The London Stock Exchange (LSE) is gearing up to broaden its financial product offerings by incorporating crypto exchange-traded notes (ETNs) for Bitcoin and Ether.
This significant development is set to unfold in the second quarter of 2024, with the LSE poised to start receiving applications for these novel ETNs.
The announcement made on March 11 delineates a strategic move towards embracing the burgeoning realm of cryptocurrency within the established frameworks of traditional financial markets.
The LSE has outlined specific criteria for the admission of crypto ETNs in its recently published Crypto ETN Admission Factsheet.
Although an exact commencement date for accepting applications has not been disclosed, the exchange has made clear its requirements.
For an ETN to be considered, it must be physically backed by Bitcoin or Ether and refrain from leveraging.
A critical stipulation is the transparent availability of the market price or value of the underlying crypto asset.
Furthermore, the crypto assets backing the ETNs must be securely stored, preferably in cold wallets, and the custodians of these assets must comply with Anti-Money Laundering legislation from the UK, EU, Switzerland, or the US.
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ETNs, defined by the exchange as debt securities linked to an underlying asset, offer investors an opportunity to engage with the performance of cryptocurrencies within regulated trading hours.
This method presents a less direct approach compared to exchange-traded funds (ETFs), with ETNs being backed by issuer’s credit rather than a collective pool of assets, and is viewed as a softer alternative for those seeking exposure to crypto assets.
Parallel to the LSE’s initiative, the UK’s Financial Conduct Authority (FCA) has also indicated a willingness to accommodate Recognised Investment Exchanges (RIEs) wishing to establish market segments for crypto-backed ETNs, albeit restricted to professional investors.
This category encompasses authorized or regulated credit institutions and investment firms.
The FCA emphasizes the need for stringent controls to safeguard investors and mandates adherence to the UK’s listing regime, including ongoing disclosure and the provision of prospectuses.
Despite this openness towards institutional engagement with crypto-backed ETNs, the FCA maintains a cautious stance towards retail investors, citing the high-risk nature of cryptoassets.
The authority has reiterated its position that such investments are not suitable for the retail market, warning of the potential for total loss and underscoring the largely unregulated status of cryptoassets.
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MicroStrategy, an American software technology firm, has once again made headlines with its aggressive Bitcoin investment strategy.
Completing a substantial $800 million convertible note offering, the company used the proceeds to purchase an additional 12,000 BTC for its treasury reserve.
This latest acquisition was announced after the firm declared its plans to issue new convertible notes on March 6, coinciding with Bitcoin hitting a new all-time high.
The offering was successfully finalized on March 8, reinforcing MicroStrategy’s commitment to Bitcoin.
The company’s founder and chairman, Michael Saylor, shared on the X social media platform that this strategic move utilized the net proceeds from the note offering along with surplus cash, securing the Bitcoin at an average price of $68,477 per unit.
Prior to this purchase, MicroStrategy’s Bitcoin portfolio comprised approximately 193,000 BTC, acquired at an average price of $31,544, totaling a value of $12.9 billion and marking a 112% return since the company first ventured into Bitcoin investments.
With the latest addition, MicroStrategy’s Bitcoin holdings have swelled to 205,000 BTC, acquired at a total cost of $6.91 billion, averaging $33,706 per Bitcoin.
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This latest note offering introduced by MicroStrategy features a modest annual interest rate of 0.625%, with payments due semi-annually starting September 2024.
The notes can be converted into cash, MicroStrategy stocks, or a combination thereof, with an initial conversion rate set at 0.6677 shares of MicroStrategy’s class A common stock per $1,000 of note value.
This conversion rate translates to a share price of approximately $1,497.68, a significant 42.5% premium over the share price on March 5, 2024.
MicroStrategy’s bold move to invest a significant portion of its capital into Bitcoin began in August 2020, under the guidance of Michael Saylor.
This strategic decision was motivated by the belief in Bitcoin’s reliability as a store of value and its potential for long-term appreciation over holding cash.
Saylor emphasized Bitcoin’s superiority over fiat currency as the mainstay of the company’s treasury reserve strategy.
Since then, the value of the company’s Bitcoin holdings has escalated by over $1 billion by early January 2024, underscoring the lucrative nature of its investment approach.
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Spot Bitcoin exchange-traded funds (ETFs) will hold over 10 percent of the Bitcoin supply by the third quarter of this year, an analysis by Crypto Intelligence has found.
This analysis is contingent on the applications for Ether spot ETFs in the US being rejected in the coming weeks, as the approval of a non-BTC ETF could significantly impact demand for the existing Bitcoin spot ETFs.
This is because there would be another crypto product easily available to investors and institutions, and this would potentially limit demand for BTC ETFs.
