Category: Cryptocurrency

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The US Securities and Exchange Commission has yet to decide on spot Ethereum exchange-traded funds. On May 16, Billy Markus, co-founder of Dogecoin, expressed his doubts about their approval, suggesting that the SEC is “compromised” and may reject the ETFs.

Markus made his skeptical comment in response to a social media post discussing the importance of spot Ether ETFs for the ecosystem and the potential impact of a negative decision on Ethereum. He tweeted, “nothing good will come out” of the spot ETH ETF application.

Markus’ comment reflects a broader pessimism about the SEC’s ability to make fair and unbiased decisions regarding Ethereum and cryptocurrency. Despite his skepticism, he believes the regulator’s decision on spot Ether ETFs won’t negatively impact Ethereum’s trajectory or the cryptocurrency market as a whole. This sentiment echoes the prevalent skepticism surrounding spot Ethereum ETFs.

Recently, finance lawyer Scott Johnsson suggested that Ethereum’s legal classification will play a crucial role in the upcoming ETF decisions, highlighting a key distinction in the SEC’s approach to Bitcoin and Ethereum. While Bitcoin’s security status wasn’t a major focus during spot ETF filings, Ethereum’s classification is receiving more regulatory scrutiny, indicating a shift in focus for digital assets.

The upcoming decision dates for VanEck and ARK Invest’s applications for Ethereum ETFs, scheduled for May 23 and May 24, respectively, have sparked intense speculation within the crypto industry. The potential approval of Ethereum ETFs carries symbolic importance, solidifying crypto’s legitimacy as an asset class and reaffirming its role in the evolving financial industry.

The SEC’s recognition of Ethereum’s non-security status, demonstrated by the approval of an Ethereum futures ETF for trading in October 2023, established a clear precedent for the approval of a spot Ethereum ETF. Experts believe any deviation from this path would create regulatory uncertainty and weaken market confidence.

Hong Kong’s approval of spot Bitcoin and Ethereum ETFs, as well as their trading, underscores the increasing global acceptance and recognition of the potential of Ethereum-based financial instruments.

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JPMorgan (NYSE:JPM) estimates that the current cost of mining Bitcoin has dropped to around $45,000, down from over $50,000. This decrease follows the quadrennial halving event last month, which cut miner rewards by 50%.

The hashrate, which measures the total combined computational power used for mining and processing transactions on the Bitcoin network, did not immediately fall post-halving as expected. According to JPMorgan, this delay was due to the launch of the Runes protocol, a new form of token creation that temporarily spiked transaction fees, boosting miner revenue and offsetting the reduced issuance rewards from the halving.

“This provided a temporary boost to miner revenue in the immediate aftermath of bitcoin halving,” analysts led by Nikolaos Panigirtzoglou wrote. However, the report noted that the increase in fees was short-lived, with user activity and fees dropping significantly in recent weeks. This decline highlights the ongoing challenge for bitcoin miners to maintain sustainable revenue, particularly in the post-halving environment.

As the Runes hype faded, network power consumption fell more than the hashrate, indicating that unprofitable miners with inefficient rigs have exited the network. The report explains that there’s a feedback loop with Bitcoin prices: as prices decline, more unprofitable miners are pressured to leave the network, leading to a larger drop in hashrate and mining costs.

JPMorgan does not foresee any near-term upside for Bitcoin prices due to several headwinds, including the lack of positive catalysts and diminishing retail interest.

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Mastercard (NYSE:MA) has announced the selection of five startups to participate in its digital assets program, which aims to foster the development of blockchain use cases.

The chosen startups will join Mastercard’s Start Path blockchain and digital assets program, focusing on the creation of blockchain use cases and user experiences.

Through this initiative, Mastercard (MA) will collaborate with industry experts and fintech firms to explore various applications of digital assets and blockchain technology in addressing real-world challenges.

In a press release issued on Wednesday, Mastercard (MA) highlighted its extensive experience in building a global payments network based on cards, positioning itself to connect regulated money, bank deposits, stablecoins, and central bank digital currencies (CBDCs) with startups’ specific use cases. The program aims to innovate new solutions and improve efficiencies in digital commerce user experiences.

The Five Selected Startups 

1. Kulipa: A French-based company that facilitates crypto payment card issuance for digital wallets.
2. Parfin: A UK-based firm specializing in enterprise-grade software products to assist financial institutions in adopting blockchain rails.
3. Peaq: Headquartered in Singapore, peaq offers permissionless, borderless digital infrastructure for real-world applications.
4. Triangle: A U.S.-based startup focusing on sustainability through a data platform that integrates climate data with finance.
5. Venly: Based in Belgium, Venly simplifies blockchain integration for developers and businesses to support industry growth and digital transformation.

Mastercard’s Start Path program will offer selected blockchain, digital assets, and Web3 startups opportunities for collaboration, customized training, and access to Mastercard’s customer base and distribution channels throughout the virtual four-month program.

