Institutional Demand in Bitcoin is Increasing at an ‘Accelerating Pace’ in 2021: Grayscale CEO

Institutional Demand in Bitcoin is Increasing at an ‘Accelerating Pace’ in 2021: Grayscale CEO

  • Institutional digital asset investment, Grayscale CEO, Michael Sonnenshein says companies’ interest in Bitcoin is increasing at an accelerating pace.
  • Could 2021 be the year institutions finally take over the crypto space?

The crypto market is still buzzing off Tesla’s $1.5 billion bets on Bitcoin as the company designated 7.7% of its cash reserves to purchase Bitcoin (BTC) last month. In an interview with CNBC’s Squawk Box on Wednesday, Grayscale CEO, Michael Sonenshein, said this latest trend of institutions such as Tesla, Square, PayPal, and Twitter adding Bitcoin to their operations and balance sheets is set to boost across 2021.

Notably, companies prepare themselves to add Bitcoin to their reserves this year as the sentiment around the digital asset switches, Sonnenshein said. In particular, Michael Saylor, Jack Dorsey, and Elon Musk have started a Bitcoin movement that is spreading across institutions like wildfire, he added,

“I wouldn’t be surprised to see there being almost some sort of a race now — you have Elon Musk, you have Michael Saylor, Jack Dorsey.”

“You’re gonna see a lot of other visionary leaders in disruptive companies actually realizing that it’s really moved from ‘why’ to ‘why not,’ and see which companies are next to get involved in having Bitcoin as part of their treasury program.”

Institutional demand for BTC is not only increasing, but it is doing so at an accelerating pace, according to Sonnenshein. The inflows on Grayscale so far in 2021 are outpacing last year’s inflow, which could be a key indicator that the demand for Bitcoin is accelerating. He said,

“I’m very pleased to say and encouraged that that momentum is not only continuing this year but is actually accelerating.”

“So we’re seeing very, very sustained and growing demand from a lot of institutional players at the moment.”

One of the reasons that institutions are flocking into Bitcoin is “regulatory concerns,” Sonnenshein explained. Those tasked with company treasuries are increasingly finding ways to invest in digital assets legally, and the “no-regulation” narrative is slowly fading.

Secondly, companies are also focusing on the size of their reserves and timing. MicroStrategy made several buys across 2020 totaling $1.3 billion, while Tesla made a one-off payment. According to the Grayscale CEO, institutions are more likely to move to buy in intervals than a one-off buy. He explained,

“I think the second piece of the conversation is around sizing and timing.”

“[Institutions] they recognize that they don’t need to get invested all at once.”

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Author: Lujan Odera

Ethereum 2.0 Deposits Slow Down This Week; Only 10% of ETH Staking Goal Achieved So Far

Since the Ether staking activated, ETH has been deposited at a steady pace. Currently, 56,113 Ether, worth nearly $26.5 million, has made it to the deposit contract.

This is just over 10% of the required 524,288 ETH (16,384 validators) to launch the mainnet. The Phase 0 staking goal is much far away that could see the expected launch date of December 1st being pushed back.

As one ETH enthusiast shared their concern, “An average of 2,100 ETH per day has been deposited over the last three days. We need ~32,000 ETH per day from now till 11/24 to meet the 12/1 launch date. At the current rate, we will NOT launch till June 2021.”

The number of ETH 2.0 deposits have actually slowed down considerably this week.


However, ETH holders will likely be staking more and more ETH towards the deadline. This is because the size of rewards depends on the total amount of ETH staked in total — the more the people staked, the lower the yield.

Besides the late mover having more information, staking ETH is a one-way street, and if something goes wrong with ETH 2.0, these ETH are gone forever. Moreover, staking via exchanges offers instant liquidity on BETH, and the exchange will be the one doing the work of running a virtual validator.

