2024-01-19 07:19

The ether- bitcoin ratio has risen 19% in the first three weeks of the year, taking back part of last year's 25% slide. Investors are likely to have a relook at ether as the spot ETF narrative gathers steam and Ethereum remains the dominant chain in the DeFi and NFT world, according to analysts. Ether is qualified to be a core holding in a diversified crypto portfolio, one observer said. Ether (ETH), the native token of Ethereum’s blockchain, underperformed bitcoin (BTC) in 2023, as the latter’s new-found smart contract, non-fungible tokens (NFT) narrative, and spot ETF optimism drew investor money. Per analysts, investors will likely have a relook at ether this year as Ethereum is still the world’s leading smart contract blockchain with key upgrades lined up, and ether is widely seen as the next likely candidate to get a spot-based ETF in the U.S. “ETH could be poised for a breakout year,” Nasdaq-listed crypto exchange Coinbase said in the weekly newsletter. “Last week’s bitcoin ETF news proved to be a boon for ethereum, which briefly spiked above $2,700 — reaching its highest price since May 2022. And there are reasons to be even more optimistic about ETH’s near-term future. For one, several of the firms behind the BTC ETFs — including BlackRock and VanEck — are also plotting ether-based spot ETFs.” A spot ETF invests in actual cryptocurrency, allowing investors to take exposure to the asset without having to own it, and is considered a better option than futures-based ETFs, which are vulnerable to roll costs. So, just as spot BTC ETFs, a potential launch of spot ETH ETFs is expected to open floodgates to institutional and retail money. Nearly a dozen bitcoin spot ETFs began trading in the U.S. last Thursday and have registered a cumulative volume of over $10 billion, with BlackRock’s product amassing $1 billion in inflows. Dencun upgrade and institutional demand In addition, Ethereum’s upcoming Dencun upgrade, which aims to improve the mainnet’s scalability by introducing “data blobs,” could galvanize investor interest in the cryptocurrency, according to Coinbase. The upgrade went live on Ethereum’s Goerli testnet early this week. A blob is a temporary transaction data memory typically related to Layer 2 solutions that can be attached to Ethereum. Following the upgrade to the mainnet, the network will only need to confirm the correctness of the blob data attached to the block rather than verify each transaction, helping reduce congestion and network fees. “Ethereum’s Dencun upgrade began initial tests on Wednesday and in coming months is expected to implement EIP-4844 (“EIP” stands for “Ethereum improvement proposal”), which some ETH watchers predict could help reduce network fees by 90% or more,” Coinbase noted. Institutional crypto firm ETC Group, in its annual report, discussed a bullish outlook for the ether-bitcoin ratio and explained that despite 2023's inscriptions-led boom in Bitcoin's network activity, Ethereum remains the dominant chain for building decentralized applications, NFTs, and tokenized assets. For instance, data tracked by ETC Group show, the top 10 ERC-20 tokens have a cumulative market value of $21 billion – or 13 times bigger than the $1.6 billion market capitalization of the entire BRC-20 token universe of over 37,000 coins. ERC-20 is Ethereum’s token standard, while BRC-20 is a fungible digital asset created on the Bitcoin network. Further, ether investors can generate extra returns on top of their holdings by staking or locking their coins in the network in return for rewards. The current annualized reward rate is around 3.84%, having averaged about 4% to 5% since Ethereum completed the Merge in September 2022. Lastly, Ethereum's feature of burning a portion of transaction fees paid in ETH has a deflationary effect on the token's supply, positively affecting investors. "The strong dominance of Ethereum in terms of smart contract platforms and the possibility to earn an additional source of yield imply that it should also be a core holding in a diversified cryptoasset portfolio as well," ETC Group said. "We therefore think that it is quite likely for the relative performance of ETH/BTC to reverse itself in 2024. In fact, ETH/BTC’s 12-month relative performance has historically shown a strong tendency to mean revert," ETC Group added. Ether has outperformed bitcoin so far this year, with the ether-bitcoin ratio (ETH/BTC) trading 10% higher. The ratio tanked over 25% last year. https://www.coindesk.com/markets/2024/01/19/ether-could-soar-in-2024-on-the-back-of-dencun-upgrade-etf-narrative-analysts/

