Bitcoin re-entered the spotlight within an intraday trading span by the close of the week on February 18th, with bullish trends gaining ground during weekend trades.
Data sourced from Cointelegraph Markets Pro and TradingView revealed that at $52,000, Bitcoin’s price consolidation reached a pivotal juncture.
The primary cryptocurrency experienced a downturn to $50,680 on Bitstamp a day earlier, marking its lowest levels in several days.
However, a swift recovery ensued, adding nearly $1,500 within hours. As of the time of writing, there hadn’t been a fresh retesting of these lows.
Analysing the week’s developments, prominent trader Skew observed a shift in trader behaviour during the latter half of the Wall Street trading week.
He noted a decline in spot buying towards the weekend, with “mostly taker driven dips & bounces since.”
“So far seeing some spot buyers return here with binance spot leading,” he remarked on the day.
Simultaneously, burgeoning open interest (OI) on CME Group’s Bitcoin futures markets, reaching a record $6.8 billion, hinted at impending volatility, according to data from monitoring resource CoinGlass.
However, discussing open interest more broadly, popular trader Daan Crypto Trades highlighted a discrepancy when denominated in BTC.
“This +100% rally from October has been healthy in terms of leverage imo,” he argued.
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“Funding has mostly kept it’s neutral rate and open interest denominated in $BTC is lower. In USD value of course it has gone up during this time as the underlying asset (BTC) went up in value.”
Skew further emphasised that bulls must maintain upward momentum in Bitcoin’s relative strength index (RSI) on 4-hour timeframes by the weekly close.
The 21-period exponential moving average (EMA), currently positioned at $51,500, also carried significance.
“In terms of spot flows around $52K – $53K area, notable spot selling into bounces which is often the case with profit taking,” he explained about the landscape on Binance.
“Key from here with current uptrend is seeing sufficient spot demand on dips, mostly seen as absorption at the lows where limit buying outweighs taker selling.”
Fellow trader and analyst Matthew Hyland highlighted $49,000 as the critical threshold to defend for the close.
Ethereum solo stakers and network nodes are poised to reap rewards from the incorporation of Verkle trees, as stated by Vitalik Buterin.
The Ethereum co-founder extolled the advantages of this technological enhancement to Ethereum’s protocol in a recent post.
Verkle trees are expected to facilitate “stateless validator clients,” with Buterin highlighting their capability to enable staking nodes to operate with “near-zero hard disk space and sync almost instantly.”
Buterin had previously outlined a five-stage, incremental process aimed at steering the smart contract blockchain towards what he termed as the endgame of Ethereum’s development.
This came subsequent to the eagerly awaited activation of the Beacon Chain, which marked Ethereum’s transition to proof-of-stake consensus in September 2022.
Verkle trees constitute a component of the roadmap, as shared by Buterin in late 2022.
Five keywords encapsulated the successive development phases: The Merge, Surge, Verge, Purge, and Splurge delineate the technical intricacies of various developmental milestones.
Verkle trees fall under the Verge category, representing the third phase of Ethereum’s developmental trajectory.
This phase involves the introduction of Verkle trees, which are set to enhance data storage efficiency and node size. Buterin elucidated the technical specifics of Verkle trees in the Ethereum Improvement Proposal documentation published in 2022.
READ MORE: Jupiter Asset Management Withdraws Investment in Ripple XRP ETP
Verkle trees serve a similar purpose to Merkle trees, which consolidate all transactions within a block and generate proof of the entire dataset for a user seeking to verify its authenticity:
“The key property that Verkle Trees provide, however, is that they are much more efficient in proof size.”
While Verkle trees utilise structures akin to Merkle trees, a crucial distinction lies in nodes employing a specific hash type known as a vector commitment, which is transmitted to sub-nodes.
Vector commitments are poised to yield substantial long-term advantages to the Ethereum network.
The primary benefit of Verkle trees is to facilitate Ethereum’s attainment of statelessness, whereby nodes verifying blocks would no longer necessitate storing Ethereum’s state.
Verkle trees enable smaller proof sizes, which can be accommodated within each block of the Ethereum blockchain. Consequently, nodes can verify any block using the data contained therein.
The implementation of Verkle trees is anticipated to usher in a plethora of new functionalities, including reduced hardware requisites for operating Ethereum nodes, thus enhancing the network’s decentralisation.