This could be exacerbated by the fact that Ether is deflationary, while Bitcoin’s supply is continuing to grow; although the rate of this growth will decrease following the April halving.
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The existing spot Bitcoin ETFs already hold over four percent of the 21 million BTC that will eventually be mined, and a supply crunch – which could send the BTC price well over the $120,000 mark – is expected to take hold in the coming months.
Bitcoin has already posted strong gains as a result of the demand that is flowing through the spot BTC ETFs, and the world’s first-ever cryptocurrency is currently trading at just under the $72,000 mark, according to CoinMarketCap data.
Ethereum, meanwhile, recently jumped above $4,000, but it is still yet to get close to breaching its all-time high.
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The CEO of ARK Invest, Cathie Wood, has made a bold prediction regarding Bitcoin’s future, suggesting that the cryptocurrency will reach a value of $1 million much sooner than the initially forecasted year of 2030.
In an interview with the New Zealand Herald on March 7, Wood shared her insights, citing “new expectations for institutional involvement” as a key driver behind Bitcoin’s potential price surge.
Wood emphasized that the advent of the United States’ first spot exchange-traded funds (ETFs) has marked a significant transformation for Bitcoin.
Her confidence in Bitcoin’s future has only intensified, spurred by the momentum and interest surrounding these spot ETFs.
This has led ARK Invest to reassess its stance on Bitcoin, shifting its price target ahead of the previously predicted timeline.
According to Wood, the approval of spot ETFs by the Securities and Exchange Commission (SEC) was a pivotal milestone that has accelerated the cryptocurrency’s ascent toward the $1 million mark.
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Despite the enthusiasm, Wood pointed out that major financial institutions, such as Morgan Stanley, Merryl Lynch, or Bank of America, have yet to endorse Bitcoin.
However, she believes that the current price movement precedes their potential approval, suggesting that Bitcoin’s valuation could climb even higher once these platforms come on board.
Wood hinted that the revised target price for Bitcoin exceeds the $1 million mark, reflecting her optimistic outlook fueled by anticipated institutional participation, though she did not specify an exact figure.
As Bitcoin approaches new all-time highs, the market braces for a “wild week,” according to James Van Straten, a research and data analyst at CryptoSlate.
Traders and analysts anticipate continued price discovery, driven by ongoing ETF inflows.
Van Straten highlighted the critical moment if Bitcoin surpasses the $70,000 threshold before potential turbulence at Coinbase, the largest U.S. exchange.
This period is seen as crucial for determining Bitcoin’s true market value, especially after recent records saw BTC/USD trading at approximately $69,500.
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Venture capitalist and billionaire Chamath Palihapitiya recently discussed Bitcoin’s significant progress and its imminent impact on American society.
During an episode of the All-In Podcast, Palihapitiya emphasized the importance of the approval of spot market Bitcoin exchange-traded funds (ETFs), describing it as a pivotal development for Bitcoin’s integration into mainstream financial systems.
Palihapitiya believes that Bitcoin is still in its early stages but predicts it will soon become a widespread topic of conversation.
He expressed his views by saying, “We’re going to get to a tipping point where everybody really talks about this. I still don’t think we are there yet.
I think we’re just at the beginning, but when you see the inflows into these ETFs, it’s a very big deal because it just allows every mom-and-pop individual to buy some to the extent that they want to own or they want to speculate on it, whatever it is.”
He further stated that the recent developments in the Bitcoin sphere have not only proved skeptics wrong but have also laid the groundwork for a constructive future for the cryptocurrency.
In his view, the approval of Bitcoin ETFs has opened the doors for everyday investors to participate in the cryptocurrency market, which marks a significant shift in the financial landscape.
In addition to Bitcoin, Palihapitiya pointed out that the success of Bitcoin ETFs could pave the way for the approval of ETFs for other cryptocurrencies, such as Ethereum.
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He suggested that the potential approval of an Ethereum ETF follows logically from the approval of Bitcoin ETFs, highlighting a broader trend of cryptocurrencies becoming integral to the financial sector.
“So I think it’s been a very big year, and I think that psychologically it’s proven a lot of folks wrong, and it’s a setup for something really constructive,” he commented.
Highlighting the momentum of this movement, Palihapitiya concluded, “The other thing I’ll say is that it’s not just Bitcoin but as goes Bitcoin, there are a handful of other things.
“People are now speculating that there’s going to be an Ethereum ETF that gets approved as well because if you approve one, there’s probably legitimate cause to approve a few others, so these things are becoming part of the financial fabric, and I think that that should not be underestimated.”
As of the time of his comments, Bitcoin’s value stood at $69,465, indicating the cryptocurrency’s strong market performance and its growing acceptance within the financial ecosystem.