“This makes sense though – not only is there a yield opportunity cost from now until Dec 1 on ETH1, but if you deposit later, you’ll get a better idea of ETH2 staking yield,” said analyst Cetris Paribus.

Amidst this, Ethereum Foundation is funding several grants for ETH 2.0 staking.

According to CryptoQuant CEO Ki Young Ju’s Twitter poll, 45% of the 815 votes are “just not interested” in locking their ETH. While 15.5% says their ETH are locked on other projects, a good 26% says there is a lack of staking rewards with a deadline effect as per 13.5% of the votes.

Additionally, this past week, ETH price saw substantial gains, currently trading near $470, with ~80% of $ETH addresses experiencing profit. However, both the transaction and social volume of ETH have begun to decline, with positive funding rates making an appearance mean the price may take a breather here.

But the fact that crypto exchanges’ ETH balance is declining and active addresses are increasing only slightly; these deposits can gain momentum.

Also Read: Ethereum Undergoes ‘Unannounced Hard Fork’ After Infura Goes Down

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Author: AnTy

Wrapped Bitcoin (WBTC) Beats Aave & Curve to Become the Third Largest DeFi Project

Bitcoin on Ethereum continues to grow at warp speed, reaching above $1.6 billion, on pace with 145k BTC.

Several projects like renBTC, imBTC, HBTC, TBTC, pBTC, and sBTC are putting BTC on the second largest network. Wrapped Bitcoin (WBTC) dominates this growth by accounting for 73.6% of the BTC on Ethereum.

105,132 WBTC worth $1.2 billion has been minted so far, which has increased a whopping 9,380% since the beginning of 2020.

With this, WBTC has jumped past the likes of Yearn.Finance, Synthetix, Compound, Curve Finance, and Aave to become the third-largest DeFi project.

Uniswap, with a record of $2.73 billion in total value locked (TVL) and dominance of 24.12%, and Maker with nearly $2 billion of crypto funds locked are the only ones bigger than Wrapped Bitcoin.

Source: DeFiPulse

WBTC is one of the fastest-growing DeFi projects, much like the overall sector, which is hitting new highs of $11.4 billion in TVL.

Interestingly, yesterday, the largest WBTC was minted in a single day by CoinList. This largest mint of 5,000 WBTC was made in two separate transactions — the first one involved 1,299.48 WBTC while the second transaction involved 3,697.5 WBTC.

This record breaks the last one made by FTX CEO Sam Bakman-Fried’s crypto trading firm Almeda Research that one-upped the previous record with 2,316.5 WBTC.

WBTC is an ERC-20 token backed by bitcoin in a 1:1 ratio, where the BTC is held in the custody of BitGo.

With this, DeFi users can participate in various applications without actually using their Bitcoin. It further brings Bitcoin’s vast liquidity, with a $210 billion market, to the $42 billion market cap Ethereum network.

Demand for WBTC continues to soar, as seen in its growth as this allows Bitcoin holders to take part in exciting DeFi apps like yield farming and earn income on their BTC without giving it up.

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Author: AnTy

Ethereum Now Leading Bitcoin as ETH Breaks a 2-Year Downtrend

This week, Bitcoin continues to move upwards though at a slow pace, currently trading above $9,600. The leading digital currency might have kickstarted the greens into action, but it is carried forward by Ethereum.

Bitcoin still needs to break $9,700, says trader Josh Rager adding, “Bitcoin will get its time to shine. ETH is leading now, so pay attention to Ethereum price.”

The second-largest cryptocurrency is yet again outperforming Bitcoin by increasing 22% this week compared to just 5.4% gains recorded by BTC.

In 2020 so far, while Bitcoin registered just about 31% gains, Ether has gone up by 117%.

The fact that this week, Bitcoin is “being dragged by ETH instead of SPY is a bullish development,” said analyst Ceteris Paribus.

As we reported, this opposite direction bitcoin is going towards the equities market has the one-month correlation of Bitcoin and S&P 500 falling by over 50% to 36.5% from an all-time of 78.8% set on July 8, 2020.