2024-01-19 06:57

Bloomberg's Eric Balchunas pointed out that GBTC shares flipped to a 0.9% discount versus net asset value amid "likely due to selling pressure." Futures traders betting on higher crypto prices saw some $217 million in liquidations in the past 24 hours as the approval of spot bitcoin (BTC) exchange-traded funds continues to be a “sell-the-news” event, a contrarian bet that shows no signs of slowing. Concern that crypto fund manager Grayscale is selling some of its bitcoin as owners of its Grayscale Bitcoin Trust (GBTC) remove money from the ETF contributed to a drop in prices. Verified wallets belonging to Grayscale, tracked and labeled by analysis firm Arkham, show that the fund moved over $400 million worth of bitcoin to custodian Coinbase Prime on Thursday – potentially a step toward an eventual sale. Bloomberg Intelligence analyst Eric Balchunas also pointed out that GBTC shares flipped to a 0.9% discount versus their net asset value on Thursday “likely due to selling pressure.” Even as GBTC sees net outflows, other newly approved bitcoin ETFs are seeing net inflows. BlackRock’s IBIT crossed $1 billion in assets under management (AUM) on Wednesday. Bitcoin fell below $42,000 late Thursday, down 3.7% since Thursday and 15% from the December run to $49,000. It led to a market-wide retreat, with ether (ETH) falling 2.5%, Solana’s SOL falling 6.5%, and Cardano’s ADA down 5%. BNB Chain’s BNB outperformed the market and was up 0.6%, buoyed by launchpads on the closely related Binance exchange, where users can stake BNB to gain an allocation of new projects listed on the platform. The price drop caused highly leveraged futures betting on higher prices to see $217 million in losses, with bitcoin trades taking on $88 million in liquidations alone. Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader cannot meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open). Meanwhile, some traders said in a Friday note that they expect broader crypto markets to be range-bound in the short term. “BTC is hovering above the $40,000–$42,000 zone, which is likely to act as short-term support,” said Rachel Lin, CEO and co-founder of Singapore-based SynFutures, in an email. “Overall, the past week can be summed up as the calm after the storm. The ETF mania phase is over, and the market is moving sideways, looking for the next trigger.” https://www.coindesk.com/markets/2024/01/19/crypto-bulls-lose-217m-as-apparent-grayscale-sales-weighs-on-bitcoin/

2024-01-18 21:34

The newly launched bitcoin exchange-traded funds already have nearly $30 billion in assets under management. Silver ETFs only have $11 billion. Silver has existed since dying stars started spewing the metal out billions of years ago. Bitcoin is 15 – but it’s already a bigger deal in the U.S. ETF market. Bitcoin ETFs had more assets than silver ETFs the instant the U.S. Securities and Exchange Commission approved them last week, and trailed only gold among commodity-focused U.S. ETFs. Thanks to the conversion of the existing Grayscale Bitcoin Trust into an ETF, there was immediately almost $30 billion stashed in bitcoin ETFs, according to data compiled by CoinDesk. Silver ETFs have combined assets of about $11 billion, according to a etfdb.com. The only commodity that remains more popular is gold – which bitcoin is often called a digital version of – with roughly $95 billion. “This was way beyond my short term expectation but is a fantastic validation of bitcoin’s role as a reserve product and of the demand for bitcoin exposure in financial markets,” 21Shares co-founder Ophelia Snyder, who launched one of the ETFs in partnership with Ark Invest, wrote on X (formerly Twitter). The launch of bitcoin ETFs earlier this month marked a historic event not just for the cryptocurrency community but for ETFs, too. The newly launched funds saw roughly $894 million in net inflows within the first three days of trading, significantly higher than most fresh ETFs bring in. https://www.coindesk.com/markets/2024/01/18/bitcoin-instantly-topped-silver-in-etf-market-and-trails-only-gold-among-commodities/