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Despite the impressive rally that pushed Bitcoin‘s price beyond $70,000, on-chain data indicates that Bitcoin whales, or holders of large amounts of Bitcoin, are not in a hurry to sell.
This trend is seen as Bitcoin’s whale population has increased, with the number of unique addresses holding at least 1,000 Bitcoin climbing to 2,104 as of March 7.
This number, however, still falls short of the peak of 2,489 addresses recorded in February 2021 when Bitcoin was trading above $46,000.
The growth in the number of large Bitcoin holders is partly attributed to the success of the United States spot Bitcoin exchange-traded funds (ETFs), which saw over $52.5 billion in cumulative trading volume by March 4.
The reluctance of whales to sell suggests they anticipate further price increases.
Their actions are closely watched as they have the potential to significantly sway Bitcoin’s price due to the size of their trades.
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Julio Moreno, the head of research at CryptoQuant, highlighted the notable increase in whales’ Bitcoin holdings, stating on X on March 7, “The growth of whales’ Bitcoin holdings is going parabolic.”
This sentiment is supported by Glassnode data indicating a sharp rise in transfers from exchanges to whales, reaching new record highs, while the volume of whale to exchange transfers has only modestly increased, suggesting a strong influx of new investors and a lack of profit-taking among existing large holders despite the high prices.
The fundamental demand for Bitcoin remains robust, partly fueled by the United States spot Bitcoin ETFs. The BlackRock iShares Bitcoin Trust (IBIT), for example, experienced record daily inflows of $788 million on March 5.
With Bitcoin’s price potentially targeting around $92,500, supported by a combination of technical, on-chain, and fundamental indicators, including a bull pennant pattern on the charts, the market’s outlook remains bullish.
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In 2023, the United States experienced a significant rise in cryptocurrency-related investment fraud, with the Federal Bureau of Investigation (FBI) highlighting it as the major source of investment fraud losses.
According to the FBI, the nation saw a staggering 53% increase in crypto investment fraud, with losses surging from $2.57 billion in 2022 to approximately $3.94 billion in 2023.
This figure constituted about 86% of the total $4.57 billion lost to investment fraud across the board.
The FBI report draws attention to the growing trend of victims being lured into cryptocurrency scams, promising them high returns on their investments.
“These scams are designed to entice those targeted with the promise of lucrative returns on their investments,” the FBI noted.
Among these, romance scams have emerged as a prevalent method, wherein criminals create fake online personas to build relationships and trust with their victims.
They then concoct compelling stories to convince the victim to transfer cryptocurrency, only to vanish subsequently.
The analysis firm Chainalysis, in December 2023, identified romance scams as the cause for at least $374 million in suspected stolen cryptocurrency during the year.
Additionally, Cointelegraph reported on January 1 that phishing scams had ensnared over 324,000 cryptocurrency users, leading to approximately $295 million in digital assets being lost to wallet drainers in 2023 alone.
The issue of cryptocurrency scam victims is not confined to the United States; it is a global concern.
The Australian Competition and Consumer Commission reported in April 2023 that Australians had lost AU$221.3 million ($146.9 million) to investment scams involving cryptocurrency in 2022.
This marked a 162.4% increase from the previous year, indicating the expanding reach and impact of these scams worldwide.
The significant rise in crypto-related fraud underscores the urgent need for increased awareness and more robust protective measures for investors globally.
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The Bitcoin market is currently teeming with optimism, projecting a potential surge toward or even beyond the $90,000 mark in the imminent weeks.
This bullish outlook is anchored in a combination of encouraging technical analyses, on-chain data, and fundamental factors.
Currently, Bitcoin (BTC) is experiencing a period of consolidation, oscillating within a triangular pattern that mirrors a bull pennant, especially after reaching a new all-time high of $69,210.
Such formations are often interpreted by traditional analysts as bullish continuation patterns, hinting at a possible price escalation akin to the height of the prior uptrend, usually accompanied by a spike in trading volume.
Given Bitcoin’s recent performance and its consolidation post-new highs, experts predict a significant breakout, targeting a price around $92,500 in the forthcoming weeks, marking a 35% increase from its current position.
The recent upturn in Bitcoin’s price is also aligned with an increase in capital inflows into United States-based exchange-traded funds (ETFs), which currently boast over $53 billion in reserves, a notable leap from $27.95 billion at their inception in January.
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The surge in ETF inflows suggests a growing investor interest, likely driving demand for Bitcoin as fund managers purchase additional assets to mirror the ETF‘s indexed composition or sector.
Market analyst Timothy Peterson highlighted the positive momentum triggered by the Bitcoin Spot ETF approval, suggesting a potential climb to $100K by October 2024.
Additionally, the anticipation surrounding the upcoming Bitcoin halving event adds to the bullish sentiment.
