Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Emerging reports have revealed that the cybercriminals that attacked the US fuel pipeline, Colonial Pipeline Co, were paid $5 million in cryptocurrency.

According to Bloomberg, sources familiar with the situation confirmed the extortion fee was paid to enable them to resume fuel shipments.

Colonial Pipeline Attack Associated With DarkSide

The hefty ransom fee was reportedly paid within hours of the attack due to the mounting pressure on the pipeline operator to get gasoline and jet fuel flowing again across cities.

This is contrary to earlier reports asserting that Colonial Pipeline was refusing to negotiate with the attackers.

The FBI had earlier confirmed that the hackers were part of a Russia-linked DarkSide group specializing in digital extortion.

The Georgia-based Colonial ransomware attack crippled gas delivery systems in Southeastern states. Half of the gas stations in North Carolina, Virginia, Georgia, and South Carolina were reported empty.

The cybergang had reportedly demanded that the ransom be paid with a privacy coin like Monero (XMR).

However, the ransom payment goes against the advice of the Federal Bureau of Investigation (FBI). The government agency has repeatedly discouraged American ransomware victims from paying hackers. According to them, payment isn’t guaranteed to work and could incentivize cyber crimes.

Crypto Surge Propelling Ransomware Attacks

Ransomware refers to a category of malicious computer programs that force users into paying a ransom fee before they can access their data. The hackers involved in this type of cybercrime lock up victim’s files and demand ransom or payment for them to unlock it.

According to data from the blockchain analytics firm Chainalysis, crypto payments via ransomware attacks rose in 2020.

In its annual Crypto Crime Report released in January, Chainalysis said the amount paid by victims increased by 311% in 2020, reaching about $350 million in cryptocurrency. The average ransom paid by organizations in 2020 was $312,493, as stated in the report.

The vast majority of criminal crypto payments included in the report had to do with darknet markets and the general category of scams. A major reason for the increase in ransomware-connected payments during 2020 was coronavirus work-from-home measures, which opened up new vulnerabilities for many organizations.

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Author: Jimmy Aki

Cboe Files for Investment Giant Fidelity’s Bitcoin ETF

Cboe says concerns about potential manipulation of a Bitcoin ETF have been “sufficiently mitigated” as it acknowledges that it will be listing and trading shares of the Wise Origin’s product.

Cboe BZX Exchange has filed a 19b-4 form with the Securities and Exchange Commission (SEC) acknowledging that it will be listing and trading shares of the Wise Origin’s Bitcoin exchange-traded product, saying concerns about potential manipulation of a Bitcoin ETF have been “sufficiently mitigated.”

With this move, it has kicked off the process to the SEC.

Wise Origin, a fund affiliated with Fidelity Investments, first filed the application for its Bitcoin ETF in March. However, for the SEC to consider it, they need an exchange partner to file a corresponding 19b-4 form, which Cboe did on Monday.

Now, it’s the agency’s turn to make a move within 45 days to make a decision on the ETF application. Typically, SEC has taken the full 240 days to evaluate a bitcoin ETF application and has rejected every single one of them so far.

With the appointment of new SEC Chairman Gary Gensler, who is expected to be more crypto-friendly than his predecessor Jay Clayton, along with the matured market, there is a higher expectation for a crypto ETF to be finally approved this year.

Last week, Gensler told Congress that the crypto market “could benefit from greater investor protection.”

Bitcoin market participants claim that such a product would bring in a horde of new investors, including those who either can’t invest in the cryptocurrency directly or who are only able to invest in regulated investment vehicles.

Already, VanEck’s Bitcoin ETF application is undergoing the SEC review, a decision on which was postponed by the agency for June. VanEck, along with WisdomTree and Kryptcoin, have also filed with Cboe exchange. Another company is Valkyrie which is working with NYSE Arca for its Bitcoin ETF.

Last week, VanEck also filed for an Ether ETF, which along with other Bitcoin ETF applications from SkyBridge, NYDIG, and Galaxy Digital, have filed the requisite 19b-4 forms.

