Category: Bitcoin

Categories
Bitcoin Crypto News Ethereum

ETH Eclipses All-Time High, Big Surge Ahead?

While Bitcoin is breaking price barriers and hovering above US$63,000, the second-largest cryptocurrency by market cap, Ethereum, surpassed the US$4,000 mark for the first time since May 14 and briefly surged past its previous all-time high, reaching US$4,360.

The ETH rally started on October 20 by surging 5 percent, reaching the US$4,100 mark on the Binance exchange and at the time of writing, is up 47 percent over the past 30 days. Despite a correction following the new all-time high, ETH remains up over 12 percent over the past week.

The ETH bull run coincided with Bitcoin’s dramatic market boost of 30 percent in a month, breaking a record price of US$67,016 on October 20.

Additional data from Crypto Watch shows a 30-day correlation between Bitcoin and Ether of 0.82 – an 82 percent linear positive correlation between both cryptocurrencies. This means that as Bitcoin enters price discovery, ETH could follow and settle to even higher highs.

ETH and BTC Frontrunning Crypto Scene

Ether had a volatile rally throughout Q2 2021, bouncing back and forth from 3k to 2k. It was on August 4 that ETH reclaimed and held steady its 3k position, reaffirming its market dominance with the launch of DeFi protocols and NFT projects.

Several factors are driving the current ETH bull run, among them the massive popularity of non-fungible tokens (NFTs), the emergence of new and innovative DeFi protocols, and the US’ first Bitcoin futures ETF.

The Bitcoin futures fund recorded astronomical trading volumes: around US$500k in just an hour after going live, and over $1 billion a day after. The institutional demand has been so high that the BTC ETF is on risk to breach a limit on the number of futures contracts it is permitted to hold on the Chicago Mercantile Exchange, as per data compiled by Bloomberg.

Categories
Bitcoin Crypto News Regulation

Bitcoin Futures ETF Records $1 Billion in Trading Debut

The first US-based Bitcoin exchange-traded fund (ETF) has finally listed and surpassed all expectations. ProShares Bitcoin Strategy ETF, trading under the ticker $BITO, recorded a historic US$1 billion in its first day of trading, easily the biggest day one of any ETF in terms of ‘natural’ volume.

 

Since ProShares’s Bitcoin (BTC) futures ETF listed on the New York Stock Exchange on October 19, it has been met with explosive interest. The news comes soon after Jacobi Asset Management, a London-based multi-asset investment manager, announced it had received approval to launch the first European Bitcoin ETF.

Biggest Day One Recorded

$BITO has had the biggest first day in terms of ‘natural’ trading volume and has also traded more than 99.5 percent of all ETFs, according to Bloomberg ETF correspondent Eric Balchunas.

Futures, and Not Spot ETF

Interestingly, $BITO listed on the New York Stock Exchange, not after approval from the US Securities and Exchange Commission (SEC) but rather due to the SEC’s lack of objection within 75 days of the initial application.

$BITO will not provide any direct exposure to the BTC spot price. In usual instances, when you buy a regular ETF, the value of the share is based on the price of the asset underlying the fund. However, in the case of a futures ETF, a number of additional factors may lead to the price of the shares diverging from the asset.

The narrative surrounding ETFs has always been that if granted, a Bitcoin ETF would open the door for many new participants who are otherwise not interested, nor able to navigate the complexities of entering the world of cryptos. Accordingly, an ETF would then expose institutional and retail investors to BTC in a simple, trusted and familiar way.

Moving in the Right Direction

Although $BITO or any other futures-based ETF will not entirely allow for the traditional narrative of ETFs, it is certainly a step in the right direction. While $BITO does give BTC more recognition and credibility, it has been suggested that the futures-based ETF will ultimately act as a bridge for others to launch spot market-based ETFs.

Following the launch of the ProShares ETF, it has been reported that Valkyrie Bitcoin Strategy ETF may also commence trading early next week. As all eyes are on the company, most focus has however been on Twitter as the ETF’s ticker symbol, in an apparent nod to the community, changed from $BTF to $BTFD, or ‘buy the f*cking dip’.

Categories
Bitcoin Investing Trading

True Story: Pending Bitcoin ETF Has Ticker Symbol, ‘Buy The F*cking Dip’

Hot on the heels of the Proshares Bitcoin Futures ETF that went live yesterday, Bloomberg has reported that the Valkyrie Bitcoin Strategy ETF may commence trading as early as next week. Much of the focus on Twitter has been directed towards the ticker symbol, which in an apparent nod to the community, mysteriously changed from $BTF to $BTFD, or ‘buy the f*cking dip’.

