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

Israeli Asset Manager Invests $100 Million in Bitcoin via GBTC

“A little intimidated” by the speed at which BTC gained in value, the firm has already sold one-third of its holdings after doubling its investment. Now holds $150 million GBTC shares.

Altshuler Shaham Investment House, an Israeli asset manager, invested $100 million in Bitcoin by purchasing the shares in the Grayscale Bitcoin Trust (GBTC) late last year, reported a local publication.

At the time, Bitcoin was trading around $21k; since then, the crypto asset has soared to a new ATH at $58,350.

Grayscale Investments is the world’s largest asset manager with north of $40 billion in AUM.

One of the largest investment managers in Israel, Altshuler Shaham, already sold some of its stake in early February when BTC price was around $40k, as co-CEO Gilad Altshuler said his group was “a little intimidated” by the speed with which bitcoin gained in value.

The price of Bitcoin has appreciated more than 13.5x in value since its March low, becoming a trillion-dollar asset. Still, the fund was able to double its investment before selling about a third of it. He said,

“This is a new investment for us. It took a few months until we got all the relevant approvals and all the opinions that approved our investment in the field.”

This is the first time an Israeli institutional body gained Bitcoin exposure. Altshuler Shaham had over $50 billion in assets in long-term savings associates’ accounts – provident funds and pension funds as of the end of January.

Currently, the company holds $150 million GBTC shares. As for increasing this investment, Altshuler said, “It depends on the price.”

Meanwhile, investment company Altshuler Shaham Horizon, a subsidiary of Altshuler Shaham, is looking to expand into the cryptocurrency market.

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Author: AnTy

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

Central Bank of Nigeria Prohibits Banks to Deal with Crypto’s which Became Popular in EndSARS Protests

Central Bank of Nigeria Prohibits Banks to Deal with Crypto’s which Became Popular in EndSARS Protests

Binance has already disabled deposits while citizens of Africa’s largest economy object to CBN’s decision.

The Central Bank of Nigeria (CBN) has ordered banks and other financial institutions to immediately close accounts interacting with cryptocurrencies.

According to the circular sent by the central bank of Africa’s largest economy, such deals are “prohibited,” and failure to comply with the directive will result in “severe regulatory sanctions.”

The bank regulator has ordered deposit money banks, non-bank financial institutions, and other financial institutions to “identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”

In 2017, CBN said it would not license cryptocurrencies, and any crypto transactions would be outside the protection of the law.

Back in September, the country’s Securities and Exchange Commission also said it would regulate trade in digital assets to provide investor protection.

Interestingly, the anti-crypto stance from CBN comes after protests in October against SARS, excesses of the police’s Special Anti-Robbery Squad, saw the organizer accepting Bitcoin for funding following the government blocking local payments platforms from accepting donations.

“There’s a direct line that can be drawn from the EndSARS protests — which carried on partly with funding from cryptocurrency even though CBN restricted several accounts — to these latest regulations,” said Joachim MacEbong, a senior analyst at SBM Intelligence in Lagos.

“This latest instruction will end up making the case for cryptocurrency adoption better than any other argument. One promises freedom, while the status quo only reinforces restrictions,” MacEbong added.

According to Paxful, Nigeria recorded the world’s second-largest Bitcoin by peer-to-peer trading volume in 2020.

Leading spot exchange Binance has disabled deposits “to prevent more NGN coming in,” after receiving notice from their channel partners, shared exchange CEO Changpeng Zhao “CZ” on Twitter.

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Author: AnTy

Tether FUD: USDT is Regulated and Market Manipulation Accusation is Just “Nonsense,” says CTO

Tether, which has grown to nearly $25 bln market cap, is following the law, collaborating with the regulators, and registered with FinCEN, said Paolo Ardoino.

While the market has been making new highs, some people are still keeping to the same old FUD.

The oldest FUD lately permeating the cryptocurrency market is Tether (USDT), the popular and dominant stablecoin. With the Treasury proposing rules and regulations related to the fiat-backed cryptos and the SEC suing XRP, the market expects more action from regulators.

However, people calling out for Tether to be targeted next is not happening as Paolo Ardoino, CTO at Tether and its sister company Bitfinex, a crypto exchange, explained,

“Tether is registered and regulated under FinCEN as all the centralized competitors. Strict KYC/AML is applied to all Tether direct users, as the other main issuers are doing. Less regulated is just FUD.”

However, this hasn’t stopped people from speculating and voicing their concerns on Crypto Twitter (CT), which, according to the people involved with Tether, are baseless.

Tether came into existence to solve the issue of discrepancy in Bitcoin prices between different exchanges and making spreads more like traditional finance. USDT also cut down the time-consuming process of wire transfers.