And this might be just the beginning as trader Jonny Moe said, “ETH making its play on $290 now. I’ve got to say, the way the ETH and BTC low timeframes are shaping up, I don’t think it stops here.”

Interestingly, the market seems to think the same as ETH longs continue to hit new peaks. With yet another ATH in notional value, ETH longs on Bitfinex has hit $510 million, a jump of 65.5% since mid-May.

This isn’t the first time Ether has led bitcoin; it’s happened before. During the last bull market as well, Ether recorded an over 9,150% increase in its price in the year 2017 versus Bitcoin’s 1,318% jump.

This year, this growth in ETH is the result of rapid growth in demand for stablecoins and DeFi, which is expected to push ETH price further and higher in the long term.

This increased demand, as we reported, has pushed fees on the Ethereum Network to skyrocket, which now has miner revenue from fees surging to an all-time high.

“On the hourly chart, we’re seeing that currently more than a third of the ETH miner revenue comes from fees rather than block subsidy – up from less than 5% in April,” noted Glassnode.

Ethereum network is working at its capacity with active address count, the number of unique addresses that either send or received ETH on a given day, also topping 500,000, which was last seen at the “backend of the 2017-18 ICO craze.”

Ethereum’s daily address count has doubled YTD, now outpacing Bitcoin by a good margin.

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Author: AnTy

Cryptos Sliding Out of the Top Race, These Altcoins are Taking the Place of Top Cryptos

The stock market is flying.

Today, Nasdaq Composite is on pace for another all-time high after setting a new peak yesterday, led by major tech shares such as Microsoft and Apple.

While the S&P 500 is flatline and the Dow dropped 0.7%, tech-heavy Nasdaq gained 0.6%.

But it’s not only the stocks that are surging, but digital assets are also on a tear too, many tokens are gaining 50%-1,000% since the lows in March.

It’s those tokens that are issued by companies that are “beginning to achieve real product market fit,” said Jeff Dorman, Chief Investment Officer at Los Angeles-based money manager Arca.

If we take a look at the top cryptos like Bitcoin, Ethereum, and XRP, it is hard to see, but the crypto market is seeing its very own fireworks.

The Movers & Shakers

In 2020 so far, the DeFi project Aave has surged over 2,100% and Kyber Network 815%. Other known big winners are Bancor (490%), REN (468%), Loopring (342%), Zilliqa (328%), ERD (320%), DigiByte (298%), and Cardano (240%).

Now coming onto the coins that are slowly losing their place are:

XRP, the worst performer of 2020, has already fallen one place below to 4th position.

At the beginning of 2020, Litecoin was at 6th place, EOS 7th, Monero 10th, and Stellar 11th, which have now declined to 8th, 11th, 16th, and 17th place respectively.

Left: Crypto market as of January 4th, 2020, Right: Crypto market as of July 5th, 2020

But today, these positions are captured by other coins. At 6th place, the new crypto is Cardano, which is yet again surging today by 17% and, in anticipation of its Shelley mainnet launch in the coming months, has climbed over 400% since March lows.

IOHK USA, the company behind Cardano, also received a PPP loan between $350K and $1 million.

Chainlink, which continues to make new all-time highs, the latest one is $5.68 at the time of writing, which captured 12th spot, up from 20th rank on January 4th, 2020.

From the 27th spot, Coin has climbed to 10th place, which is up 300% YTD.

Altcoin Season or Extinction

The top cryptos might not be ready yet but still, Bitcoin ended the second quarter better than other traditional assets with 42% gains.

The lack of activity in Bitcoin is actually good for altcoins and its dominance has already been falling since May when it was near 70%.

The DeFi boom is also helping Ethereum, at least in terms of network activity. And it is possible, ETH won’t outperform until the DeFi cycle ends because “new money coming in will have missed the 10-50x returns, see that eth has still trended relatively flat, and buy eth instead as it’s a safer & simpler,” said analyst Ceteris Paribus.