Ticker Symbol Change – Intentional?

In August this year, Valkyrie Funds applied for an ETF but notably omitted a ticker symbol at the time:

Ticker symbol missing from August application. Source: SEC

Then just yesterday, Bloomberg ETF correspondent Eric Balchunas tweeted an image of Valkyrie’s application saying that listing on the NASDAQ with the ticker symbol $BTF appeared imminent:

Ticker symbol BTF. Source: Eric Balchunas

Then, strangely without explanation, the ticker symbol appeared to be changed to $BTFD, which was spotted by eagle-eyed investors watching Bloomberg’s terminal:

$BTFD ticker symbol. Source: Bloomberg

Is this some sort of cruel joke or a smart route to win over sceptics? Probably the former, but we won’t know until it is actually listed.

Valkyrie ETF, Also Futures-Based

The Valkyrie ETF is much like the Proshares ETF in the sense that it is futures-based, not based on the spot price of bitcoin.

If listed this week, the Valkyrie ETF would successfully have managed to skip a growing queue of applicants, largely on account of it being a first-time issuer. This appears to align with a statement by NASDAQ.

A list of outstanding ETF applications was published some time ago by Bloomberg and it will be interesting to see how many of these are approved this month.

Outstanding Bitcoin ETFs. Source: Bloomberg

In any event, the real celebrations by Bitcoiners, if any, are likely to be reserved for when a true spot bitcoin ETF is approved.

Categories
Bitcoin Crypto News Markets Trading

On-Chain Metrics Paint a Pretty Picture, Bitcoin All-Time High Imminent?

Bitcoin is looking set to reach another all-time high. The momentum in the market has become stronger as investors react positively to the potential impact of the first US Bitcoin futures ETF, which launched on October 19.

Already, bitcoin was trading at US$63,451 shortly after the ETF (symbol: BITO) went live on the New York Stock Exchange, raising 99.02 percent of all bitcoin supply into profit. 

The current state of the Bitcoin market is looking bullish on-chain as well. Several metrics are suggesting the rally is about to kick in, which could take the price to another record level. 

Whales Are Still Buying Bitcoin 

Deep-pocketed bitcoin investors are among those positive about the future price of the leading cryptocurrency, and this is bullish because there won’t be significant selling pressure from them, at least in the meantime.

Whales have been accumulating a huge chunk of bitcoin since last month. On-chain analytics platform Santiment recently reported that the number of whales holding between 100 to 1,000 BTC increased by 1.9 percent (254) over one month. Interestingly, whale activities are just one of the factors contributing to the growth of bitcoin’s price. Active addresses on the BTC network have also risen, which indicates strong network usage. 

Recently, Capriole Investments founder Charles Edwards also pointed out that bitcoin’s MVRV z-score had reclaimed 3.0, which usually leads to a notable increase in price. MVRV z-score measures the market value’s relative position to realised value, whereby an increase in the score suggests bitcoin is overvalued while a lower score shows otherwise. 

But LTHs Are Spending

Despite the bullish metrics, there’s still a need to keep a watchful eye on the market given that long-term holders (LTHs) are beginning to spend, according to Glassnode. The LTH Net Position Change is starting to decline, meaning some of those LTHs are starting to realise a profit. 

Notwithstanding, their current position is still positive. On October 14, Crypto News Australia reported that LTHs were HODLing more than 70 percent of all bitcoin in circulation, and their accumulation rate had grown 12.7x.

Historically, Q4 has mostly proven favourable for bitcoin, but it remains to be seen if this quarter can be counted as one. 

Categories
Bitcoin Institutions Investing

Europe’s First Bitcoin ETF Launches, Bullish News for Institutional Investors

Jacobi Asset Management, a London-based multi-asset investment manager, recently announced it had received approval from the Guernsey Financial Services Commission (GFSC) to launch Europe’s first Bitcoin ETF (exchange-traded fund).

Bullish News For Institutional Investors

Jacobi announced on October 15 that it had the go-ahead to launch what it calls a “first tier one” Bitcoin ETF, thus termed to reflect the high-profile partners supporting it:

As per the press release, Jacobi plans to list the fund on Cboe Europe, one of the largest pan-European equity exchanges, while it’s pending for approval by the Financial Conduct Authority (FCA).