Since its inception in 2014, Mastercard (MA) has supported over 400 startups from 54 countries through the Start Path program.

Axel Cateland, the founder of Kulipa, expressed enthusiasm about the program, stating, “Through Mastercard Start Path, we’re looking to uncover new ways to unlock crypto mass adoption and wider financial inclusion with convenient, global stablecoin payments.”

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Circle (CIRC) recently submitted court documents to transfer its legal domicile to the United States from Ireland, as reported by a spokesperson for the company.

Circle (CIRC) initiated the relocation of its legal headquarters to the United States from Ireland. The company, which is the issuer of the second-largest stablecoin, announced its intention to go public in the United States back in January.

According to Bloomberg’s report on Wednesday, Circle (CIRC), the issuer of the USDC stablecoin, aims to establish the United States as its new legal base in anticipation of an upcoming initial public offering in the country. The spokesperson, mentioned in the report, refrained from providing detailed explanations for the move.

Circle (CIRC), which formally applied for a public listing with the U.S. Securities and Exchange Commission (SEC) earlier this year, is currently headquartered in the Republic of Ireland.

With a market capitalization of approximately $33 billion, Circle’s (CIRC) USDC holds the position of the second-largest stablecoin in the cryptocurrency market, as per CoinMarketCap’s data. Tether’s USDT, valued at $100 billion, occupies the top spot.

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As bitcoin prices soar, crypto wallet recovery services are experiencing a sharp increase in demand from retail investors desperate to regain access to their accounts. Cryptocurrencies, stored on decentralized blockchain ledgers, can be accessed through software or hardware wallets, bypassing traditional exchanges. This method, while reducing certain risks, also presents challenges such as forgotten passwords and lost access to two-factor authentication devices, which can lock investors out of their holdings.

The recent bitcoin rally, reaching a high of $73,803.25 in March, has intensified the fear of missing out (FOMO) among investors. According to Reuters, several investors who lost access to their wallets have successfully regained entry through recovery services, driven by the higher stakes involved as bitcoin prices hover around $60,000.

Companies like ReWallet in Germany and U.S.-based Wallet Recovery Services have reported significant increases in service requests, with some fees reaching 20% of the wallet’s value, payable only upon successful recovery. The urgency for access is underscored by an estimated 20% of all bitcoins being inactive, translating to about $237 billion in potentially lost assets.

As the crypto market continues to fluctuate, wallet recovery services are becoming crucial for investors locked out of their digital fortunes, highlighting the ongoing challenges and opportunities within the cryptocurrency security sector.

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Crypto markets showed minimal changes in the last 24 hours, with major cryptocurrencies like Bitcoin and Ether experiencing slight fluctuations, according to CoinGecko data. Bitcoin rose by just over 1%, while Ether dropped by 0.5%. Meanwhile, BNB from BNB Chain and Sol from Solana recorded a 3% decrease.

The crypto landscape saw significant activity among meme coins, which surged following a continued rally in GameStop’s (NYSE:GME) shares earlier in the week. Dog-themed Floki led the gains among major tokens, climbing 12%, while Pepe  reached a new all-time high with a 5% increase.

The meme coin rally was partly fueled by a social media post from Keith Gill, a notable retail trader who previously influenced a major short squeeze on GameStop’s stock in 2021. His recent post led to a surge in meme stocks and tokens, drawing on his @TheRoaringKitty persona.

Amid this, a joke GameStop token on the Solana blockchain reached a $100 million market capitalization, marking a 700% increase in just a week.

Despite these gains among meme tokens, the broader crypto market appears weak, with no significant support from the bullish trends in equities or the weakening dollar, as noted by Alex Kuptsikevich, a senior market analyst at FxPro.

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Coinbase, a prominent cryptocurrency exchange, is currently grappling with a system-wide outage, prompting concerns among users. The exchange has swiftly responded to the situation, assuring customers that their funds remain secure while its team diligently works on resolving the issue.

In a recent announcement, Coinbase acknowledged the outage and disclosed that its team is actively investigating the underlying cause. Despite the disruption, the exchange emphasized that users’ funds are safe, aiming to alleviate any potential concerns regarding the security of their assets.

As of now, accessing Coinbase’s website results in a “503 Service Temporarily Unavailable” alert, indicating the extent of the technical difficulties being faced by the platform.

This isn’t the first instance of technical challenges for Coinbase. In March, the exchange encountered similar issues, including disruptions to its trading platform during periods of heightened activity. Some users even reported inaccuracies in their account balances, further underscoring the importance of swift and transparent communication from the exchange during such incidents.

While system-wide outages can be disruptive, Coinbase’s proactive response and assurance regarding the safety of users’ funds reflect its commitment to maintaining trust and transparency within the cryptocurrency community. As the exchange works to resolve the current issue, users can expect updates from Coinbase regarding the restoration of services and any further developments.