According to trader Crypto Wolf, “ETH is building it’s momentum. We can notice a series of S/R flip, imo this is very bullish as we are building the bases for a parabolic scheme.”

Even XRP may soon see some movement.

However, when this altcoin movement stops, it would be the time for Bitcoin to get on a bull ride. Currently, its implied volatility is at its lowest since March 31, 2019, and realized volatility is at its lowest since April 1st, 2019. So, the leading cryptocurrency may get to see some volatility soon too.

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Author: AnTy

Raging Protests Across America Historically Bodes Well for Stocks; What About Bitcoin?

Coronavirus cases in the US are slowing down, rising by the slowest pace of 1.1% in five days after over 1.8 million reported cases and more than 106,208 deaths so far.

“Market upside ultimately depends on the path of the virus and the success of reopening,” wrote Credit Suisse Chief U.S. Equity Strategist Jonathan Golub on Monday.

The stock market opened higher only for Dow Jones to then drop by 0.38% along with the S&P 500 (currently above 3,000) and Nasdaq by 0.38% and 0.29% respectively.

When it comes to reopening the opening, Chicago which is hit hard by violent protests over a police custody death may delay its reopening.

Grappling with protests and cold war with China

The death of an African American at the hands of the police in the United States has set off mass protests against police brutality.

A chorus of criticism has erupted in many parts of the world alongside the unrest in the US over the death of 46-year old George Floyd last week.

Chinese officials and state media seized this news to compare these protests to the pro-democracy movement in Hong Kong, accusing Washington of hypocrisy.

Beijing repeatedly blamed “foreign forces” for inciting and diving Hong Kong protests.

The US administration has been vocal in support of Hong Kong’s pro-democracy movement. In response, Lijian Zhao the foreign ministry spokesman on Monday urged the US to protect the lawful rights of the minority and eliminate racial discrimination.

“US House Speaker Nancy Pelosi once called the violent protests in Hong Kong ‘a beautiful sight to behold.’… US politicians now can enjoy this sight from their own windows,” wrote Hu Xijin, editor-in-chief of nationalist tabloid Global Times.

Zhao also threatened with “counter-attacks” on the US for reversing Hong Kong’s special custom status.

This house of cards will come toppling down very soon

The stock market enters June on a higher trend despite multiple challenges ahead. S&P 500 rallied over 36% off its March 23 low despite a global pandemic, political and civil unrest, and economic and earnings downturn. Art Hogan of National Securities noted,

“At the levels we’re at, I wouldn’t be surprised to see the market take a pause and pull back.”

“We can say we’re slowly reopening and there’s going to be economic activity but it’s hard to defend valuations with so much unrest that we’re seeing going on in this country this weekend.”

But others believe protest won’t materially impact markets which is historically correct. As a matter of fact, stocks have risen while riots flared up. For the riots to have a major impact, there needs to be an expectation of long-lasting riots “otherwise they are noise as far as asset prices go.” Analyst Mati Greenspan said,

“Already hearing analysts with bated breath getting excited about buying stocks now because the #GeorgeFloyd protests will unleash additional monetary stimulus from the FederalReserve.”

“This house of cards will come toppling down very soon.”

According to Goldman Sachs analysts as well, the “remarkable journey” of US stocks is likely to stop, with its year-end target at 3,000, because of “numerous medical, economic and political risks dot the investment landscape.”

What about Bitcoin?

The world’s leading digital currency is trading around $9,550, up 0.80%. May marked the “highest monthly close on BTC in over 7 months.” So far, in 2020 BTC/USD is up 30.58% and nearly 50% in Q2 of 2020.

However, the June 1 candle has opened into resistance and it needs to “confirm itself above this structure” otherwise be ready for rejection and risk distribution.