Moreover, new nodes can swiftly join the network, with the capability to promptly synchronise with it.
The development of Verkle trees is ongoing, and integrating them into the Ethereum protocol will necessitate several modifications.
These include a novel data structure to preserve the network’s state, a revamped gas accounting model, a strategy for migrating Ethereum’s state from Merkle to Verkle trees, novel cryptography primitives, and new block-level fields.
Grayscale, the crypto asset manager, has seen a deceleration in outflows from its spot Bitcoin ETF, although analysts suggest there’s more potential for further depletion.
As per data from Bianco Research and Farside, the total outflow from the Grayscale Bitcoin Trust (GBTC) since its transition to a spot Bitcoin ETF reached $7 billion by Feb. 16.
Despite the significantly reduced rate of outflow, observers like ETF Store President Nate Geraci caution that the bleeding may not have ceased entirely.
January marked the peak of the exodus, witnessing $5.64 billion exiting GBTC by month-end, whereas February has recorded only $1.37 billion in outflows thus far.
In a Feb. 18 post on X, Jim Bianco, the founder of Bianco Research and a former Wall Street analyst, attributes much of the outflow to investors rebalancing portfolios and migrating to spot Bitcoin ETFs with lower fees.
He notes that the recent wave of ETF launches has slashed fees to between 0 and 12 basis points, in contrast to Grayscale’s 150 bps charge.
Bianco also highlights another factor contributing to the ongoing outflow from GBTC: the fund traded at a considerable discount to the BTC market price, approximately 44%, when BlackRock applied for its spot ETF in June 2023.
He explains, “A lot of money flows into ‘cheap’ BTC,” suggesting that Grayscale began closing this arbitrage-type trade upon its ETF conversion in January 2024.
READ MORE: Ether Price Surge Continues: Approaching $2,800 Mark Amidst Optimism and Caution
Nate Geraci remains cautious, indicating that it’s premature to assume the asset bleed has concluded.
He speculates that even with a substantial reduction in assets, Grayscale could still surpass other issuers combined.
Moreover, Geraci anticipates the potential launch of a “mini-GBTC,” a new spot Bitcoin ETF by Grayscale, with considerably lower fees.
Further outflows could materialise following a recent court order permitting bankrupt crypto lender Genesis to liquidate a portion of its investments in Grayscale.
Genesis reportedly held approximately $1.6 billion worth of shares in GBTC, the Grayscale Ethereum Trust, and the Grayscale Ethereum Classic Trust.
European Central Bank (ECB) executive board member Piero Cipollone addressed the European Parliament Committee on Economic and Monetary Affairs regarding the preparations for the issuance of a digital euro.
He outlined four key issues confronting the central bank and outlined how the ECB would ensure the public’s access to a freely available common means of payment.
Cipollone stated that the ECB had initiated the search for infrastructure providers for the European Central Bank digital currency (CBDC).
He stressed the importance of this proactive approach, stating, “Our readiness would be compromised if we started searching for possible suppliers only after that decision [to launch the digital euro] is made.”
Additionally, he highlighted that agreements would remain adaptable to legislative and technological advancements.
Moreover, Cipollone clarified that only legal entities with registered offices in the EU and controlled by EU nationals would be eligible for participation in the procurement process, potentially impacting Amazon’s involvement in the project.
Regarding the digital euro rulebook, Cipollone advocated for a unified framework encompassing rules, standards, and procedures to ensure harmonious implementation.
He emphasised that the digital euro should function similarly to cash, liberating users from reliance on international payment processors and ensuring uniform service across the eurozone.
Cipollone likened the digital euro infrastructure to railway tracks, accessible to various private entities while remaining state-owned.
However, concerns were raised by the European Money and Financial Forum regarding the legal implications of designating the digital euro as legal tender, citing issues surrounding the status of integrated private payment providers.
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To maintain financial stability, safeguards are being integrated into the digital euro design, ensuring it remains interest-free to avoid competing with savings institutions.
Restrictions will be placed on public digital euro holdings, with businesses and financial institutions barred from holding it directly. Instead, a mechanism will be established to link CBDC wallets with bank accounts, facilitating transactions without pre-funding the wallets.
Finally, addressing privacy concerns, Cipollone assured that the digital euro would offer high standards of privacy for online payments, surpassing current commercial solutions.
