Purpose Bitcoin ETF (BTCC) Becomes Leader by Just Being the First Mover

This doesn’t bode well for Grayscale Bitcoin Trust (GBTC), which doesn’t have a redemption option. Already all three Bitcoin closed-end funds (CEF) in Canada went into discounts, but they do have redemption programs.

Last week, the first Bitcoin exchange-traded fund, Purpose Bitcoin ETF (BTCC), made its debut on the Toronto exchange, and it received an amazing response.

Launched on Feb. 18, it has already attracted more than $500 million of investor capital.

This week, TMX Group will be listing options around the Purpose Bitcoin ETF on the Montréal Exchange to cater to both the retail and institutional investors. Som Seif, founder, and CEO of Purpose Investments said,

“This is great news for investors and a powerful display of innovation in motion.”

“Not only does this provide investors with more ways to gain exposure to Bitcoin, but it also really cements the idea that Purpose Bitcoin ETF is the premier tracker of the cryptocurrency in North America.”

Now, another firm, Evolve Fund Group in Canada, has lowered the price on its Bitcoin ETF, EBIT, to 0.75% from 1% to compete. With this move, EBIT has now become cheaper than the 1% expense ratio of its competitor, the Purpose Bitcoin ETF.

BTCC started trading just a day before Evolve’s offering. However, compared to BTCC’s more than half a billion in assets, EBIT has only captured $28 million. Ben Slavin, head of ETFs for BNY Mellon Asset Servicing said,

“BTCC illustrates the importance of first-mover advantage in ETFs.”

“A one-day head start was all that was required to establish a clear lead for Bitcoin ETFs in Canada.”

On the first day of trading, more than $165 million worth of shares in the Purpose product changed hands, while for EBIT, it was just $14.6 million.

According to James Seyffart of Bloomberg, the launch of Bitcoin ETF in Canada doesn’t bode well for Grayscale Bitcoin Trust (GBTC) either because it doesn’t have a redemption option yet.

He noted how all three Bitcoin closed-end funds (CEF) in Canada went into discounts, BTCG down under -16%, immediately when BTCC began trading. But Candian CEFs have redemption programs, so that should limit discounts around month-end, he said.

As a matter of fact, on Thursday, the premium on GBTC also went negative to its lowest level. This huge demand for the Candian fund has also ramped up the interest in the US for issuers to gain first approval in launching a Bitcoin ETF. Nate Geraci, president of the ETF Store, an advisory firm said,

“Prospective Bitcoin ETF issuers in the U.S. must be salivating after witnessing the debut of BTCC, but they’re also likely feeling much more pressure now.”

“It’s reasonable to assume the winner of the U.S. Bitcoin ETF race stands to benefit significantly.”

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Author: AnTy

Bill Miller’s Opportunity Trust Files for GBTC Investment; Up to 15% of its $2.25B Assets

Bill Miller’s Opportunity Trust Files for GBTC Investment; Up to 15% of its $2.25 Billion Assets

Miller Value Funds, the fund run by veteran investor Bill Miller has filed with the US Securities and Exchange Commission (SEC) on Friday disclosed that the firm’s Opportunity Trust fund may invest in Grayscale Bitcoin Trust (BTC).

The document, dated Feb. 5, 2021, which is subject to completion and extensively talks about Bitcoin, states that the Fund will not make any additional investments in the GBTC if, as a result of the investment,

“its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment.”

The Opportunity Trust fund had $2.25 billion in AUM as of Dec. 31st, 2020.

Bitcoin is described as a digital commodity that is not issued by a government, bank, or central organization with no physical existence beyond the record of transactions on the Blockchain, in the document.

According to the Fund’s SEC filing, currently, there is relatively little use of bitcoin in the retail and commercial marketplace compared to its relatively large use by speculators, resulting in volatility.

Besides this volatility, the risk to Funds investment is the immutability of the Bitcoin blockchain. Additionally, the lock-up period of GBTC increases the illiquid investment risk of the Fund.

As for the tax-related risks, the filing notes that many significant aspects of the US federal income in regards to Bitcoin are “uncertain.” GBTC, particularly, is treated as a grantor trust for US federal income tax purposes.