Tether’s market cap has grown 6 fold in the last ten months to nearly $25 billion from $4.2 billion in April 2020.

During the 2017 bull market, Tether became big, and all the speculation around the stablecoin backing and legitimacy brought NYAG into the picture.

Tether is currently under investigation by the New York Attorney General (NYAG), but it is not for ‘pumping Bitcoin; rather, it is accused of co-mingling client funds and losing $850 million of them without disclosing any of this information to the public. This leads to Tether not being fully backed by cash reserves.

As for manipulating the market by printing Tether, it is all “nonsense” because Tether is issued when a counterparty makes a wire payment, said Ardoino on Peter McCormack’s podcast, What Bitcoin Did.

According to him, the growth of Tether is just driven by the actual demand of Tether’s market, so the entire manipulation thing is nonsense. He further added that during the last bull run, crypto saw a “boom of interest in retail that made the crypto going balloon,” and that’s just it.

Trader and economist Alex Kruger says that while the “NYAG argues tethers are a commodity,” the whale Tether drama doesn’t have any market impact.

Recently, the lending rates on Bitfinex went to 7% per day, which led many people to speculate that the company is run out of USDT.

However, it is USD that it ran out of because of “big users re-balancing their longs against USD,” clarified Ardoino. Also, the accounting delay, along with the massive size, can cause a delay in the lending books.

Overall, Tether is following the law, collaborating with the regulators, and registered with FinCEN, said Ardoino.

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Author: AnTy

Ripple Partner MoneyGram ‘Doesn’t Utilize ODL or RippleNet’ Despite Being Paid Millions in XRP

Ripple Partner MoneyGram Says it ‘Doesn’t Utilize ODL or RippleNet’ for Which it was Paid Millions in XRP

“It’s still business as usual,” says Ripple CEO, maintaining that the company remains “on the right side of the law and of history.”

Amidst the ongoing distancing from XRP, Ripple partner MoneyGram also issued a statement.

“The Company has not currently been notified or been made aware of any negative impact to its commercial agreement with Ripple,” said MoneyGram, one of the largest companies involved in cross-border P2P payments and money transfer.

The statement came in light of the recent lawsuit filed by the U.S. Securities and Exchange Commission against Ripple Labs Inc.

“MoneyGram is not a party to the SEC action,” said the company adding, they will continue to monitor for any impact as things unfold.

MoneyGram came into a commercial agreement with Ripple in June 2019 to use the fintech’s foreign exchange (FX) blockchain trading platform, On-Demand Liquidity (ODL) for the purchase or sale of four currencies. For this, Ripple paid millions of dollars in XRP to MoneyGram. However, the company revealed that, as a matter of fact,

“MoneyGram does not utilize the ODL platform or RippleNet for direct transfers of consumer funds – digital or otherwise.”

Throughout this collaboration, MoneyGram actually continued the use of other traditional FX trading counterparties and says it “is not dependent on the Ripple platform to accomplish its FX trading needs.”

“There were a discussion on Twitter about precisely how MoneyGram used ODL, other ways they could use it, and the advantages and disadvantages of each mechanism,” commented David Schwartz, CTO of Ripple on MoneyGram distancing itself from the company.

This week, XRP got into hot water as the SEC charges Ripple and its two executives, board member and former CEO Chris Larsen and current CEO and board member Brad Garlinghouse for allegedly selling unregistered securities.

This resulted in the price of the digital asset crashing more than 60% and taking the entire crypto market down with it, only to recover the gains to trade around $0.30 XRP -6.52% XRP / USD XRPUSD $ 0.30
-$0.02 -6.52%
Volume 9.97 b Change -$0.02 Open $0.30 Circulating 45.4 b Market Cap 13.43 b
6 h Ripple Partner MoneyGram Says it ‘Doesn’t Utilize ODL or RippleNet’ for Which it was Paid Millions in XRP 10 h Oldest Crypto Exchange Bitstamp to Suspend XRP Trading & Deposit on Jan. 8 2 d XRP Carnage Begins as the Delisting Commences
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All of this also resulted in the suspension of XRP trading and deposits on several trading platforms. Just yesterday, the oldest crypto exchange Bitstamp suspended the XRP services for its US customers, starting January 8.

OSL, Beaxy, and CloseTowers are other exchanges that suspended XRP trading on their platform while Bitwise Asset Management also liquidated its position in the digital asset.

Garlinghouse meanwhile, maintains that Ripple remains “on the right side of the law and of history.”

“It’s still business as usual,” said Ripple CEO in a publicly shared note sent to the company’s employees this week.