Amidst this, Ninepoint Partners LP, which has $6.5 billion in assets under management, is dedicating a portion of its crypto ETFs management fee to offset the fund’s carbon footprint. Alex Tapscott, managing director of digital assets at the Toronto-based firm said,

“For some investors who are concerned about the carbon footprint of mining, they may be wary of investing in a Bitcoin ETF.”

“What we’re doing is creating what we hope is a solution to that problem and giving them the choice that they want and, frankly, that they need.”

Ninepoint is partnering with CarbonX to purchase carbon credits and support forest conservation projects. The company’s Bitcoin ETF was converted from a trust on May 6 and had roughly $320 million in assets at the time.

Alan Howard-backed One River Asset Management is another company that is building carbon neutrality into its existing Bitcoin and Ether funds and planning to seek regulatory approval for an ETF with the same features.

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Author: AnTy

1.5B New DAI Minted in The Past Month, Maker Now Earning $400k per day in Revenue

1.5 Billion New DAI Minted in The Past Month, Maker Now Earning $400k per day in Revenue

Stablecoins have been ruling the crypto world since last year.

The total stablecoin supply is ready to hit $90 billion, up from $28 billion at the beginning of this year and $5.87 billion in January 2020.

Tether (USDT) remains the dominant stablecoin at over $56 billion market cap, followed by USDC at $16 billion, BUSD at $8 billion, and DAI at about $4.7 billion.

DAI is a fully collateralized stablecoin native to Maker’s decentralized autonomous organization (DAO), whose supply has gone vertical this year, adding almost 4.5 billion to its supply after starting the year around a $1.1 billion market cap.

The surge in DAI supply first started in July 2020, around the time the DeFi mania took flight when it was just at $130 million. Now, in less than a fortnight, DAI has minted $1 billion.

Interestingly, Maker is earning 4% APY on every dollar of DAI in circulation right now.

Maker, the original DeFi protocol itself, is one of the most profitable decentralized finance projects whose revenue is increasing on a constant basis.

At the beginning of the year, Maker was earning just over $52k per day, and by the end of the same month, it had hit the $100k mark, which after constant increments is now earning almost $463k in revenue daily.

Maker (MKR) has been earning $400k in revenue per day since April 28th.

This has the monthly revenue of Maker hitting $10.45 million in April, up from $2.55 million in January, an increase of 310% YTD. Already, so far in May, the project has generated $3.55 million in revenue.

Popular DEX Uniswap (UNI) is leading with its $113 million revenue, followed by Compound (COMP) by $46 million last month. Both Sushiswap (SUSHI) and Aave (AAVE) also made it to the top DeFi earners list with $35 million and $24 million respectively.

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Author: AnTy

Georgia’s Apex Bank Considers CBDC, Calls For Partnerships

Central bank digital currencies (CBDCs) have become the rave of the moment following the global outcry for a more efficient and inclusive financial system.

With the economic impact of the pandemic, the need for a digital form of value transmission has never been higher than now. National banks are rapidly rolling out CBDC programs to address this growing demand.

The latest in a long list of apex banks is the National Bank of Georgia.

Digital Gel On The Horizon

In a release posted on its website, the National Bank of Georgia (NBG) said it would be commencing a central bank digital currency (CBDC) program joining a list of national banks in the process.

According to the apex bank, this enhances the domestic payment system efficiencies and promotes financial inclusion for the underbanked in the country. To help it on this journey, the NBG said it would be accepting participants from the private sector.

In what is termed as a public-private partnership (PPP), it said private technology firms, fintech companies, and other interested financial institutions are welcome to aid in creating a “digital GEL,” named after the country’s official currency, the Georgian Lari.

However, the apex bank warns that despite its crypto efforts, its first mandate to maintain price and financial stability in Georgia remains. The official announcement says,

“CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society. The introduction of CBDC could increase financial intermediation efficiency, help introduce new financial technologies, facilitate financial inclusion, and reach previously unbanked populations. It could also increase monetary policy efficiency by improving monetary policy’s monetary transmission mechanism and welfare effects for the society.”

The former Soviet region financial regulator said that it would be adopting the Bank for International Settlements’ (BIS) 2020 guiding principles in creating a Digital GEL wherein a set of rules for a successful CBDC program was listed.