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In a recent 13F filing with the Securities and Exchange Commission, the State of Wisconsin Investment Board disclosed substantial investments in various crypto entities, marking a significant foray into the digital asset space.

The Board revealed ownership of 2,450,400 shares of the iShares Bitcoin Trust (IBIT), a spot bitcoin exchange-traded fund managed by BlackRock, valued at approximately $99.2 million by the end of the first quarter of 2024. Additionally, the Board disclosed ownership of 1,013,000 shares of the Grayscale Bitcoin Trust (GBTC), valued at around $63.7 million.

Aside from bitcoin trusts, the Board’s crypto portfolio includes investments in leading cryptocurrency firms such as Coinbase, Marathon Digital, Riot Platforms, Block, Cipher Mining, Cleanspark, and MicroStrategy.

This significant move by the State of Wisconsin Investment Board underscores the growing institutional interest in digital assets. The Board, tasked with managing investments for public retirement and other trust funds in Wisconsin, has joined the ranks of institutional investors embracing cryptocurrencies as part of their diversified investment strategies.

BlackRock’s IBIT and Grayscale’s GBTC are prominent players in the spot bitcoin ETF market, commanding significant market share. The Board’s substantial investment in these ETFs reflects its confidence in the long-term potential of cryptocurrencies as an asset class.

Commentary from Bloomberg’s ETF analyst highlights the swift adoption of spot bitcoin ETFs by institutional investors. The Board’s quick entry into IBIT signals a departure from the usual timeline for institutional adoption, indicating growing confidence in the maturity and liquidity of crypto ETFs.

IBIT’s rapid growth and surpassing of previous ETF records underscore its significance in the evolving investment landscape. As institutional investors continue to explore opportunities in digital assets, the trajectory of spot bitcoin ETFs like IBIT will likely shape the future of crypto investment strategies.

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Galaxy Digital Holdings disclosed robust growth in revenue and profits for the first quarter, propelled by its mining operation’s exceptional performance amidst the cryptocurrency price surge.

The financial services firm focused on digital assets revealed that its net income surged to $421.7 million ($1.23 per share) in the quarter ending March, marking a remarkable 214% increase compared to the same period last year. This significant bottom-line growth was underpinned by a surge in revenue, which reached $259.7 million, up from $146.7 million year-on-year. These impressive results signal Galaxy’s recovery trajectory following a $1 billion net loss in 2022.

Breaking down the company’s business segments, Galaxy’s mining operation emerged as a key contributor, generating $31.5 million in revenue. This division’s robust performance was driven by a record hashrate of 5.7 exahash per second for mining transactions, demonstrating its resilience amidst market fluctuations. Notably, the mining operation’s revenue surge complemented similar increases recorded by Galaxy’s Global Markets and Asset Management divisions during the first quarter.

In April, Galaxy secured $125 million in funding, earmarked for expanding its trading operations and enhancing its mining infrastructure. This strategic move underscores Galaxy’s commitment to capitalizing on market opportunities and strengthening its position in the rapidly evolving digital assets landscape.

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Polymarket, a cryptocurrency-based prediction market platform, has successfully raised $45 million in a Series B funding round amid a surge in popularity leading up to the U.S. presidential election. The round was led by Peter Thiel’s Founders Fund, with notable contributions from Ethereum’s creator Vitalik Buterin, 1confirmation, ParaFi, and Dragonfly Capital, according to Polymarket founder Shayne Coplan, who communicated with CoinDesk via Telegram. The company’s valuation in this round was not disclosed.

This latest investment follows a previously undisclosed $25 million Series A funding round led by General Catalyst and includes a $4 million seed round from 2020, bringing Polymarket’s total raised funds to over $70 million. To support its next growth phase, Polymarket has appointed Richard Jaycobs as the head of market expansion, who previously held executive roles at traditional finance firms, including President of Cantor Exchange and CEO of The Clearing Corporation.

Polymarket is recognized as a leading platform for building prediction markets on cryptocurrency infrastructure. In these markets, participants place bets on the outcomes of real-world events within a specified timeframe, ranging from sports games to political events. For instance, a current market on Polymarket is gauging whether the U.S. Securities and Exchange Commission will approve a spot exchange-traded fund for Ethereum by May 31, with “Yes” shares trading at 16 cents, suggesting a 16% probability of approval.

These markets are touted not just as gambling venues but as tools for gaining a more accurate understanding of public sentiment and providing more reliable forecasts than traditional polls and punditry, a standpoint long advocated by economist Robin Hanson.

Despite a regulatory setback in 2022 that barred Polymarket from serving U.S. residents under a Commodity Futures Trading Commission settlement, the platform continues to see significant betting activity. This year alone, $202 million has been wagered on various events, with over $125 million staked on the presidential election. This exclusion from the U.S. market contrasts with Kalshi, the only CFTC-regulated prediction market, which faces potential regulatory challenges from the CFTC’s recent proposals to ban election-related bets, a rule that would not affect Polymarket.

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