“The SEC is completely wrong on the facts and law and we are confident we will ultimately prevail before a neutral fact-finder.”

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Author: AnTy

Top US Financial Regulators Call for On-Chain Stablecoin KYC

US regulators’ parting shots keep on coming, which has “zero chance” of becoming an “enforceable rule of law any time soon.”

Top US financial regulators issued a statement calling for on-chain stablecoin KYC.

The latest statement came just a few days after the fiasco of FinCEN’s proposal to extend anti-money laundering (AML) regulation to non-custodial wallets, for which the regulator is now accepting public comments with a deadline of January 4.

Now, regulators are back with their AML rules which now target stablecoins. In a statement on Wednesday, the Treasury Department and other agencies said,

“[Stablecoins] should have the capability to obtain & verify the identity of all transacting parties, including for . . . unhosted wallets.”

The regulators want the stablecoin to be used in a way that manages risk and maintains the stability of the financial and monetary systems. Jake Chervinksy, General Counsel at Compound Finance said,

“There’s exactly zero chance this becomes an enforceable rule of law any time soon. This is just more of Secretary Mnuchin’s personal views coming out on pretty-looking stationery before his tenure ends.”

The statement is released by the President’s Working Group on Financial Markets, whose members include the Federal Reserve, the heads of Treasury, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

In its comprehensive statement, the group says that stablecoins may be securities, commodities, or derivatives, depending on the specific qualities of a particular asset.

And when these fiat-backed cryptos are used for retail payments and at a “significant scale” in the US, “the associated risks may require additional safeguards,” the regulators said.

The group further said that the backers of stablecoins should obtain and verify the identities of all parties involved in a transaction. Also, they need to have “strong reserve management” to handle large-scale redemption.

The members also acknowledged that stablecoins have the potential to enhance efficiency, lower costs, increase competition, and foster broader financial inclusion. Treasury Deputy Secretary Justin Muzinich said,

“The statement reflects a commitment to both promote the important benefits of innovation and to achieve critical objectives related to national security and financial stability. Regulators will continue to look closely at stablecoin arrangements, and look forward to a future dialogue on these issues.”

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Author: AnTy

Bitcoin’s the Most Crowded Trade After Long Tech and Short US Dollar: BoA Survey

Bitcoin’s over 170% YTD rally has everyone rushing in, which makes it one of the most crowded trades of December 2020, according to Bank of America (BOA).

The investment banking giant revealed its latest survey findings, according to which about 15% of fund managers with $534 billion under management said Bitcoin is the third-most crowded trade.

The first spot was taken by long technology shares and the second – shorting the US dollar. The survey was taken between Dec. 4 and Dec. 10. Longing corporate bonds and gold are also among the most crowded trades.

“At a market cap of $360B in a world of $17T negative-yielding debt, by definition, BTC is not the most crowded trade,” noted analyst Qiao Wang.

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The largest cryptocurrency surged to its all-time high at the beginning of this month after rallying more than 80% in October and November. Following the strong rally, Bitcoin has taken to ranging this month only to rally to over $20,800 today.

The rally was particularly started by Square making a $50 million investment in Bitcoin, after MicroStrategy’s big bet on the digital asset, which has now gone well above $1 billion. PayPal announcing support for cryptocurrencies also helped push the price of them higher.

All of this has brought the attention of the mainstream firms to the crypto market. From legendary investors like Paul Tudor Jones, Stanely Druckenmiller, and Bill Miller, to Guggenheim Partners, MassMutual, and many others, everyone is onto Bitcoin this year.

These investments are actually “laying out the groundwork for how you add Bitcoin to your balance sheet, how you should think about Bitcoin as a substitute for cash,” said New York-based CoinFund’s managing partner, Seth Ginnis, in a webinar this week.

This is evident from the fact that the market is being driven by North American institutional investors, as per Philip Gradwell, the chief economist at Chainalysis.

And still, as JPMorgan said, Bitcoin’s institutional adoption has just begun.

JPMorgan’s recent report said that the $100 million Bitcoin investment by insurance behemoth means the leading cryptocurrency could see $600 billion in additional demand.

Ginns also reported seeing a lot of interest from hedge funds and getting calls from pension plans, endowments, family offices, and foundations, suggesting the continued trend of broader institutional adoption next year.

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Author: AnTy

Andre Cronje’s Yearn.Finance Confirms Fifth Partnership with DEX SushiSwap

It’s another day and another merger for Yearn.Finance, which just notched up its fifth major collaboration in a week.

In a blog post from yesterday, yearn founder Andre Cronje confirmed that the decentralized finance (DeFi) protocol had collaborated with decentralized exchange (DEX) SushiSwap.