Also, it noted that there were inherent risks attributed to CBDCs given the fact that it is a completely new and potentially disruptive technology. To ensure sound risk management, it would be creating a regulatory sandbox for potential partners to test the CBDC deployment in a controlled environment. This will see it use its Open Regulatory Framework tools to measure the economic impact of a possible CBDC use.

Meanwhile, no launch date has been chosen, and the project is still in the works.

Georgia’s Impressive Crypto Resume

Given its small population size of just 3.7 million people scattered across its Mountain Villages, Georgia is one of the smaller economies looking to join the CBDC frenzy.

But this does not make it negligible, given that the Georgian state has been active in the crypto space as far back as 2017.

In a move that saw it become the first national government to allow land authentication with blockchain, the Georgian state signed an agreement with BitFury to use the Bitcoin network to record land titles.

It also became the powerhouse of European crypto mining after hosting the world’s third-largest crypto mining operation. It also went further and concluded a deal with Cardano’s parent company IOHK in 2019 to aid in public sector administration, especially in education.

These decisive steps have since brought the Georgian state into the global blockchain community. They have since made former Prime Minister Mamuka Bakhtadze remarked that blockchain could do what the steam engine did for the first industrial revolution in an interview with Cointelegraph. According to Bakhtadze, blockchain could become the catalyst for the fourth industrial revolution.

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Author: Jimmy Aki

Bitcoin Propels PayPal’s Massive Growth In Q1

Bitcoin Propels PayPal’s Massive Growth In Q1

Bitcoin and the general crypto market have surged largely due to an influx of institutional investors. Those who have put faith in the “digital gold” are currently smiling all the way to the bank.

The first tech company to espouse crypto’s remarkable returns in their Q1 earnings call was electric car manufacturer Tesla Inc. According to a Wednesday announcement, US payment giant PayPal Holdings has also revealed the impact Bitcoin had on its growth.

PayPal’s Crypto Support Pays Off

In its just-concluded Q1 investors’ earning call, payment giant PayPal had remarkable gains with a little help from crypto.

The Q1 earnings report showed a total payment volume (TPV) of $285 billion, up from $277 billion in Q4 holiday season sales.

PayPal also posted a net revenue north of $6 billion and earnings per share of $1.22 against analysts’ estimated $1.01 for Q1, 2021.

Alongside this growth, PayPal said it added 14.5 million net new accounts (NNAs), raising its already vast global reach to 392 million with 31 million merchants onboarded so far.

Following the Wednesday earnings call, its shares rose 5% and traded at $260 per share.

President and CEO Dan Schulman describe the results as the strongest first-quarter result in PayPal’s history. According to Schulman, their crypto payments adoption played a huge role in attaining these results.

According to Schuman, more than half of its current users opened the PayPal app more than twice a day following the crypto payment support functionality.

Schulman believes that crypto and central bank digital currencies (CBDCs) would eventually foster a more equitable financial system given their growing adoption.

PayPal’s immense success in Q1, expected to be slow in business, has been largely due to its crypto payments support. The payment giant enabled crypto trading services last year— opening the gates to customers and merchants on its platform to interact with digital assets.

To further cement its place in the newly emerging digital economy, it extended this capability to its peer-to-peer payment app Venmo. It enabled customers to make crypto payments in a trustless manner.

PayPal is committed to a crypto future following the acquisition of crypto-security firm Curv.

PayPal Aiming To Incorporate CBDCs Once Launched

According to Schulman, they are currently in talks with world governments concerning their CBDC program. Schulman said this is to make sure the payment company is not left out when these countries eventually roll out their digital currencies.

It’s finally becoming an arms race for countries piloting CBDC programs as a more efficient payment system. Many national banks have announced intents to launch a CBDC program, with the Republic of Georgia being the latest in a keenly contested race. China, which is the furthest in the rollout of a digital yuan, has served as a catalyst, and more countries are rapidly joining the CBDC bandwagon.

