Grayscale, a leading crypto asset manager, is experiencing a notable decline in investments in its Bitcoin exchange-traded fund (ETF), with recent data showing significant outflows.
On March 21, the Grayscale Bitcoin Trust (GBTC) reported outflows of $358.8 million.
This event comes on the heels of a record-breaking $642 million outflow on March 18, according to Farside Investors.
Over the past week, GBTC has seen a total of $1.8 billion in withdrawals, marking a trend of persistent outflows across the cryptocurrency ETF sector for four consecutive days.
Despite these significant outflows, experts believe this trend could be nearing its end.
Eric Balchunas, a Senior Bloomberg ETF analyst, suggested on March 21 that the majority of the outflows, particularly from the recent bankruptcies within the crypto industry, might be concluding due to their “size and consistency.” H
e further speculated that the outflows could be linked to bankrupt firms purchasing Bitcoin with cash, which could be stabilizing the market.
Balchunas optimistically noted that once this period is over, the market might only see retail-driven flows, similar to those observed in February.
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Adding to the discussion, an independent researcher known as ErgoBTC pointed out that around $1.1 billion of the recent GBTC outflows likely originated from Genesis, a bankrupt crypto lender.
The researcher highlighted the timing and volume of transactions between GBTC and Genesis as evidence of their correlation.
WhalePanda, a pseudonymous crypto market commentator, echoed this sentiment, referring to a statement from Genesis about returning assets to creditors by converting GBTC shares into Bitcoin.
The selling pressure on GBTC has been further amplified by major liquidations in the crypto industry.
On February 14, Genesis received court approval to liquidate its $1.3 billion in GBTC shares to repay creditors.
Additionally, the bankrupt cryptocurrency exchange FTX liquidated all of its 22 million GBTC shares, valued at nearly $1 billion, just a month earlier.
As of March 21, Grayscale reported its Bitcoin Trust holds assets under management worth $23.2 billion, despite a $13.6 billion reduction since its conversion to an ETF on January 11.
These developments reflect the volatile nature of the cryptocurrency market and the interconnectedness of its participants.
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The anticipated green light for spot Ether exchange-traded funds (ETFs) might face delays beyond their final decision deadline in May.
Robby Greenfield, CEO of Umoja, a smart money protocol, highlighted to Cointelegraph the challenges large financial institutions face due to a lack of a clear strategy towards these ETFs.
He pointed out, “What makes it difficult for institutions to position themselves advantageously with Bitcoin, Ether and cryptocurrencies generally is that they can’t facilitate the same market manipulating functions as with previous commodities.
“You can’t create paper Bitcoin like you can create paper gold.” Several prominent firms, including BlackRock, Grayscale, and Fidelity, are in the race to launch an Ether ETF.
Despite these efforts, Bloomberg ETF analyst James Seyffart anticipates a rejection of the current Ether ETF applications in late May, referencing a March 19 post on X.
This expectation follows the United States Securities and Exchange Commission’s (SEC) recent postponement of its decision on the Hashdex and ARK 21Shares spot Ether ETFs, with a final verdict due by late May.
The unique challenges posed by the decentralized nature of cryptocurrencies like Ether complicate the development of institutional strategies for ETFs, though Greenfield believes approval is inevitable.
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He asserts, “Whether it gets approved in May or in December, it’s inevitable… I wouldn’t understand why it wouldn’t be approved, particularly given that even the SEC’s perspective on Ether has been increasingly one of it being a commodity rather than a security.”
The SEC has set specific deadlines for the decision on applications from various companies, ranging from May 23 to August 7.
Moreover, the hesitance of large institutional players to dive into decentralized finance (DeFi) stems from infrastructure inadequacies, which also deter traditional retail investor participation.
Greenfield emphasizes the need for more accessible investment strategies and infrastructure to bridge this gap, especially for retail investors who, despite owning a significant portion of global assets under management, face limited wealth creation opportunities.
To this end, Umoja has raised an additional $2 million, bringing its total seed funding to $4 million, aiming to democratize access to asset management strategies.
Greenfield underscores the importance of catering to retail investors, who are projected to hold a larger share of global assets in the coming years, according to World Economic Forum estimates.
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The Ethereum layer-2 blockchain Starknet has expanded the eligibility for its first round of Starknet provisions, now including two sub-categories of users who initially encountered difficulties in claiming STRK tokens.
This adjustment comes after the Starknet Foundation, the entity behind the Starknet network, resolved uncertainties about the eligibility of certain pre-Merge ETH stakers and Immutable X users for the Starknet (STRK) airdrop scheduled for February.
Following a detailed evaluation, eligibility has been extended to include VeVe users, non-VeVe StarkEx users mistakenly identified as VeVe users, and pooled stakers.
