Ah yes, the GLD technique...
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BlackRock updates spot bitcoin ETF proposal to allow cash redemptions ...
... Goldman Sachs' Crypto team note that 2023 has shown just how much the market structure and participation have evolved and become institutionalized.
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But by Q4, Goldman Sachs observed that “a consistent increase in bitcoin (BTC) and ether (ETH) futures and options trading, and in Q4 has become the top BTC futures exchange by open interest.”
The result of this was that the open interest for Bitcoin alone topped $4 billion in Q4. This sudden spike in institutional interest in future and options trading has to do with the potential Bitcoin spot ETF approval. ...
Yah.Ah yes, the GLD technique...
Representatives from BlackRock (BLK), Nasdaq, and the Securities and Exchange Commission (SEC) met for the second time in a month to discuss rule changes that are necessary to list the bitcoin (BTC) exchange-traded fund (ETF), according to a published memo.
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Solana (SOL) has overtaken XRP as the fifth-largest cryptocurrency, with its market cap hitting a 20-month high of $33.7 billion, according to CoinMarketCap.
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The exchange serves over 200 countries and more than 6 million users. It holds key licenses in countries like Australia, Estonia and the United States.
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The company is headquartered in Seychelles.
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Tether, the operator of the world’s largest stablecoin, the eponymous Tether (USDT), has minted another billion USDT, which is “authorized but not issued,” according to CEO Paolo Ardoino.
Blockchain tracking platform Whale Alert took to X (formerly Twitter) on Dec. 25 to alert users that Tether Treasury had minted 1 billion USDT ($1 billion).
Tether CEO Ardoino subsequently responded with a public service announcement in the Whale Alert’s X thread, stating that the transaction was an “inventory replenish” on the Ethereum blockchain.
“Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps,” Ardoino stated.
In traditional finance, inventory replenishment is the process of ordering stock from suppliers in time to meet customer demand and avoid stock shortages without stockpiling surplus inventory. In Tether’s terms, inventory replenishment is the process of creating new USDT that are stored in Tether’s treasury inventory as “authorized but not issued” USDT.
“These tokens are not part of the total market capitalization of USDT, as they have not been issued or released into circulation yet,” Tether’s FAQ reads.
According to data from the Tether Transparency page, $925 million in USDT is “authorized but not issued” on Ethereum as of Dec. 26, 2023.
Ardoino’s latest PSA echoes the language of a previous 1 billion USDT mint in September 2023, when Whale Alert flagged a similar transaction. On that occasion, Ardoino also said that the USDT transaction was an authorization and not an actual issuance, with the allocated amount set to serve as inventory for upcoming issuance requests and chain swaps on the Tron network.
Some online industry watchers have expressed skepticism about Ardoino’s latest PSA and the lack of transparency associated with Tether’s authorized but not issued transactions.
“It would be interesting to examine the document or agreement and learn more about the individuals responsible for this Christmas miracle of creating 1 billion USDTs of thin air,” one commenter wrote, asking whether Ardoino is one of the individuals responsible for such decisions.
Some skeptics also argued that the latest USDT mint will likely be used to increase the price of Bitcoin (BTC), as some industry observers have linked Tether’s USDT minting to BTC price pumping.
“Say it directly you minted it to pump BTC,” one commenter responded in the thread.
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MicroStrategy (MSTR), the largest corporate holder of bitcoin (BTC), added more to its holdings on Wednesday, buying 14,620 BTC for around $615.7 million.
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The recent purchase pushes the company's holdings to 189,150 BTC worth around $5.9 billion, which was bought at an average price of $31,168 per BTC.
MicroStrategy began purchasing bitcoin in August 2020. The company's most recent purchase before Wednesday's took place last month, where it purchased 16,130 BTC, worth around $608 million at the time.
In a separate filing, the company said it had raised $610.1 million from its previously announced at-the-market (ATM) shares offering of $750 million.
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Bitcoin (BTC) is expected to correct to as low as $32,000 next month following the potential approval of a spot ETF, according to data provider CryptoQuant.
In what is being described as a potential "sell the news" event, CryptoQuant said in a note to CoinDesk that trader's unrealized profits are currently lingering at a level that historically precedes a correction.
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"Short term Bitcoin holders are experiencing high unrealized profit margins of 30%, which historically has preceded price corrections (red circles)," CryptoQuant wrote in the note. "Moreover, short term holders are still spending Bitcoin at a profit, while rallies usually come after short-term losses are realized."
CryptoQuant added that bitcoin price may decline to as low as $32,000, which is the the short-term holder realized price.
Capriole Investments said that "conservative portfolio management" makes sense in the lead up to the potential approval of a spot ETF.
"With Bitcoin up over 60% since ETF mania began a few months ago, and with every man and his dog on X.com expecting an approval on or around 10 January, we must start to anticipate much larger volatility events (up/down) in this region. Risk today is substantially higher for long Bitcoin positions than it was just a few weeks ago," Capriole wrote in a blog post.