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Author: Jimmy Aki

Due to Increased Demand, Social Trading Platform Firm eToro Now Supports DOGE

Bitcoin may have brought cryptocurrencies to the limelight, but altcoins seem to be enjoying media attention in recent weeks.

The unprecedented surge in the value of small-cap cryptocurrencies has brought an influx of investors who have called for their listing on popular trading platforms.

The latest is meme-based cryptocurrency Dogecoin (DOGE) which enjoyed great fame following its bullish run in April.

In a few weeks that saw Dogecoin post over 300% increase in value, calls have continued to grow for the meme token to be listed on major crypto exchanges in the US.

The first response is coming from popular brokerage company eToro.

eToro US Lists DOGE

Israeli online brokerage firm eToro announced the listing of parody-based cryptocurrency Dogecoin on its U.S platform.

The listing will see Dogecoin join a host of other popular digital assets like Bitcoin (BTC), Ethereum (ETH), as well as, BCH, XRP, TRX, ETC, ADA, DASH, LTC, EOS, MIOTA, XLM, NEO, XTZ, ZEC, LINK, and UNI on the eToro US platform.

The brokerage firm with over 20 million active global users noted that this step was taken due to growing client demand for the meme coin to be listed.

eToro’s decision comes at a point in time when it witnessed remarkable rallies. It’s known as one of the most highly sought-after digital currencies.

It has also received backing from popular figures like Tesla’s Elon Musk and Shark Tank investor Mark Cuban.

Both men have contributed immensely to the continued success of Dogecoin.

At one point, Musk described DOGE as his favorite crypto.

This saw the price of the digital asset climb 20% with a further 10% when he confirmed his appearance on the popular tv show Saturday Night Live.

Cuban has been quite vocal too.

He has spent the better part of 2021 talking about cryptocurrencies and their potential to revolutionize the financial landscape.

In a recent tweet, he compared Bitcoin and gold as stores of value, noting that both are more or less financial religions in how they are used.

He also noted that BTC is easy to trade, create, and store with minimal delivery issues.

Also, Bitcoin allows for the transfer of value domestically and cross-border in contrast to gold which he said can be a hassle.

He also spoke on the decentralized platform Ethereum, which he said is far better, cheaper, and faster in authenticating financial transactions in a trustless manner through smart contracts than conventional financial institutions.

Cuban did not forget to speak about DOGE in his series of tweets. According to the billionaire investor, Doge may become a usable currency if more companies accept the digital coin in exchange for products and services.

Businesses Jumping on DOGE

Top on the list of companies adopting Dogecoin is NBA franchise Dallas Mavericks. The Mavs have since accepted Dogecoin as a form of payment for tickets and online merchandise. The solution was done in partnership with crypto payment provider BitPay.

Other businesses jumping on the Doge train have been consumer electronics company Newegg, Air Baltic, and Canada-based internet service provider EasyDNS.

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Author: Jimmy Aki

Google Search Volume for Cryptocurrency in Turkey Is At An ATH After Payment Ban

While the central bank is busy banning crypto payments, people in Turkey have never searched for altcoin, crypto, and DeFi this much.

After tumbling to about $50k, the price of Bitcoin recovered to $57,600 but continues to struggle to recover strongly.

Many speculated that this crash could have been started by Turkey’s central bank banning the use of cryptos for purchases citing possible “irreparable” damage and transaction risks.

In the legislation that was published in the Official Gazette and goes into effect on April 30, the central bank said crypto-assets were “neither subject to any regulation and supervision mechanisms nor a central regulatory authority,” among other security risks.

Turkey’s main opposition leader Kemal Kilicdaroglu described this directive as another case of “midnight bullying,” referring to President Tayyip Erdogan firing the central bank governor last month in a midnight decree.

“It’s like they have to commit foolishness at night,” he said on Twitter.

Before making any such decisions, all stakeholders must be discussed, said Kilicdaroglu, adding that blockchain and crypto are the only areas where their $ 1 billion (Unicorn) ventures will emerge.

“They hit financial technology startups. They have no tolerance for young people,” he said.

A couple of weeks back, Turkish authorities had also demanded user information from crypto trading platforms.