The fund will be open only to institutional investors once it goes live, with a 1.5 percent management fee. Fidelity Digital Assets will be the custodian of the fund, giving investors enterprise-grade custody to safely invest in digital assets.

Bitcoin ETFs Are Now a Reality

Bitcoin Exchange-Traded Funds were thought of as something impossible in the infancy of the crypto industry, but now we have several countries hosting them. The first countries to do so were Canada (which now has three BTC ETFs) and Brazil.

Jacobi was launched in May 2021 and is directed by CEO Jamie Khurshid, a former Goldman Sachs investment banker. Talking about the fund, Khurshid said:

We are excited to be launching a new secure, transparent and accessible product to track the performance of Bitcoin. This is an exciting moment for Europe as regulatory approval comes ahead of those waiting for a decision from the US Securities and Exchange Commission.

Jamie Khurshid, CEO, Jacobi Asset Management
Categories
Bitcoin Crypto News Regulation

Mixed Reactions as SEC Approves Bitcoin Futures ETF

The much-anticipated first US-based Bitcoin exchange traded fund (ETF) has arrived with a mix of both excitement and controversy. Pending no last-minute regulatory interference, the ProShares bitcoin futures-based ETF is expected to go live later today.

While some have celebrated the news, others are more sceptical:

Futures, Not Spot ETF

Last Friday, ProShares filed a post-effective amended prospectus which stated its intentions to list the ETF on Monday, October 18, under ticker $BITO. It is now confirmed that it will instead formally list later today on the New York Stock Exchange. Interestingly, when listed, it won’t be due to formal approval from the SEC but rather, due to the SEC’s lack of objection, within 75 days of the initial application.

Critically, however, $BITO will not provide direct exposure to the bitcoin spot price:

The Fund seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts. The Fund does not invest directly in bitcoin.

ProShares, SEC statement

Ordinarily when you buy a regular ETF, the value of the shares is based entirely on the price of the underlying asset. However, when you buy a futures ETF, a host of other factors could lead to the price of the shares diverging from the asset. This creates opportunities such as the “contango trade”, where professional traders are able to exploit opportunities between the futures and spot prices.

Who Benefits From a Futures-Based Bitcoin ETF?

Since the Winklevoss twins’ bitcoin ETF was first rejected in 2013, the narrative has always been that, when granted, a bitcoin ETF would open the door to a host of new participants who are otherwise not interested in dealing with the complexities of self-custody. An ETF, the argument goes, would enable institutional and retail investors to gain exposure to bitcoin in a simple, trusted and familiar format.

The futures-based ETF doesn’t do quite that, but it is no doubt a step in the right direction. While it provides bitcoin with increased recognition and greater credibility, some have suggested that the futures-based ETF will ultimately act as a bridge for others to launch a spot market-based ETF. Despite “broadening the bitcoin tent”, the futures-based ETF has met with criticism from some unlikely sources.

Raoul Pal, a former Goldman Sachs hedge fund manager, appeared to be defending retail investors in his scathing take on Twitter, saying that hedge funds would “make a fortune out of this”:

This vehicle means that the arbitrager takes their slice, the ETF provider takes their slice, the lawyer who set up the fund takes their slice, the administrator, the auditor … I mean, everybody is taking a slice out of your pie.

Raoul Pal, Real Vision

Others, “toxic maxis” such as Bitcoin Tina, were less charitable in their assessment:

Despite Canada and Brazil both having bitcoin ETFs, a US-based ETF with direct exposure to bitcoin’s price remains outstanding. While approval is expected in 2021, the overall sense of regulatory hostility towards the crypto sector suggests that it isn’t necessarily a sure thing.

Categories
Australia Banking Bitcoin Crypto News Cryptocurrency Law Trading

Precedent Set? ANZ Settles Debanking Case Brought by Bitcoin Trader

Allan Flynn, crypto trader and owner of Australian local exchange BitcoinCanberra, has settled his first complaint with the ANZ bank after being debanked because of his occupation as a digital currency exchange (DCE).

The bitcoiner announced the settlement in a Tweet late last week:

Flynn had lodged a claim against two of Australia’s biggest banks 20 months earlier after both had debanked him. The claim with ANZ has been settled but another continues with Westpac, to be heard later this week.