Offline transactions would mirror the privacy of cash, with only the payer and payee possessing transaction details.
Online transactions would provide minimal pseudonymised data to the ECB for settlement purposes, with users retaining greater control over their information compared to private payment systems.
Additionally, the digital euro would boast state-of-the-art cybersecurity measures.
VanEck has agreed to pay a £1.75 million fine to settle charges brought by the United States Securities and Exchange Commission (SEC) regarding its launch of a social media-focused exchange-traded fund (ETF) in 2021.
The SEC imposed a civil penalty on the investment adviser.
On February 16, the SEC disclosed in a statement that during the launch of the VanEck Social Sentiment ETF in March 2021, VanEck did not fully disclose the involvement of a prominent social media personality in marketing the product.
The ETF aimed to track an index using “positive insights” from social media and other data sources.
However, the SEC found that VanEck attempted to enhance the fund’s success through social media and collaborated with an influential and divisive online personality to increase its appeal.
Although the financial watchdog did not explicitly name the influencer, reports from 2021 had previously linked David Portnoy, founder of Barstool Sports, to the promotion of the VanEck ETF.
The regulator observed an undisclosed detail: the influencer’s fee was tied to the fund’s growth, ensuring higher compensation as the fund expanded.
The SEC criticised the undisclosed agreement, focusing on VanEck’s failure to inform the ETF’s board about the influencer’s intended involvement.
This undisclosed arrangement had significant implications for the management contract and fund operations, breaching the board’s duty to oversee financial aspects during advisory contract discussions.
Andrew Dean, co-chief of the SEC Enforcement Division’s Asset Management Unit, emphasised the importance of transparency from advisers.
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He noted that the failure to provide accurate disclosures hampers the board’s ability to properly assess the advisory contract and understand the economic impact of licensing agreements.
VanEck accepted the SEC’s order acknowledging its violation of the Investment Company Act and Investment Advisers Act.
The company agreed to a cease and desist order, censure, and the required financial penalty without admitting or denying the findings.
The announcement comes after the company’s decision to terminate one of its ETF products, the Bitcoin Strategy ETF, a month ago following a comprehensive performance evaluation.
In an apparent effort to boost the popularity of its dedicated spot Bitcoin ETF with the ticker HODL, VanEck indicated on February 15 that it would reduce its fees from 0.25% to 0.20% starting February 21.
Bitcoin exchange-traded funds (ETFs) have experienced another robust week, with net inflows surpassing £2.2 billion from Feb. 12–16.
According to Bloomberg analyst Eric Balchunas, the combined volume exceeded the inflows received by any other among the 3,400 ETFs available in the United States.
BlackRock’s iShares Bitcoin Trust (IBIT) attracted the majority of capital, accumulating positive flows of £1.6 billion over the week, as per data from BitMEX Research.
“£IBIT alone has taken in £5.2b YTD, which is 50% of BlackRock’s total net ETF flows, out of 417 ETFs,” noted Balchunas.
Among the spot Bitcoin ETFs holding billions of pounds in assets, Fidelity’s Wise Origin Bitcoin Fund witnessed significant inflows, drawing £648.5 million over the last five trading sessions.
The Ark 21Shares Bitcoin ETF secured £405 million during the same period, while the Bitwise Bitcoin ETF attracted £232.1 million in capital inflows.
However, outflows from the Grayscale Bitcoin Trust are affecting the collective performance of the other recently approved spot Bitcoin ETFs.
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The fund experienced £624 million in withdrawals from Feb. 12–16 as investors continued to divest.
Since its transition from an over-the-counter product to a spot ETF on Jan. 10, Grayscale’s fund has seen over £7 billion in capital outflows.
The new ETFs are believed to be one of the factors propelling Bitcoin’s recent price surges.
The cryptocurrency has surged 91% in the past four months, buoyed by market sentiment surrounding the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) on Jan. 10.
During the week, Bitcoin gained nearly 7% and is trading at £51,434 at the time of writing, marking a 24% increase in February.
Major banks and financial institutions are also taking note of the new ETFs.
In a Feb. 14 letter, a trade group coalition representing Wall Street’s largest firms urged the SEC to consider modifications to the Staff Accounting Bulletin 121, which offers guidance on accounting for crypto asset custody obligations.
The proposed revision would permit banks to serve as custodians of the BTC funds.