“Any authority which starts regulating (the market) with a ban will end up frustrated (since this) encourages fintech startups to move abroad,” said economist Ugur Gurses.

Increased Interest

Just last week, Royal Motors, which distributes Rolls-Royce and Lotus cars in Turkey, announced that they are accepting payment in cryptos.

The directive to ban crypto for payments came after cryptocurrencies gained popularity in the country in the aftermath of the Lira (TRY) hitting a fresh low against the USD last month.

This interest in Bitcoin has been strong since November last year, as per Google Trend, while for “crypto” and “altcoin,” it is the highest ever. Interestingly, the same is the case for “DeFi” and NFTs.

This makes sense given that NEO, XRP, USDT, and TRX are the most traded crypto assets on the largest crypto exchange in Turkey, BtcTurk, as per Coinmarketcap.

Google Search Volume Crypto Turkey

Source: Google Trends

The boom of cryptos in the country has replaced the rush for gold and real estate as a hedge against the struggling lira and rising inflation, which reached a six-month high of 16%, and official unemployment rates hitting 13.4%.

Last month, BtcTurk recorded soaring volumes, with BTC-TRY up more than BTC-USD this year.

Even in the aftermath of the weekend sell-off, BTC is still up 112% YTD against TRY, and the all-time high was an uptrend of 140% this month while in USD terms is 93%, and $65k was 132% gains in 2021.

As of writing, Bitcoin is trading at $55,888 on BtcTurk and $55,125 on Coinbase Pro.

Between early Feb and late March, crypto trading volumes in Turkey hit 218 billion lira ($27 billion), up from just over 7 billion lira in the same period a year earlier.

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Author: AnTy

9% of 16-Year Old Americans, Mainly Male, have Traded Cryptocurrency: Survey Reveals

9% of 16-Year Old Americans, Mainly Male, have Traded Cryptocurrency: Survey Reveals

9% of teens claim to have traded cryptocurrency, reveals the latest survey by Piper Sandler.

The Generation Z survey of more than 7,000 U.S. teens with an average age of 16.1 years further revealed that a good majority of these crypto traders, 81% are male.

The survey didn’t share any other insight into which cryptos were favored among the teens or if they are still holding it or just buying and selling.

It is somewhat possible that these teens might be partaking in the burgeoning sector DeFi given that centralized cryptocurrency exchanges follow strict KYC measures. As we have seen in the crypto, especially the decentralized finance sector, the younger generation is taking the reins and has also been involved in the building process.

Out of these teens surveyed, 33% of them hold a part-time job, the same as in the fall of 2020, with parents contributing 61% in the spending. However, “self-reported” spending improved 1% to $2,165.

Food accounts for the number one priority of teens at 23% share of their wallet. In the aftermath of the pandemic, 46% of teens believe the economy is getting worse, while 25% believe it is getting better.

Cash, however, is the king as the top payment method for teens, unlike the worldwide trend of cashless. Cash is followed by Apple Pay, with Venmo being the most used payment app.

When it comes to favorite social media platforms, Snapchat is a favorite among the teens with 31% share followed by TikTok (30%) and Instagram (24%, down 700 bps Y/Y).

As we saw in the past few months, TikTok was also popular among newbie crypto investors, with people shilling cryptocurrencies, especially Dogecoin (DOGE) on the platform, sending its prices closer to $1.

With more and more crypto companies now investing in growth marketing, FTX sealing the deal with Miami Heat and Coinbase planning for sales and marketing to be between 12% and 15% of net revenue in 2021, these insights and social media platforms may help crypto firms bring in the masses and targeting the younger generation to the industry.

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Author: AnTy

‘Too Much’ Bitcoin Supply Is In Search of Yield Reveals True Inherent Yield on Crypto Assets

Decentralized Finance (DeFi) continues to attract not just degens and crypto enthusiasts, but as we have been seeing, government authorities are also getting interested.

As we reported recently, the US Federal Reserve published a paper on DeFi, and now the Fed is interested in knowing more about the revolutionary and burgeoning sector that, according to the crypto market, could one day in the future replace banks and traditional finance.