Understanding Debanking

‘Debanking’ is a recently coined term that refers to the process in which financial institutions, such as retail banks, cease delivering services to customers for whatever reason. Flynn was debanked by ANZ and Westpac based on his occupation as a crypto trader and for offering trading services to clients. Flynn alleged his human rights had been discriminated against because he ran a crypto operation.

ANZ released a statement in which it said:

ANZ acknowledges that it closed Mr Flynn’s accounts because it detected he was operating a DCE (digital currency exchange), and without seeking information from Mr Flynn about the particular circumstances of his DCE business, including the ML/TF (money laundering/terrorism financing) risks and policies of that business.

ANZ statement

At the moment, ANZ and other major financial institutions in Australia refuse to bank with operators of DCEs due to concerns of non-compliance with money laundering and terrorism financing risks.

Aussie Businesses Being Debanked

Flynn’s case is no longer unique, and people are starting to wonder about the motives behind debanking. Last month, Fintech Australia CEO Rebecca Schot-Guppy and 150 members of her organisation had been debanked with no apparent cause or means to appeal.

Michaela Juric, founder of Bitcoin Babe, has said that her banking services had been terminated 91 times since establishing her crypto brokerage firm seven years ago. Juric stated that some of her family members had also been affected, making it difficult for them to access utilities such as electricity, internet, water and insurance.

Local Australian brokerage Aus Merchant has been debanked four times in the past year. Managing director Mitchell Travers has concluded that anti-competitive practices might have been the true motive behind these decisions.

Categories
Australia Bitcoin Crypto News Cryptocurrencies Ethereum Scams

Alex Saunders Ordered to Pay $500,000 by Default for Unpaid Crypto Loans

Former influential cryptocurrency influencer Alex Saunders has been ordered by the Supreme Court of Victoria to pay upwards of A$500,000 to one of his followers after he failed to respond to a lawsuit as reported by Crypto News on August 11.

This is the first time in Australia that a follower has successfully sued a cryptocurrency influencer for losses incurred on an investment.

Alex Saunders. Source: twitter.com/NuggetsNewsAU

The Supreme Court of Victoria ruled on October 14 that Saunders has to pay back the funds, plus interest and legal fees, as a default ruling because the defence did not file a response within the 42-day deadline.

The default settlements of A$487,805 (including A$8,534 for interest) and A$4,156 for legal fees are to be paid to New Zealand investor Ziv Himmelfarb for the “crypto loans” he made to Saunders earlier this year.

The court statement of claim included a “long/short crypto fund” sent by Saunders via Facebook on February 17, 2021, leading to Himmelfarb sending over A$250,000 worth of bitcoin to subscribe for an interest in the crypto fund.

The court order also includes a section where Himmelfarb also sent Saunders around A$65,000 worth of USDC for a “DCB project”, for which Saunders was allegedly raising capital from his community.

Along with the crypto fund investment and the DCB project, Himmelfarb sent Saunders A$144,305 worth of ETH (Ethereum) coins in an “ETH coins loan”.

Unregistered Crypto Funds

The crypto fund and DCB projects in question were pursued in the lawsuit as being unregistered under section 601EB of the Act. As mentioned, this allows the investor to lay claim to a contract breach whereas the investment scheme has not been registered in Australia as required under the Corporations Act.

Bankruptcy Notice Issued

Following the application, the Australian Financial Security Authority has issued a bankruptcy notice, giving Saunders 21 days to pay, failing which Himmelfarb can file a creditor’s bankruptcy petition. Crypto News asked Himmelfarb if he had any comments and he said:

My only comment is that I hope I don’t have to go all the way through to bankruptcy, but I won’t hesitate to do that if Alex doesn’t pay.

Ziv Himmelfarb

Related News

Controversy on Twitter followed a story published and since removed by news.com.au regarding a former colleague of Saunders, Ben Simpson, who has been contacted by Crypto News with a list of questions regarding his business relationship with Saunders and involvement with any other projects.

Crypto News has also contacted Saunders to add comments for this story, but he has maintained his silence through all channels.

Categories
Bitcoin Bitcoin Mining Crypto News

Canadian City Becomes First to be Heated Using Bitcoin Mining

As the narrative around Bitcoin’s nuanced relationship with energy gradually shifts, the City of North Vancouver has announced a partnership with its local energy provider to achieve a world first – using bitcoin mining to heat the city.