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On Friday at 08:00 UTC, a staggering $7.7 billion worth of options tied to bitcoin (BTC) and $3.5 billion of options linked to ether (ETH) will expire on the crypto exchange Deribit.
"The total of over $11 billion marks Deribit's largest expiry thus far, of which almost $5 billion will expire in the money, the largest amount ever as well, potentially resulting in above average hedging and trading activity," Luuk Strijers, the exchange's chief commercial officer, told CoinDesk.
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On Wednesday, just over 28,000 BTC worth $1.19 billion left centralized exchanges, the largest single-day outflow in BTC terms since Dec. 14, 2022, according to data tracked by blockchain analytics firm Glassnode.
Net outflows from exchanges are often taken to represent investors' intention to take direct custody of coins or preference for a long-term holding strategy.
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The overall BTC balance in wallets tied to centralized exchanges has dropped to 2,327,025 BTC, the lowest since April 2018. Other things being equal, fewer coins on an exchange mean weakening supply-side pressures and potential for price appreciation.
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The U.S. Securities and Exchange Commission said last week that spot Bitcoin ETF applicants must file final S-1 amendments by Dec. 29. The regulator also required them to sign an agreement with an authorized participant (AP) and sort out the cash-create redemption model it favors.
The deadline means that on Dec. 29, the community will likely find out which spot Bitcoin ETF filers out of 14 applicants could be in the first wave of potential spot BTC ETF approvals, which is largely expected in early January.
According to Bloomberg senior ETF analyst Eric Balchunas, many ETF applicants have updated their filings with the cash-create redemption model. As of Dec. 22, seven applicants had their filings fixed to cash-create, while the other seven included both cash-create and in-kind models in their registration statements.
Most existing ETFs involve in-kind creation, meaning that when the intermediaries want to make new ETF shares, they give firms like BlackRock funds using actual assets like Bitcoin.
“And that’s how 90% of ETFs work is in-kind. Only 10% are cash,” Balchunas said in an interview with Cointelegraph on Dec. 28.
The reason the SEC wants the cash model for spot Bitcoin ETFs is that they want to minimize the number of intermediaries that have access to the actual Bitcoin in the redemption and offering process, the ETF analyst believes.
“They don’t like the idea of broker-dealers who are the intermediaries touching Bitcoin,” Balchunas noted. “Many were going to create unregistered subsidiaries to act in place of the actual broker-dealers, but the SEC just didn’t want it,” the ETF analyst said.
The SEC wanted to “close the loop a little more,” Balchunas said, ...
Two spot bitcoin exchange-traded fund (ETF) applicants, BlackRock and Valkyrie, have named two authorized participants (AP) for their yet-to-be-approved ETF, filings show.
BlackRock was the first applicant to announce who will acquire the bitcoin on behalf of BlackRock, which is not legally allowed to purchase the cryptocurrency itself. The asset manager has teamed up with J.P. Morgan and quantitative trading firm Jane Street, a filing shows. Valkyrie has also named Jane Street in addition to Cantor Fitzgerald as AP, another filing shows. Many ETF issuers will likely have multiple authorized participants.
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Bitcoin slid 8% on Wednesday as jitters around the anticipated approval of a spot bitcon (BTC) ETF began to enter the market.
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Financial services firm Matrixport rebuffed optimistic expectations, saying: "We believe all applications fall short of a critical requirement that must be met before the SEC approves. This might be fulfilled by Q2 2024, but we expect the SEC to reject all proposals in January."
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Bloomberg ETF analyst Eric Balchunas said during U.S. afternoon hours that the agency was providing final comments on the applications, with prospective issuers then to update their filings accordingly.
Shortly after, TechCrunch reporter Jacquelyn Melinek said that the SEC will soon approve multiple applications, citing sources "extremely close to the matter."
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BlackRock (BLK), VanEck, Invesco and Galaxy, ARK 21Shares, Grayscale and other prospective issuers among 13 hoping to launch bitcoin (BTC) exchange-traded funds (ETFs) in the U.S., have filed updated documents on Tuesday.
The filings indicate that the entities were among the prospective issuers that the U.S. Securities and Exchange Commission (SEC) sent comments in the past 24 hours. CoinDesk reported earlier that the SEC sent comments to a set of prospective issuers of the spot-bitcoin ETFs just hours after the companies filed documents detailing fees for their proposed products on Monday.
Among the changes in the latest updated filing on Tuesday is wording that seeks to mitigate damage to shareholders in the event of insolvency and avoid a conflict of interest between the ETF’s authorized participants.
Invesco and Galaxy's updated filing saw them reduce the fee they plan to charge to 0.39% from the earlier 0.59%.
The latest filings show an almost unprecedented engagement between the SEC and prospective issuers, with filings following SEC responses and then updated filings within a short span of 24 hours.
The SEC is widely expected to approve all the applications this week as it faces a Jan. 10, 2024 deadline – i.e. this Wednesday – for one of the applications by Ark and 21 Shares and may want to approve all together in the spirit of fairness.
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