According to a communication shared with Cointelegraph, the new group of users now eligible for the February airdrop will be able to start claiming their STRK tokens in April. Starknet discovered inaccuracies in a list from Immutable, which incorrectly categorized many Immutable X users as VeVe users.
This list was crucial for distinguishing between users of the nonfungible token (NFT) platform VeVe, which manages its users’ private keys, and other users.
As a result of correcting these inaccuracies, Immutable X users who executed eight or more transactions before June 1, 2022, are now entitled to claim their airdrop.
The conversation around airdrops for VeVe users is ongoing between Starknet and the VeVe team.
Additionally, pooled ETH stakers faced hurdles in receiving their STRK due to various complications with the staking protocols.
However, some protocols have now provided Starknet with a list of users eligible for the airdrop, which will commence in April.
Starknet also revised its unlock schedule in February, following concerns that the original plan favored early investors at the expense of retail users, leading to a more equitable distribution plan over three years.
This change followed criticism from Starknet users who felt excluded from the STRK airdrop despite significant transaction volumes, largely because they did not meet the requirement of holding at least 0.005 ETH as of November 15, 2023.
After the STRK airdrop on February 20, substantial sell-offs by large holders led to a dramatic 60% drop in the token’s value, from a peak of $4.40 to $1.90, within just over two days.
The struggle to recover the price of STRK continues, with it currently trading at $1.88, according to the latest CoinGecko data.
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In a striking rebuttal to a proposed sentence of up to 50 years for former FTX CEO Sam Bankman-Fried (SBF), his legal representatives argue that such a penalty reflects an outdated, “medieval” approach to justice, misaligning with the actual severity of his offenses.
Attorneys Marc Mukasey and Torrey Young expressed their objections in a letter to Judge Lewis Kaplan, dated March 19, responding to the sentencing proposal made by the government on March 15.
Describing the prosecution’s narrative as overly harsh, Mukasey and Young accused it of painting Bankman-Fried as a “depraved super-villain” based on a skewed “loss” narrative.
This came after the United States prosecutors, on March 15, advocated for a sentence between 40 and 50 years for Bankman-Fried, who had been convicted of fraud and money laundering in November 2023.
This sentence, according to his lawyers, equates to a life sentence, a punishment they deem excessively harsh and unjust.
Arguing for leniency, Bankman-Fried’s lawyers proposed a significantly shorter prison term of five to six years. They disputed the claims of actual financial losses, pointing to the ongoing bankruptcy proceedings expected to fully compensate affected customers and lenders.
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Contrary to the depiction of Bankman-Fried as driven by greed, his legal team highlighted his philanthropic efforts and modest living, challenging the portrayal of him as a risk for future offenses due to low recidivism rates among similar offenders.
Moreover, they criticized the prosecution for allegedly unsupported allegations and misleading comparisons with sentencing in similar fraud cases, stressing that non-violent offenders rarely, if ever, face sentences as severe as 40–50 years.
Highlighting the personal and professional losses Bankman-Fried has already suffered, they suggested a more appropriate sentence range would be five to six and a half years.
This, they argued, would be more in line with justice, especially if the government believes in a chance for Bankman-Fried’s eventual reintegration into society.
The jury had found Bankman-Fried guilty on all seven counts nearly a year after FTX’s downfall, sparking a debate over the appropriate consequence for one of the most high-profile figures in the cryptocurrency industry.
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The Shiba Inu (SHIB) community is buzzing with anticipation following a cryptic post by the SHIB team on X, hinting at significant growth prospects amidst the current cryptocurrency bull market.
Despite a recent market downturn, CoinMarketCap data indicates that the meme-based digital currency is on a recovery path, albeit with an 8.24% decrease in the last day and a 17.43% fall over the previous week.
Undeterred by the recent dip in prices, the Shiba Inu team shared an engaging video featuring the SHIB mascot as the famed Batman signal, accompanied by the message, “Not the hero we deserve, but the one we need.”
This gesture has invigorated the Shiba Inu community, leading to various interpretations of the message’s deeper meaning.
Prominent community figure, SHIBKIND, speculated that the post might signal the near launch of an enhanced ShibaSwap decentralized exchange.
Meanwhile, LeonidasSHIB, another key community member, linked the teaser to statements by Shiba Inu’s lead developer, Shytoshi Kusama, suggesting SHIB’s potential ascent into the top five cryptocurrencies by market cap.
LeonidasSHIB expressed confidence in SHIB’s journey, emphasizing a future marked by dominance and greatness.
This optimistic outlook is supported by Shiba Inu’s recent performance, which saw a significant price increase earlier in the month, reminiscent of heights last reached in 2021.
With the community poised for a robust bull run, LeonidasSHIB anticipates an unprecedented display of strength from SHIB, suggesting an exciting future for the cryptocurrency.