Covering the regulating part, the filing says Bitcoin is not subject to the same degree of regulation as US securities only to add, “countries, including the U.S., may in the future curtail or outlaw the acquisition, use or sale of bitcoin.”

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Author: AnTy

BlockFi Registers the ‘BlockFi Bitcoin Trust’ with the Securities and Exchange Commission

BlockFi Registers the ‘BlockFi Bitcoin Trust’ with the SEC to Compete With Grayscale’s GBTC

Crypto lending service provider BloackFi has filed for a Bitcoin Trust with the US Securities and Exchange Commission (SEC).

The ‘BlockFi Bitcoin Trust’ has yet to raise money from investors, but as a Rule 506(c) exempt offering, it would be able to offer the product publicly.

With this trust, BlockFi will directly compete with Grayscale’s Bitcoin Trust (GBTC), whose investors are predominantly institutions. Grayscale is the largest digital asset manager currently holds 648.47k BTC, representing approximately 3.5% circulating supply of Bitcoin.

The premium of GBTC is currently down at 3.52% from the highs of over 40% on Dec. 22nd and much lower than over 130% in the summer of 2017.

BlockFi currently caters to both retail and institutional clients. It has more than $8 billion in total client balances and over 125,000 funded accounts.

The firm reported about $100 million in revenue in 2020, which was an increase of 22x from the previous year.

Besides BlockFi, this week, another firm Valkyrie which has $2.3 million in sales, registered a Bitcoin trust.

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Author: AnTy

Grayscale Investments Buys 2,170 BTC, No ETH Yet While Dissolving XRP Trust Altogether

Grayscale Investments Buys 2,170 BTC, No ETH Yet While Dissolving XRP Trust Altogether

It has been a month and a week since ETHE has added any new Ethereum to its holdings, but the GBTC has got the ball rolling. Meanwhile, XRP’s delisting from major exchanges creating the issue of liquidity.

So, it has started!

After closing access to its products and not making a single purchase since Christmas, the world’s largest crypto asset manager has set things in motion again.

This week, Grayscale Investments opened the business again for new investors and started it by adding 2,170 BTC, worth about $83.5 billion at a current Bitcoin price of $39,640.

With this latest purchase, Grayscale’s Bitcoin Trust (GBTC) now holds a total of 608,810 BTC, 3.27% of Bitcoin’s circulating supply.

This purchase coincided with an 18% jump in the price of Bitcoin from yesterday’s $32,400 low. Interestingly, Bitcoin price has been ripping higher lately in tandem with all the Grayscael’s Bitcoin buying frenzy and Coinbase’s big BTC outflows that represent the institution’s involvement.

While Grayscale has started adding more BTC to its stash, the asset manager has yet to add more ETH. It has been a month and a week since ETHE has added any new Ethereum to its holdings, still keeping at 2.93 million — 2.5% of Ether’s total circulating supply.

Currency or Security!

Coming on to XRP, Grayscale has decided to dissolve its XRP Trust following the Securities and Exchange Commission’s lawsuit against Ripple and its top two executives for allegedly selling unregistered security.

The announcement came on Wednesday in which the firm mentioned the delisting of XRP from major platforms as a reason behind its move because “it is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP into U.S. dollars, and therefore continue the Trust’s operations.”

As such, the Trust has “liquidated” the XRP and intends to distribute the net cash proceeds to Trust shareholders. Just a few days back, the firm announced the liquidation of the XRP position from its Digital Large Cap Fund as well.

This move by the wide crypto market, however, has been limited to US customers. Japan is particularly clear about its stance on XRP, with Ripple partner SBI Holdings’ clarifying that the digital asset is, in fact, not a security.

Japan’s Financial Services Agency (FSA) has also said that it views XRP as a currency based on the Payment Services Act and not as a security (FSA also said this back in May of 2019). The same is the case in the UK, where XRP is considered an “exchange token.”

Ripple CEO Brad Garlinghouse also maintains that the majority, 95% of XRP trading, happens outside the US. The digital asset, meanwhile, is trading under $0.30.

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Author: AnTy

Anchorage Secures Trust Charter from OCC; Becomes First Crypto Bank

Anchorage Secures Trust Charter from Outgoing OCC Brian Brooks; Becomes First Crypto Bank

Crypto custody and financial services firm Anchorage has received a conditional trust charter from the OCC.