Using Bitcoin Mining to Heat the City

The City of North Vancouver is on a self-described “decarbonisation journey”, which among other things includes the integration of new technologies designed to reduce its environmental footprint. In that vein, the Canadian municipality’s wholly owned energy company, Lonsdale Energy Corporation (LEC), has just formed a partnership with a cleantech bitcoin miner, MintGreen.

The complex issue of climate change requires innovative solutions, and LEC, with the City of North Vancouver, is showing tremendous leadership in environmental stewardship.

Colin Sullivan, CEO, MintGreen

As is well documented, mining bitcoin consumes significant amounts of energy to maintain the security of the proof-of-work protocol. In doing so, a huge amount of waste in the form of excess heat is produced. MintGreen has already been leading the way in reusing such heat by selling it on to a local brewery and a sea salt distillery. The partnership with LEC is simply an extension of what it has already been doing, albeit on an industrial scale.

Through the partnership, MintGreen will provide heat to North Vancouver’s energy system using its new “Digital Boilers” that recover more than 96 percent of the electricity used for bitcoin mining. Since MintGreen runs at full capacity all year round, its proprietary technology has the capacity to offer a reliable and clean heating baseload.

It is estimated that over the 12-year contract, MintGreen’s “Digital Boilers” will prevent 20,000 tonnes of greenhouse gases from entering the atmosphere per megawatt, compared to natural gas.

Being partners with MintGreen on this project is very exciting for LEC in that it’s an innovative and cost-competitive project, and it reinforces the journey LEC is on to support the City’s ambitious greenhouse gas reduction targets.

Karsten Veng, CEO, LEC

In an interview with Bitcoin Magazine, MintGreen chief executive Colin Sullivan noted that there wasn’t any way bitcoin mining could be greener given that 97 percent of its energy mix is hydroelectric. “Using that energy twice both eliminates waste and makes this project one of the greenest in the space,” Sullivan said.

Bitcoin Mining – Becoming Less Controversial

Thankfully we’re starting to see fewer ill-informed and recycled arguments along the lines of “Bitcoin consumes as much energy as country X”. The obvious response has always been, compared to what, and who gets to decide what constitutes an appropriate use of energy?

The reality appears to be slowly dawning on critics that bitcoin mining is neither inherently good nor bad for the environment. Mining is a function of incentives and will take place wherever cheap, reliable energy exists.

Most often it occurs where you have wasted or stranded energy (which is innately cheap) as seen in Texas, where natural gas flares are being used to mine bitcoin. In other instances, it can be 100 percent sustainable, such as in El Salvador’s infamous geothermal bitcoin mining project.

Categories
Banking Bitcoin Crypto News Cryptocurrencies Institutions

Morgan Stanley CEO Admits Crypto ‘Isn’t a Fad’

Cryptocurrencies may not constitute a significant part of the business demand for Morgan Stanley, a top US investment financial institution, but chairman and CEO James Gorman believes they are not going away.

There are people who still argue in some way that bitcoin and digital currencies are “bubble”, not mindful of the fact that the sector has developed for over 10 years with a current market capitalisation of US$2.5 trillion.

Last week, JPMorgan CEO Jamie Dimon reiterated his view that bitcoin is “worthless” – he has in the past also referred to the asset as “a fraud”, and “fool’s gold”.

Taking a somewhat contrary view, Gorman said this week that cryptocurrencies are not a fad.

I don’t think crypto’s a fad, I don’t think it’s going away […] I don’t know what the value of bitcoin should or shouldn’t be, but these things aren’t going away and the blockchain technology supporting it is obviously very real and powerful.

James Gorman, CEO and chairman, Morgan Stanley

Crypto ‘Will Evolve’ and ‘We’ll Evolve With It’

Morgan Stanley is one of the few major financial institutions to have launched crypto-related investment products, just as global investors are shifting away from gold to emerging crypto assets. In April, the bank filed notice to offer a bitcoin investment product to its wealth management clients. 

Although its crypto offering isn’t pivotal to the bank just yet, Gorman said it “may evolve”. 

For us, honestly it’s just not a huge part of the business demand for our clients. That may evolve and we’ll evolve with it, but certainly it’s not what’s driving our economics one way or the other.

James Gorman, CEO and chairman, Morgan Stanley

Despite Gorman’s comments, Morgan Stanley – which reported net earnings of US$14.8 billion for the third quarter – has showed particular interest in crypto this year. Its US$150 billion investment unit Counterpoint Global explored bitcoin in February, and the firm purchased more than 28,000 shares in Grayscale’s Bitcoin Trust in June.