If the stock market takes a hard hit, bitcoin could also be in danger of some extent of sell-off.

Historically, however, April, May, and June have been good months for bitcoin price performance which combined with investors preferring to hold their coins, institutional investors flocking to the digital currency and Federal Reserve’s balance sheet surpassing $7.09 trillion for the week ending in May 20 works in favor of bitcoin.

In the current global backdrop of social unrest, bitcoin — a decentralized, deflationary asset that is censorship-resistant and unseizable offers a great alternative.

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Author: AnTy

Use Of Bitcoin Among Merchants Increased In 2019, New Data Shows

While the adoption of Bitcoin for day-to-day transactions may be moving at a slow pace, the use of the coin among the merchants soared last year, CoinDesk reports.

BitPay, the cryptocurrency payment processor, processed an equivalent of about $1 billion worth of crypto transactions last year with Bitcoin transactions dominating the transactions, Bill Zielke, the firm’s CMO revealed.similarly, Coinbase Commerce facilitated about $135 million of crypto transaction for numerous merchants last year. This was a 600% rise in the volume of crypto transactions through Coinbase Commerce from 2018.

Stablecoins led by Ether took up just a fraction of the the two mentioned transaction totals. Meanwhile, according to Chainalysis, slightly over $4 billion worth of Bitcoin was transacted via payment processors last year. In this case, CoinBase is aggressively pushing for an increase of its merchant transactions this year.

Despite the rise in the volume of Bitcoin transactions among merchants, it is still very low compared to credit card purchases. Credit card purchases were worth $3.7 trillion in 2018 as per the U.S. Bureau of Consumer Financial Protection report .

The Bitcoin transaction volumes were also contributed by consumer facing firms. Will Reeves, Fold CEO, revealed that the firm facilitated over 2,000 purchases last year during the holiday shopping season. Reeves also stated that more than 80 percent of the total transactions were through Lightning Network. Reeves stated that Starbucks, Amazon as well as Sephora witnessed the highest transactions among the lightning users.

There have been fresh options for merchants, last week Zap introduced Strike, which is an app that allows users to pay using the US dollar through the lightning network.

Payments using cryptos are gaining traction among the merchants with some citing security as the main attraction. According to Jean-Michel Daumas, the proprietor of Lola Luna Boutique, crypto payments are more secure compared to other payment methods like PayPal since clients can lie and say they didn’t receive their orders and get their money back. Lona Lula took in about 90 Bitcoin in payments last year.

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Author: Joseph Kibe

People’s Bank of China Injects $174M Into Economy, More Than Bitcoins Entire Market Cap

While economies all over the world are functioning at a slower pace, central banks are trying to prevent a collapse by flooding more money into their markets, with China injecting the entire Bitcoin (BTC) market cap into the system.

In other words, People’s Bank of China (PBoC) intends to increase the sum of 1.2 trillion yuan into the market, in an effort to fight the financial instability due to the Coronavirus outbreak. Crypto enthusiasts have noticed this and are preparing for stormy weather when it comes to the economic activity in the country. Coronavirus killed more than 300 Chinese people and infected another 14,350. It started at the same time the markets were closed for the lunar New Year’s holidays.

The US Federal Reserve Has Injected Billions of Dollars Since September 2019

Repurchase agreements and banking bailouts are meant to increase commercial banks’ liquidity while the new money enters the system. Last year in September, the US Federal Reserve has injected billions of dollars into the US market, with President Trump also offering bonuses and tax cuts to banks and billionaires. This is the announcement made by PBoC yesterday when it comes to the 1.2 trillion yuan:

“Inject 1.2 trillion yuan via reverse repo operations on February 3 to ensure sufficient liquidity supply. The liquidity of the overall banking system will be 900 billion yuan more than the same period of last year.”

