Crypto weekly update
29. June 2023  • clock 3 min •  Daniel Mitrovsky

BlackRock Bitcoin ETF – Market Info

Over the past two weeks, the total market capitalisation exceeded EUR 1.08 trillion. The increase in market capitalisation over a 14-day period is 10.76%. The price of Bitcoin has risen by 17.15% over the last 14 days to a current value of over €28,000. Bitcoin’s dominance is currently around 50.4%.


BlackRock Bitcoin ETF

BlackRock, the world’s largest asset manager with over $10 trillion in assets under management, has filed an application with the US Securities and Exchange Commission (SEC) to launch a bitcoin spot ETF. So far, there is no bitcoin-focused spot ETF in the United States, as all attempts to launch products of this kind have been cold-bloodedly brushed off by the SEC.

The reason for the rejection of spot BTC ETFs has always been the same. US regulators have long been unhappy with the unregulated and, in their view, manipulative nature of the crypto space, claiming that the market is still susceptible to fraud. However, the SEC has in the past approved several ETFs focused on bitcoin futures, which do not directly purchase bitcoin as the underlying asset, as is the case with spot ETFs, but only purchase bitcoin futures contracts. A futures contract is a contract between two parties that is entered into in the present and carries an obligation to buy or sell an asset or assets in the future at a specific price on a specific date.

However, BlackRock’s request for a spot ETF comes at a time when the SEC is taking action against crypto exchanges and crypto projects operating in the United States. Just a few weeks ago, the SEC charged crypto exchanges Binance and Coinbase with multiple violations, such as violating securities laws, providing staking services or, in the case of Binance, unregistered sales of BNB and BUSD cryptocurrencies. The SEC also published a list of more than 60 cryptocurrencies that it views as securities, while also accusing crypto exchanges of providing trading facilities for these assets.

BlackRock’s ETF, named in the filing as the „iShares Bitcoin Trust,“ would directly own physical bitcoins, which will be held in Coinbase’s custody. The fund will be listed on the Nasdaq exchange and the price will be calculated daily based on the CME CF reference price. All shares issued by the company will be fully backed by the Bitcoin cryptocurrency, and the company will not be able to issue any new shares without first making a direct purchase of BTC.

However, market experts believe that BlackRock will succeed in pushing through the launch of its product because the product has been filed with the SEC as a bitcoin trust but has the same functionality and substance as a spot ETF. BlackRock also has a very high success rate in ETF filings with the SEC, as historically only one of BlackRock’s 576 filings has been rejected. That is why many analysts think that this time will be no different, and BlackRock will become the first company with a bitcoin spot ETF.

A spot ETF from BlackRock could bring a lot of new institutional investors into the cryptocurrency market, especially into Bitcoin, and would be a significant bullish signal for the cryptocurrency market ahead of the coming halving. The cryptocurrency market could be entered by players who don’t want to worry about buying and storing Bitcoin directly and don’t plan to use Bitcoin for payment purposes. Source

IMF Changes Its Attitude Towards Cryptocurrencies

The International Monetary Fund (IMF), responsible for the global financial system and helping its members maintain financial balance, is changing its stance on cryptocurrencies. After suggesting to countries in the past to consider banning cryptocurrencies, the IMF has come up with a very interesting and unexpected statement.

Last week, IMF economists published a report that examined the use of cryptocurrencies in Latin America and the Caribbean. Acceptance of cryptocurrencies in the region varied across countries, with some countries, including El Salvador, being more open to cryptocurrency adoption versus others that are more cautious about the risks involved. At the same time, in their report, the IMF economists leaned towards a position of closer adoption of cryptocurrencies, but under conditions of good regulation.

„While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run,“ the economists said in the conclusion of their analytical report.

This is a significant change of stance by the IMF, which only a few months ago said in its report that countries should consider banning the use of cryptocurrencies. However, in their latest report, IMF economists state that cryptocurrencies offer a number of benefits to their users. For example, they said that, among other benefits, cryptocurrencies offer protection against macroeconomic uncertainty, promote financial inclusion and ensure faster domestic and international payments. Source

Riot Platforms Expands Its Mining Activities

Riot Platforms, one of the largest Bitcoin mining companies, is expanding its mining operations with the purchase of 33,280 pieces of next-generation mining equipment for its Texas plant in a deal valued at $162.9 million.

The mining equipment from manufacturer MicroBT will increase the company’s mining capacity by 7.6 exahash (EH/s), and the purchase comes just as the cryptocurrency market is slowly recovering and preparing for the next Bitcoin Halving, which is likely to take place in April next year.

Riot Platforms‘ CEO, Jason Les, said that the involvement of the new facilities, which should be ready in the first quarter of 2024, will increase the company’s mining capacity up to 20.1 EH/s. Of the 33,280 new devices, 8,320 are M56S+ models with a hashing capacity of 220 terahash (TH/s), and the remaining 24,960 devices are M56++ models, which are slightly more powerful with a hashing capacity of 230 terahash (TH/s).

Riot also said it has the option to purchase an additional 66,560 M56++ models by 31 December 2024, which could increase the company’s total computing power by an additional 15.3 EH/s. The company may choose to exercise this option in whole or in part. Source

US Financial Institutions Launch Their Own Cryptocurrency

That more and more companies from the traditional financial world are trying to break into the world of cryptocurrencies is no surprise. However, crypto enthusiasts in the United States were surprised a few days ago by some interesting news regarding the launch of a new crypto exchange.

The newcomer among crypto exchanges operating in the cryptocurrency market is to be EDX Markets, which has received significant support from Wall Street giants, including companies such as Citadel Securities, Fidelity Investments and Charles Schwab. The crypto exchange reportedly launched trading on 20 June for industry leaders and will look to build on best practices from traditional finance to bring the most comprehensive and secure crypto services to customers.

As further stated in the announcement, EDX will offer a non-custodial model that aims to mitigate conflicts of interest. In addition, the platform has introduced quotation services for retail traders, which will allow participants to benefit from improved pricing for retailer-initiated order trading. Later this year, the exchange plans to introduce EDX Clearing, which will provide settlement of trades paired on EDX markets.

The emergence of a crypto exchange backed by major players from the world of finance is proof that Wall Street companies see the enormous potential of cryptocurrencies and want to get involved in this innovative sector. However, the timing of the launch of this crypto exchange is highly questionable, as the SEC is currently cracking down heavily on crypto exchanges and crypto companies operating in the United States. Source

Binance Provokes the SEC

The answer didn’t take long. Perhaps this is a simplistic way to describe the latest actions of Binance, the largest crypto exchange, which decided to take a counter-offensive against the US Securities and Exchange Commission (SEC).

According to available information, Binance has filed a motion accusing the SEC of ethical violations. According to former SEC Internet enforcement official John Reed Stark, this motion by Binance is very provocative and, in his opinion, will significantly accelerate the litigation between the two institutions.

The former SEC official explained in a tweet on the social networking site Twitter that Binance’s motion asks the judge to prevent SEC lawyers from claiming that Binance and its director Changpeng Zhao (CZ) mishandled the company’s assets. The regulator, they said, has presented no evidence of improper use of client funds.

According to the SEC, Changpeng Zhao and Guangying Chen were to move billions of dollars of customer funds through their holding company. Binance, however, has denied the allegations and denied that it commingled client funds with company funds. However, the former executive thinks Binance will regret this move.

Stark also acknowledged the potential benefits of Binance’s move, including that the proposal may force the SEC to be more cautious and restrained in its statements regarding crypto exchanges, including statements and allegations against Binance. Source

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Daniel Mitrovsky


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