Ether’s price has been steadily climbing over the past ten days, marking a gain of 21.5% and edging close to the £2,800 mark.
This surge in the cryptocurrency’s value is attributed to the robust inflow into the recently introduced spot Bitcoin exchange-traded fund (ETF) in the United States.
However, Ether possesses additional catalysts that could potentially propel its price beyond the £3,000 threshold—a level that left its mark during its last trial in March 2022.
Will Ether’s anticipated ascent to £3,000 unfold differently this time?
From an optimistic standpoint, Ether may solidify its position as the second cryptocurrency with a spot ETF listed on US exchanges.
This would set it apart from rivals like Solana and BNB Chain in terms of accessibility and regulation. US exchanges, including Binance and Coinbase, are still entangled in legal battles with the US Securities and Exchange Commission (SEC) concerning security offerings.
Hence, approval of an Ethereum ETF in the US would notably reduce uncertainty for its investors.
Other factors bolstering Ether’s prospects include the forthcoming Dencun network upgrade slated for March 13.
This hard fork aims to, among other objectives, slash transaction costs on the Ethereum layer 2.
By providing more block space and lowering gas costs for rollups, these modifications could potentially stimulate the usage of its decentralized applications (DApps) and escalate deposits in its smart contracts, thereby driving up demand for ETH.
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Ether bulls have ample grounds to believe that £3,000 is within grasp, but historical evidence underscores the challenge of sustaining such price levels.
For instance, in the three weeks leading up to April 3, 2022, ETH surged by 42%, soaring from £2,520 to £3,580.
However, the rally proved unsustainable as its price plummeted by 46% in the subsequent 40 days. Traders now question whether Ether could encounter a similar fate this time around.
The first indicator to scrutinise is Ether’s futures premium, which reflects the demand for leverage between longs (buyers) and shorts (sellers).
Professional traders favour monthly futures contracts due to the absence of a variable funding rate, but these instruments typically trade at a 5% to 10% premium to compensate for their extended settlement period.
Jupiter Asset Management’s internal compliance team has reportedly withdrawn its investment in the 21Shares Ripple XRP exchange-traded product (ETP) due to regulatory issues in Ireland.
The firm initially invested over $2 million into the fund, incurring a loss of $834.
According to a recent report from the Financial Times, Jupiter invested $2,571,504 into the 21Shares Ripple XRP ETP (AXRP) during the first half of 2023.
However, the exact date of the initial investment wasn’t specified. Meanwhile, the ETP yielded a one-year return of 31.7%, but it has declined by 13.2% in the past six months.
The AXRP tracks the performance of XRP, having launched in March 2019. According to 21Shares website, the ETP has assets under management (AUM) totalling $50,497,518.
The report explained that asset managers operating under Ireland’s Undertakings for Collective Investment in Transferable Securities Directive (UCITS) are restricted from exposure to crypto.
After the compliance team at Jupiter detected the trade in one of its Irish UCIT funds, the company reportedly sold off the investment.
Jupiter liquidated its Ripple XRP ETP holding for $2,570,670, incurring a loss of $834.
“The trade was made, picked up by our regular oversight process and then cancelled.”
READ MORE: Genesis Granted Approval to Liquidate £1.3 Billion in Grayscale Bitcoin Trust Shares
This comes amid ongoing discussion about the potential approval of an XRP exchange-traded fund (ETF), particularly after the recent approval of 11 spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC).
However, due to the legal dispute between Ripple and the SEC regarding whether XRP qualifies as a security, some analysts speculate that it may be unlikely.
On Jan. 24, Cointelegraph reported that CoinShares’ head of product, Townsend Lansing, explained that an XRP ETF wouldn’t be feasible unless the SEC is forced to or agreed to concede that XRP is not a security.
Meanwhile, Brad Garlinghouse, CEO of Ripple, believes that the recent approval of several spot Bitcoin exchange-traded funds (ETFs) in the United States will only open the door for more crypto ETFs in 2024.
However, in a recent interview with CNBC, Garlinghouse stopped short of explicitly predicting that an XRP ETF would be approved by the SEC, but he expects an Ethereum ETF to get the green light in the near future.
OpenAI has purportedly entered into an agreement that has escalated the valuation of the San Francisco artificial intelligence (AI) company to £80 billion or more, indicating an almost threefold surge in less than 10 months.