Anchorage, a crypto custody and financial services provider, is the first crypto native company to secure a bank charter.

According to a press release, the Office of the Comptroller of the Currency (OCC) announced on Wednesday that it had granted Anchorage a conditional license to operate as the first digital bank in the U.S.

A First for the Industry

The development is a landmark event, as it allows traditional banks to offer Bitcoin and other cryptocurrencies to their customers via Anchorage.

Anchorage was established in 2017 by Diogo Mónic and Nathan McCauley, two former employees at payment processor Square.

While it started as a custody service, the company has expanded its offering to include crypto trading and lending. It already went through two funding rounds, with the most recent involving companies like Andreessen Horowitz and VISA. It filed for the bank charter late last year, citing the need for adequate sub-custodial services in the crypto space.

Anchorage chief executive Nathan McCauley stressed that this was a significant development nonetheless. Speaking with Forbes, McCauley explained that the trust charter would make traditional banks more comfortable dealing with cryptocurrencies.

“It will let all sorts of people come to the table who until now have been hesitant to come in. It marks a big shift in the availability of crypto assets,” he added, claiming that several large companies will be more willing to invest in crypto in the future.

Industry news sources have added that a full bank charter will depend on some unique requirements. For one, Anchorage will need to fulfill certain liquidity and capital requirements. The company will also need to meet the OCC’s risk management standards.

Banks Warming Up to Crypto

Traditional banks have already shown an appetite for dealing with cryptocurrencies. JPMorgan, the country’s largest investment bank, has adopted a significantly pro-Bitcoin stance in the past few months, with several analyses detailing the possibility of the leading cryptocurrency usurping gold as the global reserve asset.

At the same time, New York-based Morgan Stanley recently increased its Bitcoin exposure after upping its stake in business intelligence solutions company MicroStrategy. A filing with the Securities and Exchange Commission (SEC) last week showed that Morgan Stanley had acquired 792,627 shares in MicroStrategy, giving it 10.9 percent ownership of the latter. MicroStrategy made significant Bitcoin plays last year, with the company owning 70,470 BTC as of December 21.

The OCC also ruled to allow banks to run independent stablecoin nodes earlier this year. In an interpretive letter, the agency explained that banks could use stablecoins for their permissible activities, including but not limited to making payments. More developments like these show that banks are gearing up to embrace digital assets, and Anchorage hopes to be a big part of that.

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Author: Jimmy Aki

Bitcoin Goes Ballistic on Christmas; Will BTC Hit $25k in 2020?

Bitcoin has hit a new ATH today at $24,720. Grayscale Bitcoin Trust meanwhile holds 607.27k BTC.

Bitcoin is looking ready to smash $25,000 on Christmas. A new day, a new ATH is the theme of 4Q20 for the BTC.

Given that the world’s largest cryptocurrency is on a price discovery, after breaking the 2017 peak of $20,000, it is what Bitcoin is now all about.

The week started on a red note and we dropped to $22,100 but ever since hitting a new peak, these small pullbacks BTC have been seeing have been reversed very shortly.

This week has been in contrast with the last week when BTC went from $18,000 to last weekend’s $24,300 high. Trader and economist Alex Kruger said,

“The crypto market became extremely levered up since the 20K breakout, which can be appreciated in futures basis and open interest spiking across the curve, and implied volatility spiked higher as traders repriced. High leverage translates into weaker hands and makes price vulnerable to large corrections. That is why we have been seeing such large two-way price moves since 20K. This is normal given such market dynamics.”

Strong Accumulation

To celebrate Christmas today, Bitcoin is looking to break through multiple levels. After yesterday’s brief trace to $22,600, we are onto new heights with a 5.5% spike and over a $1,000 green candle.

But the volume is currently low at just about $4.14 billion.

“BTC will break $25k without retesting $21k,” is what Ki Young Ju, CEO of data provider CryptoQuant expects to happen.

An interesting facet is the number of addresses holding at least 1 BTC on Christmas Eve.

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Source: Glassnode

These numbers have been consistently going up ever since the beginning of the Bitcoin, with the 2018 bull market exception when they saw a small drop. It was in December of 2018 that bitcoin bottomed at around $3,200.