2024-01-18 20:31

Buyers of these Bitcoin ordinals can't trade them for almost a year. Donald Trump is out with his latest digital collectible gimmick: Something resembling an NFT on the Bitcoin blockchain that effectively costs $9,900 but, unlike normal NFTs, cannot be traded by its owners anytime soon. The former U.S. president's NFT venture announced in a post on X that collectors who pay $99 apiece for 100 of his "mugshot edition" NFTs – issued in December on the Polygon blockchain – will also get a unique card in the form of an ordinal – an NFT-like digital asset on the Bitcoin blockchain. Read More: Donald Trump Vows to 'Never Allow' Central Bank Digital Currencies if Elected "The First Ever Trump Trading Cards officially created the Bitcoin Blockchain!" read part of the announcement tweet thread that featured grammatical errors and non-standard capitalization. The offer is apparently meant to drum up sales of Trump's most recent NFT collection. At max, only 200 of these "one of one" ordinals will be minted, according to the post. But buyer beware: the ordinals, as well as the 100 NFTs that one must buy to get it, cannot be traded by their owners until December 2024. The thread said this limitation is meant to restrict their appeal as "investment vehicles," but in so doing, it also severely denigrates their appeal as NFTs. https://www.coindesk.com/business/2024/01/18/donald-trumps-nfts-have-limits-normal-ones-dont/

2024-01-18 15:46

The stablecoin issuer announced in May 2023 that it would start buying bitcoin in an effort to diversify the backing of its USDT stablecoin. Tether added to its bitcoin (BTC) holdings at the end of the fourth quarter, buying 8,888 more BTC for $380 million, The Block reported. An address associated with the company shows bitcoin holdings of 66,465, which makes it the 11th-largest holder of the cryptocurrency, according to a ranking by Dune Analytics. In an effort to shift away from cash and cash-like assets such as U.S. Treasury bonds backing its USDT stablecoin, Tether announced in May 2023 that it would start allocating as much as 15% of its profits into bitcoin. USDT is the world's largest stablecoin with a market capitalization of over $95 billion. In its latest attestation report, Tether held $72.6 billion in government bonds and $1.7 billion in bitcoin, among other allocations. The company has long been under the microscope for the quality of its assets, but Cantor Fitzgerald CEO Howard Lutnick, whose firm acts as a custodian for Tether, this week reassured skeptics that its holdings are legit. The Switzerland-based company first purchased bitcoin in September 2022. https://www.coindesk.com/markets/2024/01/18/tether-purchased-another-89k-bitcoin-for-380m-remaining-11th-largest-btc-holder/

2024-01-18 12:51

IBIT’s holdings consist of 99% bitcoin, and nearly $60,000 in fiat, data shows. BlackRock’s (BLK) spot bitcoin (BTC) exchange-traded fund (ETF) hit the $1 billion assets under management mark on Wednesday, becoming the first of the recent cohort of bitcoin ETF providers to hit the milestone. The asset manager's iShares Bitcoin Trust (IBIT) started trading on Jan.12. “We are excited to see IBIT reach this milestone in its first week, reflecting strong investor demand,” Robert Mitchnick, Head of Digital Assets at BlackRock said via an email. “This is just the beginning. We have a long-term commitment focused on providing investors access to an iShares quality ETF.” IBIT’s holdings consist of 99% bitcoin, and nearly $60,000 in fiat, data shows. The fund held 25,067 token per an updated on Thursday. IBIT closed Wednesday trading at $24.41 and trades at a slight premium of 0.42% relative to spot bitcoin. The fund has recorded an average daily trading volume of 14 million shares so far, the data shows. https://www.coindesk.com/markets/2024/01/18/blackrocks-bitcoin-etf-hits-1b-aum-in-one-week/