The speculation extends within the community, with some members envisioning SHIB surpassing Dogecoin (DOGE) to achieve a $100 billion market cap.
The Shiba Inu team’s latest post on X has not only piqued interest but also amplified confidence in SHIB’s potential in the ongoing bull market, stirring investor optimism for what lies ahead.
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Despite a recent 15% drop from its all-time high of $73,738, analysts are optimistic about Bitcoin’s price surge following its upcoming halving event.
Charles Edwards, founder of Capriole Fund, addressed the volatility surrounding these periods in a March 19 X post, suggesting the year post-halving offers the best “risk-reward” for investors.
He anticipates the halving, expected between April 18 and 20, will lead to the shutdown of less efficient mining operations.
On 20, Bitcoin’s value dipped to $61,593 and has seen a slight recovery to $62,690, according to CoinGecko. Edwards remains hopeful for future price increases, citing a combination of reduced supply growth and increasing traditional finance (Tradfi) interest as key drivers.
In contrast, Ki Young Ju, CEO of CryptoQuant, attributes Bitcoin’s market dynamics to spot exchange-traded fund (ETF) flows rather than the halving itself.
He predicts mining expenses will soar post-halving, necessitating a price point that ensures profitability for miners, with direct costs per coin expected to hit around $37,000.
Crypto analyst Rekt Capital, sharing insights with over 430,000 followers on X, predicts further price drops but maintains a bullish outlook.
He indicates that Bitcoin is in a “danger zone” for pre-halving declines, referencing historical patterns.
Previous halvings saw significant price retractions before recovery; the 2020 event witnessed a 50% pullback attributed partly to the COVID-19 pandemic, with the market stabilizing around $10,000 thereafter.
The 2016 halving resulted in a 33% decrease in Bitcoin’s value, setting the stage for substantial gains by year-end and a bull market in 2017 with a peak of $20,000.
The 2024 halving enters somewhat unexplored territory, given Bitcoin’s current price levels and enhanced institutional support, particularly from spot Bitcoin ETFs, marking a departure from past trends.
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Binance, a leading cryptocurrency exchange, has demonstrated resilience in the face of actions by the United States Department of Justice against it and its co-founder Changpeng Zhao.
Impressively, its assets under custody have soared to over $100 billion as of March 18, marking a significant increase from $40 billion at the beginning of the year.
This remarkable growth has been attributed to the doubling of Binance users’ assets under custody. Binance emphasizes its commitment to security and transparency, noting, “We hold all user funds at a 1:1 ratio, plus additional reserves, which anyone can verify using Binance’s proof-of-reserves (POR) system.”
This system showcases the exchange’s robust collateralization ratios, with over 100% coverage for major cryptocurrencies and altcoins.
Despite this, experts caution that proof-of-reserves might not fully account for an entity’s liabilities, potentially omitting crucial details regarding net equity.
Nevertheless, Richard Teng, CEO of Binance, assures that the exchange operates on a “debt-free” capital structure.
The exchange also clarifies that while blockchain market intelligence firms offer valuable insights, their data may not perfectly capture the entirety of user funds on Binance due to the inclusion of operational assets.
Binance maintains that the most accurate figures regarding user asset holdings are available through their monthly POR audits.
In a strategic move, Binance announced on March 12 its decision to sever ties with its venture capital division, Binance Labs, despite the latter’s impressive track record of returns averaging over 14x on investments and a portfolio valued at $10 billion.
This separation underscores the independence of Binance Labs, which, while licensed to use Binance’s trademark, has no further association with the Binance exchange or any related entities.
This development highlights Binance’s continuous efforts to streamline operations and maintain transparency in its dealings, further cementing its position in the cryptocurrency market amidst regulatory scrutiny.
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CoinLedger, renowned for its cryptocurrency tax reporting software, has recently partnered with MetaMask, a leading Web3 self-custody wallet provider.
This collaboration, announced on March 18, aims to simplify the tax reporting process for MetaMask users by offering them an efficient way to integrate their transaction histories directly into CoinLedger’s platform with just a click.
This integration signifies a significant advancement in streamlining the tax preparation process for digital asset owners, eliminating the cumbersome task of manually compiling tax reports from various sources.
David Kemmerer, CoinLedger’s co-founder and CEO, highlighted the importance of this partnership to Cointelegraph, stating, “Users can now directly sync their portfolio with CoinLedger and then generate tax forms automatically directly from MetaMask Portfolio.”
He further emphasized the broader implications of this development, noting, “by reducing the friction associated with calculating and reporting taxes, we’re making the cryptocurrency ecosystem more accessible to everyone.”
This initiative is particularly timely, given the approaching April 15 tax deadline for many U.S. taxpayers.