Gobbling up Every Dip

Amidst all the price weakness, institutional buyers have been scooping off these dips in BTC that are followed by sharp reversals.

Coinbase has been seeing big outflows lately, reflective of massive OTC deals. On Wednesday, it hit 24,000 BTC, and then yesterday another big outflow was recorded from the San Francisco-based cryptocurrency exchange, as per CryptoQuant.

Everyone wants in on Bitcoin in the current uptrend. ByteTree founder Charlie Morris has “identified 50 companies, typically in the tech space, with surplus cash,” which are growth companies but not high dividend payers presenting a huge opportunity for BTC, if they decide to follow the same path as MicroStrategy and Square.

Also, Grayscale AUM has reached $16.4 billion while its BTC holdings have climbed to 607.27k BTC, representing 3.2% of Bitcoin’s circulating supply.

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Author: AnTy

Crypto Finance Firm, Amber Group, Partners With BitGo As The Custodian For Institutional Investors

Global crypto finance service provider Amber Group announced BitGo Trust as its qualified custodian for its institutional investors and traders.

Amber Group is a renowned name when it comes to high-frequency trading and crypto financing for institutional investors. The firm is trying to use its industry experience in partnership with the BitGo to expand its offerings. The firm wants to expand its market reach to next-generation cryptocurrency traders as well as high net-worth investors.

Amber says BitGo is the right custodian partner

Amber Group says it chose BitGo for its collaboration because of the company’s user policy controls, compliance tools, and battle-tested institutional-ready custody used in securing customers’ assets.

Another major factor that swayed Amber Group towards BitGo is the benefit of issuance. Last year, BitGo launched the most expansive and comprehensive insurance policy for digital assets, including the $100 million as protection against assets held in custody. It provided a certain level of assurance of digital assets protection that isn’t common in the industry. The assurance of funds protection is one reason why Amber Group choose BitGo as a partner in this new project.

BitGo is offering protection for funds held in its custody via the European marketplace and a syndicate of insurers in the Lloyd’s of London.

The clients who buy Excess Specie Insurance, as it is called, will stand as Dedicated Customer Loss Payee in the insurance policy, which offers an extra level of insurance protection.

The partnership will transform future finance

Chief executive officer of BitGo, Mike Belshe, has commented on the partnership. He said the partnership with Amber couldn’t have come at a better time, as Amber group has a leading edge in crypto innovations. Belshe further stated that the team at Amber was carefully selected, and they are all seasoned professionals, which is why the partnership with the firm is great.

He further reiterated that BitGo would be providing the custody infrastructure, liquidity, and security necessary for the transformation of future finance via the collaboration.

The Chief executive officer of Amber Group, Michael Wu, has also commented on the development. He pointed out,

“As we scale our operations into more jurisdictions, we prioritize partnering with reliable and well-reputable infrastructure providers like BitGo.”

He further said that the Amber group’s daily operations require the successful implementation of rigorous security measures. The company must choose the right partner committed to asset protection more than anything else in the industry.

Amber was founded in 2017 and has grown to become a top crypto-finance service provider, with more than 200 institutional clients worldwide. It has received funds from institutional partners like Coinbase Ventures, Fenbushi Capital, Blockchain.com, Dragonfly Capital, and Polychain Capital.

Amber says it’s committed to bringing professionalism and more transparency to the cryptocurrency market.

Rumor: PayPal Exploring Acquiring Crypto Companies, In Talks with Bitcoin Custodian BitGo

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Author: Ali Raza

Millennials Are Not the Only One Driving “Further Demand” for Bitcoin: JPMorgan

Covering the steepening of cumulative flow trajectory in Grayscale Bitcoin Trust in recent weeks, JPMorgan yet again shared a bullish view on Bitcoin.

According to the largest investment bank, Bitcoin’s corporate endorsements, such as PayPal, have “propagated further demand” for the digital asset.

This can be particularly seen in the ascending of GBTC, which as per JPMorgan suggests that the demand for the leading digital currency is “not only driven by the younger cohorts of retail investors,” the millennials but also institutional investors that includes family offices and asset managers.

