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

Grayscale’s Trust Shares Are Trading At Huge Premiums, Arcane Research Reports

  • Grayscale Trust shares are currently trading at a ‘huge’ premium showing an increasing demand in crypto across the U.S.
  • In a report by blockchain research firm, Arcane Research, the ballooning monetary and fiscal policies in the U.S. could be the driver to increasing demand in these digital products.

In a report published by Arcane Research on the current state of the institutional crypto investment fund, Grayscale Trust, there is an increasing demand for Bitcoin (BTC) across the U.S. as inflation grows. Throughout 2020, the Fed has undergone several expansionary monetary policies (increasing dollars in the economy), which has forced investors to look towards cryptocurrencies as a barrier against inflation.

Grayscale offers publicly tradable shares with crypto as the underlying asset. Currently, the platform holds over $5 billion in digital assets, which is important as demand from U.S. investors grows. However, these shares are trading at an obscene premium, deviating wildly from actual asset prices. In the past month, Bitcoin, Bitcoin Cash, Litecoin, and Ethereum Trust funds have been trading at a “huge premium.”

The Grayscale Bitcoin Trust (GBTC) holds over $5 billion in assets, roughly 2.3% of the total value of BTC in circulation. Astonishingly, GBTC is trading at a 23% premium compared to BTC’s current price, as demand from retail investors increases. Ethereum Trust (ETHE) holds approx. 1.8% of all ETH in circulation ($873 million AuM), trading at 93.7% premium to the net asset value.

Grayscale’s Litecoin Trust (LTCN) and Bitcoin Cash Trust (BCHG) shares publicly launched three days ago following the April 2018 launch to private accredited investors.

As of Thursday, the LTCN shares were trading at a 753% premium to LTC’s price, with BCHG shares trading at a 351% premium. However, the premium in BCHG has been falling since launch as demand and arbitrage are wiped away from the pair, comparative to LTCN shares.

An Arbitrage That Doesn’t go Away

As mentioned above, such premiums should be arbitraged away. GBTC, for instance, has been trading around 7-40% premiums for the past year, showing a possible broken market. Arcane Research explains the main drivers for these premiums staying out on the market with three main drivers.

First, Grayscale’s products bought by accredited and high net worth clients, are locked up for a period before they are released to the secondary market. On the public market, these investors seek “compensation” for the lockup period.

Second, these funds are the only way U.S. investors can publicly trade cryptocurrencies through their 401k investments. This increases the demand, and hence the price for these assets.

Investors are also safeguarding themselves from the aggressive quantitative easing policies being implemented by the Fed. With an increasing debt-fueled bubble, investors are moving to crypto-assets to prevent the washed value of dollars from the impending inflation.

Finally, a considerable number of these investors may not be aware of the premiums they are paying for hence fueling the prices of the Grayscale Trust shares.

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Author: Lujan Odera

Grayscale Receives FINRA Approval to List Bitcoin Cash and Litecoin on The Stock Market

Grayscale Investments’ two more products, Grayscale Bitcoin Cash Trust and Grayscale Litecoin Trust, have received approval from FINRA for public quotations under the ticker BCHG and LTCN on OTC Markets.

With this move, both Bitcoin Cash (BCH) and Litecoin (LTC) will be trading on the public stock market for the first time.

The New York-based digital currency asset manager announced on Monday that regulators had given the go-ahead for the sale of its two products, covering two new cryptos to the public.

The company that makes digital assets available in the form of stocks will make these new productions available to the general public in the next two to four weeks.

Grayscale stocks trade on OTCQX, an over-the-counter (OTC) market that is overseen by regulator FINRA, and here securities do not need to be registered with the SEC.

More options for institutional investors

Grayscale’s crypto products amount to shares in a trust that holds the underlying digital asset.

With this approval, institutional investors are now able to get exposure to these two crypto assets that Grayscale sells in the forms of shares, which, as we have seen in the case of both Bitcoin and Ethereum results in a significant premium to the underlying asset. Grayscale’s managing director, Michael Sonnenshein said,

“Grayscale builds investment products that operate within existing regulatory frameworks. With two additional products gaining approval for public trading, we’re broadening access for investors to gain exposure to the digital currency asset class.”

In its Q2 2020 report, Grayscale shared that it had the largest quarterly inflows ever at $905.8 million. Not only GBTC and ETHE saw record inflows, but Grayscale Litecoin Trust saw its largest inflows to date as well. Also, Grayscale Bitcoin Cash Trust recorded its largest inflows since Q2 2018. The report read,

“After a period of slow growth, Grayscale Bitcoin Cash Trust and Grayscale Litecoin Trust have seen a marked uptick in investor interest. The two trusts combined have now reached over $20 million in inflows since inception.”

With this, the total number of digital assets available to the public as shares have come to six. Already, Grayscale’s bitcoin product has found a special place among millennials investors on apps like Robinhood. Also, a Charles Schwab report from December stated that the Grayscale Bitcoin Trust (GBTC) was one of its top five equities held by millennials, even ahead of Netflix.

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Author: AnTy

Wilshire Phoenix Keen to Launch New Bitcoin Commodity Trust Pending SEC Approval

  • Wilshire Phoenix to start offering BTC via a new Bitcoin Trust according to their latest SEC filing. The Trust will be offered to a select clientele with a max average of $2 million or 80000 shares. They haven’t experienced a smooth sailing with SEC as their proposed BTC ETF’s were rejected by SEC on several occasions

The Securities and Exchange Commission (SEC) has now revealed that Wilshire Phoenix intends to launch a new BTC Commodity Trust. This was according to a filing they made to the SEC’s pending approval.

The Wilshire Phoenix are in the process of applying for rights to offer Bitcoin to a select group of clients. The trust will accept a max proposed average of 80000 shares equivalent to $2 Million. The trust would enable clients who own Bitcoin a cost-efficient mode by mitigating some policies deemed too harsh in place for digital asset markets.

This will pit them against industry heavy weights, Grayscale Investments armed with a $3.6 billion warchest. Affiliates of the Digital Currency Group, have been in operation since 2013 but have since filed an application to convert the trust into an SEC reporting company.

The application further discloses that the primary custodian of the Bitcoin will be the Fidelity Digital Asset Services with cash deposits being held at the UMB Bank. The cash deposits will be FDIC insured with BTC holdings being insured against theft for up to $100million.

The Administrator of the trust will then be tasked with determining the exact value of the trust on daily basis at 4.00 pm Eastern time. This will be worked out by multiplying the amount of Bitcoin held in the reserve against the current BTC price

Their Latest ETF Bid Rejected by The SEC

Notably, Wilshire Phoenix had their latest Exchange Traded Fund (ETF) bid rejected by the SEC in February. In a 76-page dossier the SEC highlights that the main objection to the ETF bid was that they needed to protect the investors from risky markets and potential market manipulation.

However, Commissioner Hester dubbed crypto mom differed with the ruling. She was especially worried that the SEC was sending the wrong message to potential investors opting for friendlier jurisdictions, as it had rejected Wilshire Phoenix’s ETF bids on multiple occasions. They have rejected over 12 Bitcoin ETF applications over the past 2 years.

Latest Bitcoin Price News and Crypto Market Updates

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Author: Lujan Odera