“Today, I had the opportunity to present DeFi and Compound Finance to the Federal Reserve staff. Eventually, the banking system will run on shared, open ledgers. Each day, we get closer,” tweeted Robert Leshner, founder, and CEO of lending protocol Compound.

An increasing number of cryptocurrency firms are also offering banking features.

This week, Abra announced the launch of its new crypto banking feature, Abra Borrow, that will enable customers on the Abra Mobile App globally and in 35 U.S. states to borrow against their crypto holdings.

“Abra already has a critical mass of over 1,000,000 users, and we’re excited to roll out our new Borrow feature by popular customer demand,” said Bill Barhydt, Founder, and CEO of Abra.

“By allowing people to borrow US dollars against their digital assets, users can immediately tap into their crypto price gains without selling their crypto or forgoing future price gains.”

What’s the Point?

Amidst this growing interest in banking features, BlockFi made waves in the industry by slashing the interest rates so much that the rate on the highest amount of BTC and ETH has been brought down to the rates offered by the banks.

This has the community dragging BlockFi through the mud and arguing what’s the point of lending your crypto assets for such a meager amount of rates.

“Blockfi is now reducing their yield on BTC in ranges down to 0.5%. I can make more money from my non-custodial Lightning nodes than I can with them, and peers don’t even send me complaints if I fund a channel via a CoinJoin. I’ve pulled my BTC from BlockFi and reallocated it to LN,” commented Alex Bosworth, Lightning infrastructure Lead at Lightning.

It was “Long Overdue”

BlockFi had clarified that it is because of the market conditions, the supply and demand of the lending in crypto.

Matthew Ballensweig, the head of lending at competing firm Genesis Trading, who previously worked at Bridgewater Associates, also chimed in on BlockFi’s defense, saying,

“Crypto rate markets, like most markets, aren’t static. BlockFi cutting rates is just a supply/demand lever. There is simply too much BTC supply in search of yield relative to institutional demand for that BTC.”

He explained that Bitcoin “borrow demand is a function of the risk-adjusted return opportunities in the market and right now they are limited.”

Not only is public shares vs. private placement arbitrage backward, but futures markets are also in heavy contango. With limited ways to deploy BTC, the yields are contracting fast.

“You either grow your user base by offering generous yields on assets, or you focus on profitability and optimize your business for net interest margin,” he said. It was basically inevitable and “long overdue,” and these rates, according to him,

“represents a much truer picture of the inherent yield on crypto assets in this market.”

While the BTC deployment opportunities would arrive as markets ebb and flow, right now, “it pays to have cash in this market, not crypto,” he added.

Fiat-Backed Cryptos Leading

Cash may not be the king in the traditional space, but fiat-backed cryptocurrencies are immensely useful and popular in the crypto market.

That is why Ballensweig doesn’t see the same drop in stablecoin rates coming as Bitcoin BTC 6.10% Bitcoin / USD BTCUSD $ 55,137.57
$3,363.396.10%
Volume 56.67 b Change $3,363.39 Open $55,137.57 Circulating 18.67 m Market Cap 1.03 t
8 h ‘Too Much’ Bitcoin Supply Is In Search of Yield Reveals True Inherent Yield on Crypto Assets 10 h ‘Nothing has Really Changed’ in the Crypto Market, Despite the Weak Price Action 10 h Microsoft Deploys V1 of Decentralized Identity Platform ‘ION’ on Bitcoin Network
and Ethereum ETH 7.14% Ethereum / USD ETHUSD $ 1,703.04
$121.607.14%
Volume 22.55 b Change $121.60 Open $1,703.04 Circulating 115.21 m Market Cap 196.21 b
4 h Alonzo Hard Fork to Bring Smart Contract Compatibility to Cardano (ADA) In April 5 h SushiSwap Launches A ‘Game-Changer;’ BentoBox’s 1st DApp Is Kashi Lending & Margin Trading 6 h Ethereum Layer 2, Optimism, Delay’s Mainnet Roll Out to July; Doesn’t Want to Rush ETH Community
; it’s the opposite, actually. Cash provides you with leverage and the ability to capture the basis between BTC futures and spot markets.

