor also announced a proposal for BNT Liquidity Mining (LM) — aimed at driving new liquidity to Bancor pools & incentivizing long-term liquidity provision.

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Author: AnTy