Bitcoin Comes to Solve Economic Problems

This weekend, Chinese authorities have announced 30 measures for bolstering the economy and combating the disruption caused by the Coronavirus outbreak. What a decentralized tamper proof currency with fixed inflation and a finite supply would do has been discussed very intensely too.

BTC is becoming more and more appreciated during economic adversity, with China turning to it even from before the viral outbreak. More than this, the country already has an important role in moving BTC. The central bank is only advocating the asset’s immunity to monetary manipulation.

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Author: Oana Ularu

Are Institutional Investors Still Interested In Cryptocurrencies: 2019 Report

Over the course of the year, institutional investment has increased at a fast pace following the rapid development in the industry and exponential growth in Bitcoin over the last 12 months. CEO of digital asset manager Vision Hill Group, Scott Army, released the ten most important things that institutional investors should be looking for come 2020. How big can the blockchain and cryptocurrency market grow?

Here are some key concepts derived from the report, “An Institutional Take on the 2019/2020 Digital Asset Market.”

Bitcoin remains the supreme cryptocurrency

During the bear run in 2018, During the 2018 Bear run, BTC price dropped far less than the 90%+ of the top altcoins and has shown no signs of slowing in its dominance as 2019 saw the coin shoot up over 100% as altcoins remained relatively flat. The dominance by Bitcoin shows a clear disparity in the market – There’s bitcoin, and then there’s everything else.

Furthermore, the coin acts as the market beta, at least for now, given its huge market dominance – currently at 68.4%, as at the time of writing. The op-ed reads,

“Bitcoin’s size and its institutionalization has enabled it to be an attractive first step for allocators looking to get exposure (both long and short) to the digital asset market, suggesting that bitcoin is perhaps positioned to be digital asset market beta, for now.”

Institutional investment interest is on a gradual rise

The conversion numbers remained low during 2019 given the sustained bearish momentum through the previous year. Despite this, the field has witnessed a massive growth in institutional investor interest as educational progress took massive steps.

Big institutional funds, hedge funds, banking, and fund managers are taking a keen interest in the field with the processes for forming a digital asset strategy that is either getting started or already in motion in these firms.

Simplicity wins the day

It is getting clearer that active management in the space is dying a slow death with crypto fund managers opting to have singe asset index funds or exclusively trade in Bitcoin.

“Since the start of 2019, active managers were collectively up 30 percent on an absolute return basis according to our [Vision Hill] tracking of approximately 50 institutional-quality funds, compared to bitcoin being up 122 percent over the same time period.”

The slow process in approval of the Bitcoin ETF is yet another key moment through 2019 in institutional investing. Due to this, funds have resulted in privatized single asset vehicles such as Galaxy Digital’s, Grayscale Bitcoin Trust and other institutional investment products such as Bakkt futures and Fidelity’s latest London branch to serve European investors.

DeFi economies stamped authority in 2019

Smart contract powered collateral economies, one of the many cases DeFi, have seen a spike in interest as the world starts to embrace finance in a way, traditional finance cannot compete with. A platform such as Maker (MKR) allows users to earn value from their tokens by either lending or borrowing, giving the token a form of economic utility. The benefit of digital collateral is that it can be liquid and economically productive while at the same time serving its primary purpose.

However, the increasing value in DeFi and the economies built on smart contracts is not being reflected on the value of Ethereum, the platform hosting the ecosystem. Since the start of the year, ETH is trading over 30% lower despite hosting a multitude of Dapps and users.

Product market fit finally taking shape

With such a huge interest in the field, the development of fitting products to the market is only just a matter of time. The huge investments already poured into the field with Big Tech companies such as Twitter and Facebook announcing their Bluesky and Libra projects respectively signaling an opening market for blockchain.

“We are at the tip of the iceberg as it relates to the products and applications blockchain technology enables, and mainstream users will come with growing manifestations of product-market fit. As more time and attention gets spent on diagnosing problems and working on solutions, the industry will begin to achieve its full potential.”

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Author: Lujan Odera