Overlapping Developments and a Path Forward

SushiSwap is a fork of DEX Uniswap. In his blog post, Cronje explained that Yearn and SushiSwap had overlapped in recent developments. SushiSwap has expanded on its automated market maker (AMM), and Yield has broken bonds with its money market and yield strategies. With so much overlap in the systems, Cronje claimed that they could take their relationship to the next level.

Under the new merger, both protocols have agreed to share resources. The total value locked in both protocols will also increase, and the collaboration will see Yearn strategies use SushiSwap going forward.

Also prominent in the new marriage is that SushiSwap will help Yearn launch Deriswap, a new product from Cronje. Announced last week, DeriSwap is a protocol that combines different aspects of DeFi. It focuses primarily on options, swaps, futures, and loans. While Cronje offered scant details about the protocol, he pointed out that it would use the standard Uniswap contract, with liquidity providers offering ETH-BTC. When traders swap tokens, liquidity providers earn fees.

Beyond the developments already laid out, Cronje also highlighted that users would need to vote on several new ones. These include Yearn participating in SushiSwap’s governance and adding SUSHI tokens to its treasury and vice versa. Developers are also proposing grants for Sushi contributors, which will be paid via yGift, and more.

Yearn’s Landmark Week

This appears to be the one merger that doesn’t have to do with any other announced by Yearn Finance in the past week. So far, Yearn’s SushiSwap collaboration is it’s fifth in a week, demonstrating the protocol’s seriousness about expanding its footprints across the DeFi space.

Yesterday, the lending and savings protocol Akropolis confirmed that it had partnered with Yearn to develop its operational strategies.

The protocol will benefit from the expanded Yearn ecosystem, including names like lending protocol Cream and insurance market coverage provider Cover.

Yearn is expected to benefit from Akropolis’ business development infrastructure and institutional contacts. Akropolis will deprecate AkropolisOS and Spark, two of its products that aren’t related to yield farming. Both products will be moved to open-source development and incorporate front ends to allow professional traders to access the new ecosystem from Akropolis and Yearn.

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Author: Jimmy Aki

Ethereum Classic Labs Rolls Out Wrapped ETC (wETC); Opening Up The DeFi Marke

Ethereum Classic has announced the launch of wrapped ETC (wETC) to act as a gateway to the Ethereum blockchain, which today is a major playing field of Decentralized Finance (DeFi) applications. The announcement, which came on Wednesday, means that ETC users will have seamless access to the DeFi ecosystem without converting their tokens.

Recent months have seen the DeFi space grow exponentially as more stakeholders bet on its long term value. Unsurprisingly, the trend is catching with other crypto projects, including BTC, which already found its way to DeFi through wrapped Bitcoin (WBTC). In fact, DeFi Pulse metrics show that WBTC is the second most locked asset in the $13.5 billion DeFi TVL.

ETC Joins the Ethereum DeFi Bandwagon

The recently released wETC is an ERC-20 token, hence compatible with the Ethereum blockchain and DeFi applications, ranging from DEXes, lending, and derivatives. Basically, ETC users will now be able to stake their tokens on Ethereum and leverage the varied DeFi services within the ecosystem. ETC Labs CEO and Co-founder James Wo said that the milestone would at least attract 10% of ETC holders,

“We wanted to make sure ETC could go to a different ecosystem and use different applications on top of that ecosystem … I expect at least 10% of ETC holders will want to participate and use wETC.”

Notably, Ethereum Classic emerged from the Ethereum 2016 hard fork, triggered by the DAO hack. It now appears that the two communities are ready to work together despite Wo’s stance that ETC will maintain a Proof-of-Work consensus as Ethereum shifts to a Proof-of-Stake mechanism,

“Not everyone trusts PoS. Some projects believe in PoW … So I think some of the ecosystems will probably stick to ETC or other PoW versions of a blockchain that can make smart contracts.”

The Token Wrapping Concept

As the blockchain and crypto industry evolves, interoperability solutions have been at the forefront of most innovations. The concept of wrapping tokens and using them on a different blockchain has changed the industry, especially with the growth of an ecosystem like Ethereum. Basically, this involves issuing a blockchain asset such as Bitcoin on a different blockchain-based on a 1:1 representation.

The wrapped crypto asset can then perform various functions given its compatibility with a particular blockchain ecosystem. In the wETC case, users will transfer their wrapped tokens to the Ethereum blockchain via chainbridge, an interface for both ecosystems. A similar amount will be minted for use within the Ethereum ecosystem, after which they will be destroyed when users convert their tokens back to ETC.

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Author: Edwin Munyui