The new functionality is a boon for those involved in the trading or ownership of cryptocurrencies and other digital assets, such as nonfungible tokens (NFTs) or Ordinals, as they navigate the complexities of tax reporting in the evolving digital financial landscape.
The discourse around cryptocurrency taxation is varied, with some experts calling for regulatory adjustments to prevent overreach by crypto entities and individual investors, while others question the feasibility of compliance with current tax laws.
In the midst of these discussions, the Biden administration is considering imposing a 30% excise tax on cryptocurrency mining operations, as reported by Cointelegraph.
This proposal targets companies engaged in digital asset mining, irrespective of their operational setup, with a phased tax implementation plan over three years.
According to Pierre Rochard of Riot Platform, this tax would affect all mining operations, including those utilizing renewable energy sources, underlining the extensive impact of the proposed tax measures on the cryptocurrency mining industry.
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In 2023, Bit Digital, a prominent Bitcoin mining company listed on the Nasdaq, reported a notable increase in its earnings, with a 39% rise to $44.9 million compared to the previous year.
The firm disclosed that it mined 1,507.3 BTC during the year, marking a 21% increase from 2022, valued at approximately $97 million at the current market rates.
This growth in revenue and mining output was attributed to an enhanced active hash rate, although challenges such as increased network difficulty slightly offset these gains.
By the end of 2023, Bit Digital’s total assets amounted to $189.3 million, with shareholders’ equity standing at $152.7 million.
Furthermore, the company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $12.4 million, alongside an adjusted earnings per share of $0.12.
Over the year, Bit Digital implemented several strategic adjustments to its mining hosting portfolio.
The company expanded its operations, ending the year with six hosting partners across seven sites in three countries.
A significant development was the extension of its activities to Iceland, a move aimed at benefiting from the region’s ample clean energy and favorable government policies.
This expansion underscores Bit Digital’s commitment to geographic diversification and the pursuit of cost-effective, carbon-neutral energy sources.
Amid fluctuating Bitcoin prices, Bit Digital remains focused on navigating the Bitcoin market’s cyclicality, eyeing sustained growth and resilience through all market phases.
The company anticipates that the trajectory of Bitcoin prices by the end of the year could set the stage for record highs in 2024.
Expanding beyond its core mining activities, Bit Digital announced its foray into artificial intelligence technology and digital infrastructure services.
This new venture includes offering rental services for graphics processing units (GPUs), marking a significant stride into digital service provision.
Notably, this diversification has already begun yielding financial benefits, with the company reporting $4 million in earnings from this new business segment in February 2024.
This strategic expansion reflects Bit Digital’s ambition to broaden its revenue streams and reinforce its position in the digital technology sector.
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On March 20, Bitcoin faced the possibility of dropping below $61,000 as experts cautioned that support levels might be on the verge of breaking.
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin’s price experienced further declines, reaching a low of $60,760 on Bitstamp.
Currently, Bitcoin has fallen 17.5% from its peak, contending with selling pressure due to several significant challenges.
Reports have highlighted factors such as withdrawals from the U.S.’s spot Bitcoin exchange-traded funds (ETFs) and the Federal Reserve’s decision on interest rates on March 20 as key contributors to the downward pressure on Bitcoin’s value.
Although the outcome of the Federal Open Market Committee (FOMC) meeting seems predictable, much attention is focused on Fed Chair Jerome Powell’s remarks for clues on the future of risk assets.
The Kobeissi Letter, a trading analysis source, remarked on the situation via X (formerly Twitter), stating, “With the Fed meeting less than 24 hours away, it’s unlikely the Fed changes rates tomorrow.
“However, all eyes will be on guidance after the recent events. We maintain the view that it is far too soon to pivot.”
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“Current projections from CME Group’s FedWatch Tool indicate only a 1% probability of a policy shift at the March 20 meeting, with a slight increase to 9.1% for the subsequent meeting in May.
“The situation is further complicated by consecutive days of net outflows from spot Bitcoin ETFs, according to data from the UK-based investment firm Farside.
Despite the outflows from the Grayscale Bitcoin Trust (GBTC) being less than the record $642 million on March 19, the reduced inflows to other ETF products resulted in underwhelming overall statistics.
Financial commentator Tedtalksmacro noted, “Almost $500M USD has flowed out of spot BTC ETFs in the past two trading days,” attributing the slowdown to traders’ cautious stance ahead of the FOMC meeting and the impact of tax season in the U.S.
He suggested, “Regular programming will resume, but some chop first.”
QCP Capital, in its daily bulletin to Telegram subscribers, pointed out the potential significant impact of the second consecutive day of net outflows on Bitcoin’s price stability, raising concerns over the ability of inflows to other ETFs to counterbalance the outflows and questioning whether this could lead to a net positive outcome.
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