As per a report in The New York Times, the company intends to vend current shares in a tender offer spearheaded by Thrive Capital. This strategy permits employees to vend their shares, deviating from conventional funding rounds aimed at garnering capital for business activities.
In a similar arrangement in 2023, venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global consented to procure OpenAI shares in a tender offer, establishing the company’s worth at roughly £29 billion, as per the report.
OpenAI CEO Sam Altman has also purportedly been engaging in discussions to amass funds for a chip venture and advocating collaborations between the company and “various investors,” chip manufacturers, and energy suppliers.
The CEO affirmed that OpenAI would consent to be a “significant customer” of the new factories as he endeavours to enhance the world’s chip-producing capability to propel novel AI-related tools.
In December 2023, it was disclosed that OpenAI was deliberating with investors contemplating injecting over £100 billion into the company.
In November 2023, the OpenAI board expelled Altman, inciting turmoil and casting doubts on the company’s future.
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Employees threatened to resign en masse, prompting Altman’s reinstatement, accompanied by the departure of some board members.
OpenAI enlisted law firm WilmerHale to scrutinise the board’s decisions and Altman’s stewardship. The report on the matter is anticipated in early 2024.
The unveiling of OpenAI’s ChatGPT in late 2022 sparked interest in AI, instigating companies to delve into methods to harness the potential of the technology.
The AI company revealed its inaugural text-to-video model on Thursday, 15th February.
While acknowledging that the model still requires refinement, the new generative AI model dubbed Sora generates intricate videos from simple text prompts, extends existing videos, and even concocts scenes based on a static image.
OpenAI did not promptly respond to a Cointelegraph request for comment on the agreement.
Major banks and financial institutions in the United States are urging the United States Securities and Exchange Commission (SEC) to revise its definition of crypto assets, potentially enabling them to assume a more significant role in the crypto sphere, such as serving as custodians for the recently sanctioned spot Bitcoin exchange-traded funds.
On 14th February, a coalition of trade groups including the Bank Policy Institute, American Bankers Association, Financial Services Forum, and Securities Industry and Financial Markets Association presented their argument in a letter to SEC Chair Gary Gensler.
The coalition highlighted the recent endorsement of spot Bitcoin (BTC) exchange-traded products in the U.S., observing the absence of American banks as custodians for the approved products.
“The Commission recently approved 11 Spot Bitcoin ETPs, allowing investors access to this asset class through a regulated product.
However, notably absent from those approved products are banking organizations serving as the asset custodian, a role they regularly play for most other ETPs.”
The letter called for the SEC to consider adjustments to Staff Accounting Bulletin 121 (SAB 121), issued in March 2022, which offers guidance on accounting for crypto asset custody obligations.
They noted that it has been two years since the issuance of the guidance, and there have been “several relevant developments” during this period, including the approval of spot Bitcoin ETFs.
The existing guidance mandates banks to include crypto assets on their balance sheet, resulting in increased costs and hindrances to offering crypto custody services on a large scale.
READ MORE: Genesis Granted Approval to Liquidate £1.3 Billion in Grayscale Bitcoin Trust Shares
The coalition has now urged the SEC to refine the definition of crypto assets in SAB 121 to exclude traditional assets recorded on the blockchain.
This would prevent assets like tokenized deposits from falling under the stringent crypto guidelines.
They also seek exemptions for banks from the on-balance sheet requirements while retaining the disclosure obligations, enabling them to engage in certain crypto activities while maintaining transparency for investors.
In a post on X, Bitwise chief investment officer Matt Hougan stated that the letter indicates a change in the “tone around crypto regulation in Washington,” with others suggesting that banks are expressing interest in joining the “digital finance wave.”
“US banks, left off key bitcoin ETF roles, are pushing SEC to tweak guidance around holding digital assets,” summarised Bloomberg ETF analyst Eric Balchunas.
Meanwhile, TheBitcoin Therapist, author of a weekly Bitcoin newsletter, echoed the sentiment:
“Bankers are getting annoyed they can’t hold spot Bitcoin ETFs for their customers. The Q1 FOMO is already driving them mad.”
According to preliminary data from Farside, total aggregate inflows to the recently launched spot Bitcoin ETFs have just surpassed $4 billion despite an acceleration in outflows from Grayscale.