“You can take your cash or USDC and long spot, short June BTC future and capture roughly 22% ann implied on FTX Official right now,” he stated.

However, according to data provider, Skew, demand for stablecoin borrowing is cooling off after seeing a big spike in Feb.

Stablecoins gained traction during the pandemic last year. Demand for them spiked “as crypto users sought to safely park their assets. Then, as markets rallied, the DeFi sector jumped even higher, buoyed by blockchain-based borrowing and lending protocols,” which allowed crypto users to earn eye-popping interest rates on their crypto assets, noted Binance CEO, Changpeng Zhao.

Borrowing and lending protocols that drove the DeFi boom is what offers “an even brighter future for the wider DeFi ecosystem,” he said.

Aiming to defy traditional finance, with its high costs and inefficiencies, “these borrowing and lending protocols offer a proof-of-concept that showcases DeFi’s disruptive potential—and enduring appeal,” Zhao added.

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Author: AnTy

Grayscale Closes Private Placement in GBTC, Which Holds 3.5% of Bitcoin’s Circulating Supply

Meanwhile, the GBTC continues to trade at a discount as Grayscale, which does not have any redemption program, works on converting it into an ETF.

It’s been close to two weeks that Grayscale Investments, the world’s largest digital asset manager, has seen any inflows in its Bitcoin Trust (GBTC).

This is because the fund has closed any private placement for now. The message on the website reads,

“The Grayscale Bitcoin Trust private placement is offered on a periodic basis throughout the year and is currently closed.”

As of writing, GBTC has 655,360 BTC, representing just over 3.5% of Bitcoin’s circulating supply, $37.1 billion worth of total holdings.

This has been while GBTC continues to trade at a discount since late February. Much like GBTC, ETHE is also at a discount of 7%. While Grayscale Ethereum Trust is currently open, it only added 3,769 ETH this month, as per Bybt.

Grayscale’s infamous premium has provided hedge funds an opportunity to arbitrage, who deposit the coin with GBTC in exchange for shares that are worth more than the market value of BTC, and this premium is pocketed by them when they sell the marked-up shares after a six-month lock-up period. Nic Carter, of crypto-focused venture firm Castle Island Ventures, told Bloomberg,

“It became just too popular and there’s only so much demand at the end of the day by retail investors who are using Schwab or using Fidelity or a traditional brokerage.”

“Basically, too many funds plowed capital into this trade thinking it was a slam dunk, and then as that capital matured and the units in the trust became market-tradable, the demand that they expected to materialize wasn’t there from the market.”

Grayscale’s crypto products do not have a redemption program as assets are held in a trust currently; shares can only be created.

And the asset manager halts creations from time to time. “The Trust may, but will not be required to, seek regulatory approval to operate a redemption program,” states the website.

Bitcoin bull Cathie Wood of Ark Investment Management is one of the largest holders of the Trust along with Horizon Kinetics LLC and Churchill Management Corp.

This week, Digital Currency Group, the parent company of Grayscale, announced that it would be buying up to $250 million worth of GBTC shares.

As we reported, Grayscale is working on the process of becoming an exchange-traded Fund (ETF) as it hires several ETF executives.

While the US has yet to approve one, Canada has already seen two ETFs that made their debut last month and saw a great response. The first Purpose Bitcoin ETF (BTCC), has amassed $464 million in assets, while another one, Evolve Fund Group’s Bitcoin ETF (ticker EBIT), has attracted $42 million so far.

In the light of the growing demand for Bitcoin products, now US ETF issuers are getting creative. Simplify US Equity Plus Bitcoin ETF (SPBC) is investing up to 15% of its assets in cryptos either “indirectly and solely” through GBTC, as per a filing. Financial Enhancement Group’s Andrew Thrasher said,

“This fund will appeal to a lot of advisors who have had an interest in getting exposure to Bitcoin or have clients asking for crypto.”

“This gives the potential to have Bitcoin exposure within a traditional custodian account in an ETF wrapper, which hasn’t been done in the U.S. due to SEC resistance to approve a pure Bitcoin ETF.”

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Author: AnTy