Historically, halving events, which reduce the mining reward by half, have preceded price increases.
Analysts also draw parallels between Bitcoin’s current market dynamics and the period leading up to its November 2021 rally toward $69,000.
Market analyst Jelle notes similarities in the price action around all-time highs, indicating a potential upcoming surge akin to the last bull cycle, albeit with distinct characteristics.
Jelle elaborates, “Bitcoin is acting similar to 2020’s all-time high breakout,” describing a pattern of a failed breakout followed by consolidation and a subsequent successful surge.
If this historical pattern repeats, Bitcoin could be setting its sights on surpassing $75,000 in the near future, reinforcing the optimistic forecasts for its price trajectory.
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BlackRock, a global asset management powerhouse, is set to diversify its Global Allocation Fund (MALOX) by acquiring spot Bitcoin exchange-traded funds (ETFs).
A recent update to its United States Securities and Exchange Commission (SEC) filing on March 7 indicates the firm’s interest in integrating physically backed Bitcoin exchange-traded products (ETPs), including its own iShares Bitcoin Trust (IBIT) and ETFs from other providers.
The statement from the filing emphasizes, “The fund may acquire shares in ETPs that seek to reflect generally the performance of the price of Bitcoin by directly holding bitcoin — ‘Bitcoin ETPs’ — including shares of a Bitcoin ETP sponsored by an affiliate of BlackRock.”
These investments will focus on Bitcoin ETPs listed on national securities exchanges, ensuring compliance with trading standards.
The BlackRock Global Allocation Fund, established in 1989, aims to yield returns through a dynamic investment approach, involving U.S. and international equities, debt, and money market securities from major corporations like Microsoft and Apple.
As of the recent update, MALOX boasts $17.8 billion in assets under management.
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However, MALOX isn’t the sole BlackRock fund eyeing spot Bitcoin ETFs.
A similar intention was revealed for its Strategic Income Opportunities Fund (BSIIX) in an SEC filing dated March 4.
The firm’s venture into Bitcoin ETFs gained momentum with the launch of the iShares Bitcoin Trust on January 11, paralleled by nine other spot Bitcoin ETFs in the U.S.
Remarkably, the iShares Bitcoin Trust has shown exponential growth, with its Bitcoin holdings surging over 7,000% from 2,621 BTC at its inception to 187,531 BTC by March 7, 2024, valuing its assets at $12.6 billion.
Moreover, BlackRock is exploring the potential of a spot Ether ETF, having filed an application for the iShares Ethereum Trust in November 2023.
The financial community is closely watching to see if U.S. regulators will greenlight a spot ETH ETF in 2024, considering it took over a decade for the SEC to approve a spot Bitcoin ETF in the nation.
This move by BlackRock underscores its proactive stance in expanding its cryptocurrency offerings, reflecting a growing interest in digital asset investments within traditional financial sectors.
On March 8, Bitcoin soared to unprecedented heights, propelled by the U.S. unemployment data which strengthened the argument for potential interest rate cuts.
The cryptocurrency reached an all-time high of $70,184 on Bitstamp, as per data from Cointelegraph Markets Pro and TradingView, amidst optimistic market movements encouraged by the latest jobless statistics from February.
These figures surpassed expectations, suggesting that inflationary pressures might be diminishing due to strict economic policies.
The national unemployment rate was reported at 3.9%, a slight increase from predictions, while the job growth numbers for January were adjusted downwards.
The Kobeissi Letter, a trading analysis platform, noted that the market responded positively, with stocks climbing.
This upward trend was attributed to the increased unemployment rate and significant revisions to job additions.
The cryptocurrency market, including Bitcoin and various altcoins, rallied along with stocks, marking a significant moment as Bitcoin crossed the $70,000 threshold for the first time.
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Market analysts highlighted the importance of this milestone occurring ahead of a scheduled block subsidy halving, suggesting that Bitcoin could reach its macro cycle peak sooner than anticipated.
Mikybull Crypto, a prominent voice in the market, remarked on social media platform X (formerly Twitter), “Bitcoin is doing what it has not done in history. Cycle top is coming faster than what people projected.”
Additionally, the jobs data indicated a weakening U.S. dollar, with the U.S. dollar index (DXY) dropping to near its two-month low at 102.36, down almost 5% from its peak earlier in the year.
This decline in dollar strength further fueled speculation regarding the Federal Reserve’s next moves.
Although the Fed’s decision on interest rates is awaited on March 20, expectations remain largely hawkish, with the CME Group’s FedWatch Tool estimating a mere 3% chance of an interest rate cut.
Throughout the week, Fed officials, including Chair Jerome Powell, have reiterated a cautious stance on future monetary policies, maintaining conservative language despite the optimistic market trends spurred by the latest economic indicators.