Bitcoin's Peekaboo 🙄
Bitcoin's Peekaboo 🙄
Bitcoin's price plummets over 10%, triggers ETF concerns. Thanks, Matrixport. Crypto sees $2.2 billion in inflows. Fundraising surges. US holds more. Goldman Sachs may become an AP.
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Bitcoin briefly dipped, promptly sparking a flurry of speculations and negative chatter in mere minutes.
Bitcoin's price dropped over 8% to $40,800 on Jan 3.
Read this: A Cold Red Birthday 🔻
A sceptical report on Bitcoin ETF approval emerged.
Jihan Wu, founder of Matrixport, stated the widespread sharing of their Bitcoin ETF report was unintended and beyond their control.
Matrixport analysts suggested the SEC might reject spot Bitcoin ETF proposals due to a Democratic-dominated Commission.
The report: Why the SEC will REJECT Bitcoin Spot ETFs again
Matrixport analyst Markus Thielen wrote
“SEC Chair Gensler is not embracing crypto in the US, and it might even be a very long shot to expect that he would vote to approve bitcoin spot ETFs … This might be fulfilled by Q2 2024, but we expect the SEC to reject all proposals in January.”
Their Source? “Trust me bro.”
Now, these are the same people who said Bitcoin will hit $125,000 by the end of 2024.
Wu says that Matrixport analysts work independently, without influence from management.
Wu attributed the Bitcoin price drop to high funding fees in perpetual markets and a downturn in crypto-related stocks (and not the report).
And he didn't forget to add
"In my opinion, the approval of a Spot ETF by SEC, which will attract fresh investment into Bitcoin, is inevitable."
Here's what happened:
X members were disappointed:
However, Bitcoin survived (that's all we want to know, eh?):
Bloomberg Intelligence analyst Eric Balchunas says
“Is there some remote possibility that upper, upper echelons of government step in and pull the plug on [the spot bitcoin ETFs]? I guess. But it would overturn a lot. It would…overturn a lot of reporting, a lot of effort, a lot of work and a lot of signalling from the staff.”
Liquidation: The crypto market experienced nearly $514 million in long liquidations amid the price drop.
Now, did the report actually cause the dip?
Crypto litigator Joe Carlasare attributes the decline to market overbuying and a long squeeze.
Others question the link between the report and the price drop.
TTD Numbers 🔢
$2.2 billion
Total inflows in cryptocurrency investment products in 2023, according to CoinShares.
Increase from 2022, where total inflows were $816 million.
Still falls short of the $6.6 billion in 2020 and $10.7 billion in 2021.
Bitcoin Funds: Bitcoin funds saw the largest inflows, with over $1.9 billion, accounting for 86% of the total inflows.
Other Cryptocurrencies' Performance
Solana (SOL) recorded $167 million in inflows.
Multi-asset and Binance Coin (BNB) exchange-traded products (ETPs) experienced net outflows.
US Vehicles' Contribution: US-based investment vehicles contributed $792 million to the year's asset gains.
ProShares' Leading Role: ProShares led issuer inflows with $640 million, largely from its bitcoin futures ETF.
The ProShares Bitcoin Strategy ETF (BITO) saw $506 million in net flows in 2023.
ProShares also launched ether futures ETFs, but these hold about $20 million in combined assets.
Crypto Fundraising
According to Messari data, there was an 81% increase in total deal volume in Q4 of 2023, amounting to $3.83 billion.
Significant Investment Rounds:
Blockaid secured $33 million.
Ritual raised $25 million.
Drift completed a $23.5 million funding round.
Blast received $20 million.
Privy closed a deal at $18 million.
TTD The US 🇺🇸
The US government's Bitcoin holdings have risen to at least $8.3 billion, up from $5 billion in recent months.
Over the past decade, the US has seized 207,189 Bitcoin in three major actions related to Silk Road, Jimmy Zhong, and Bitfinex hackers.
Sales and Potential Value
Less than 5% of the seized Bitcoin has been sold, including a sale of 9,861 BTC for $215 million.
If the US had held all its seized Bitcoin, its holdings could have been around 400,000 BTC, worth $17.4 billion.
There's speculation about further sales of Silk Road Bitcoin, with no confirmed timeline for selling the Bitfinex hackers' seized Bitcoin.
The US potentially has one of the largest government Bitcoin stashes, surpassing other countries like El Salvador and Finland.
China seized 195,000 BTC from the PlusToken Ponzi scheme in 2020, which could put its holdings on par with the US if it hasn't sold.
Where’s ETF? 🚨
BlackRock, the world's largest asset manager, is reportedly planning to purchase $10 million worth of Bitcoin on January 3rd to seed its Bitcoin ETF👇🏻
TTD AP 🫡
Goldman Sachs may become an "authorised participant" (AP) for BlackRock and Grayscale's Bitcoin ETFs, pending SEC approval.
Role of an Authorised Participant: As an AP, Goldman Sachs would be responsible for creating and redeeming ETF shares, ensuring they align with the underlying assets.
JPMorgan Chase, Jane Street, and Cantor Fitzgerald have also been announced as APs for various Bitcoin ETFs.
Each Bitcoin ETF is anticipated to have 5 to 10 APs, with more major firms likely to join.
ETF Approval Timeline: The SEC is expected to make a decision on the spot bitcoin ETFs between Jan. 8 and Jan. 10.
TTD Poll ✅
A Security.org poll of 1,500 Americans indicates increasing crypto adoption, with 40% currently owning crypto, a 10% increase from last year.
Impact of Spot Bitcoin ETF Approval:
21% of non-crypto owners are more likely to invest if a spot bitcoin ETF is approved.
46% believe ETF approvals will positively impact the blockchain industry.
63% of current crypto owners plan to buy more cryptocurrency, mainly Bitcoin, Ethereum, Dogecoin, and Cardano.
There are 13 active spot bitcoin ETF applications with the SEC, with a decision deadline for the earliest one on Jan. 15.
The Bitcoin price has been increasing in anticipation of potential ETF approval.
Demographics of Crypto Owners: Crypto investors are typically young and male, but female participation is growing.
TTD Surfer 🏄
Decentralised exchange dYdX has published a post-mortem on a targeted attack in November that resulted in a $9 million loss in its insurance fund.
Cboe has accepted the registration for listing shares of a spot Bitcoin ETF proposed by Fidelity Investments.
South Korean gaming firm Wemade has revealed that it owes $41 million in unpaid taxes to the country's tax authorities.
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