Institutional investors are actually the biggest investors in Grayscale’s products.

Grayscale Bitcoin Trust’s October flow trajectory was rather impressive because of the modest outflows seen in the flow trajectory of gold ETFs in comparison. JPMorgan wrote in its latest report,

“This contrast lends support to the idea that some investors that previously invested in gold ETFs such as family offices, maybe looking at bitcoin as an alternative to gold.”

In its last report, the bank noted that because of its competition with gold as an alternative currency, Bitcoin’s potential long-term upside is considerable, as much as 10x from the current level to match the total private actor investment in the precious metal.

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Meanwhile, the current rally has BTC near its “overbought levels,” which means a sell-off could be seen soon, noted the analysts.

Grayscale actually added $500 million in new assets under management in a single day that brought its total AUM at over $9 billion. As we reported, Q3 has been yet another record quarter for Grayscale with $1 billion in inflows.

Last week has been another explosive week for the company, as shared by its Managing Director, Michael Sonnenshein.

The world is choosing Bitcoin as a safe haven over other asset classes at a fast pace, which only puts further pressure on the supply side.

With Grayscale having record inflows, Square selling about double the number of Bitcoins that are being mined, and PayPal, which is 3x of Square and has “eager” customers, also joining in, things are going to get even more interesting.

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Author: AnTy

BlockFi Acquires a 5% Stake in the Grayscale Bitcoin Trust (GBTC), Becomes a Top Shareholder

BlockFi, the crypto lending focused firm, has invested in the Grayscale Bitcoin Trust (GBTC), becoming one of the biggest shareholders. According to a filing made with the U.S Securities Exchange Commission (SEC), the firm purchased 5.07% of the GBTC Trust. Notably, companies in the U.S are required to report through form 13G if they own more than 5% in another firm.

The filing further reveals that the shares acquired by BlockFi translate to 24,235,578 of the GBTC Trust. Going by the latest Grayscale annual filings, this value is roughly 24,235.578 Bitcoins, given that every share is priced at 0.0001 BTC. As per the prevailing crypto market prices, the BlockFi investment in GBTC is roughly $328 million.

GBTC has been operational since 2013, pivoted as a Bitcoin buying avenue without owning the underlying crypto themselves. Currently, the firm manages an AUM of over $6 billion, acquiring an SEC license earlier in the year. In recent months, its value has been growing exponentially, with Q3 inflows breaking record highs to hit the $1 billion mark.

The CEO of BlockFi, Zac Price, said that the move to invest in GBTC is part of an effort to serve their clients better,

“There are lending markets alongside investment opportunities related to the product, and our significant participation enables us to add value for our clients and the marketplace for liquid and illiquid GBTC shares.”

BlockFi is not the only crypto-focused firm that has acquired a significant share of the GBTC Trust; back in June, Three Arrows Capital bought 21,057,237 shares, roughly 6.26% of the total trust at the time.  

Also Read: BTC Potential Investors’ Market Increases by 52% to 32 Million in 2020: Grayscale Survey

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Author: Edwin Munyui

Grayscale Ethereum Trust (ETHE) Is Now SEC Registered; ‘Bullish’ for Ether

Grayscale announced a new milestone on Monday, its product Ethereum Trust (ETHE) has now officially become an SEC reporting company.

With this latest update, accredited investors who purchase Grayscale Ethereum trust shares will have an earlier liquidity opportunity. This means the holding period of these shares is now halved, reduced from 12 months to 6 months, the same as its bitcoin product Grayscale Bitcoin Trust (GBTC).

The digital currency investing company only offers its products to an accredited investor, an individual who earns income exceeding $200,000 or $300,000 together with a spouse or has a net worth of $1 million, alone or with a spouse.

Currently, ETHE shares are trading at $57, at a premium of nearly 55% to ETH price, drastically down from June’s premium of 950%.

According to trader and investor Alex Kruger, this development was what “helped ETH higher this morning,” and added, “This is bullish ETH as it reduces the lockup period for ETHE from 12 to 6 months.”

Today, Ether jumped over 3% and is currently trading at $387, pushing its YTD performance to 194%.

Around $390 is where trader Loomdart believes it is not “a bad place to punt an eth short.”

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Author: AnTy