Category: Cryptocurrency

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Ether has demonstrated strong performance against Bitcoin for two consecutive weeks, indicating a growing interest in altcoin gains following recent market developments, according to analysts at Bitfinex. Despite bitcoin’s halving event, ether recorded a notable 7.5% increase in its trading pair with BTC, marking its most significant weekly gain against bitcoin since early January.

Bitfinex’s Alpha report underscored ether’s resilience, even amidst regulatory challenges. Concerns regarding the potential SEC classification of ether as security and scrutiny over the Metamask software have raised uncertainties in the market. Nevertheless, ether’s ability to outpace bitcoin suggests a shifting sentiment among investors and market dynamics within the altcoin space.

The decline in bitcoin dominance further supports this narrative, with attention gradually shifting towards altcoins following the halving event. Historically, such events have prompted a surge in altcoin activity, leading to a decline in Bitcoin’s dominance. Currently, bitcoin’s dominance stands at 50.5%, while ether commands a dominance of 15.9%, according to Coingecko data.

Meanwhile, early Monday trading saw a significant depreciation in the Japanese yen, prompting bitcoin to trade at a slight premium against the weakening currency. On the Japanese crypto exchange bitFlyer, the bitcoin-Japanese yen pair traded at a 0.2% premium to bitcoin’s dollar-denominated price on Coinbase. However, as the yen rebounded amidst speculation of intervention by the Bank of Japan, the BTC/JPY pair retreated to trade at 9,797,502 JPY at the time of reporting.

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A recent griefing attack on the Bitcoin testnet has caused significant disruption, leading to the generation of three years’ worth of blocks in just one week. Griefing attacks involve intentionally spamming transactions on a network, increasing its workload, and disrupting its normal operations. Jameson Lopp, co-founder and Chief Security Officer of Casa, publicly claimed responsibility for the attack, generating over 165,000 blocks within the past week.

Lopp explained that the purpose of the attack was to advocate for a reset of Bitcoin’s test network, ensuring that testnet coins have no value and developers can test their software without incurring costs. He also highlighted a bug in the testnet’s consensus code that allows for the creation of massive block amounts in a short time, urging developers to address this vulnerability.

Hashrate and difficulty data on the Bitcoin network testnet indicated a spike to 2,315 TH/s on April 19 before returning to 346 TH/s on April 28. The attack caused interruptions in node syncing, making it impossible to reach the tip due to the high volume of new blocks.

Leo Weese, technical content lead at Lightning Labs, observed the disruption, expressing concerns about the future of permission-less testing networks. While the Bitcoin testnet didn’t suffer significant harm, it did disrupt the testing efforts of open-source Bitcoin application builders.

Despite Lopp’s characterization of the incident as a “free stress test,” it faced backlash from the crypto community. Francis Pouliot, co-founder of Bull Bitcoin, emphasized the impact on legitimate testing efforts, highlighting the wasted time and resources of developers.

While the Bitcoin testnet withstood the attack, the incident underscores the challenges of maintaining open and accessible testing environments in the crypto space amidst malicious activities.

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Trust Wallet has made a swift return to the Google Play Store after experiencing a temporary removal on Monday morning, causing concern among Android users relying on the crypto wallet service.

The company addressed the issue via its official channels, acknowledging Google’s decision to temporarily remove the app from the Play Store. Despite submitting an appeal weeks prior, Trust Wallet was taken down while awaiting a response from Google.

During the removal period, Trust Wallet advised Android users to download an Android Package Kit (APK) from its website to access the wallet service. However, the company reassured existing Android users that their funds remained secure and unaffected by the app’s removal.

Furthermore, Trust Wallet highlighted that users who had uninstalled the app would need to wait for Google to relist it before being able to download it again. While the iOS version and Google Chrome Browser Extension of Trust Wallet remained unaffected, the company expressed concerns about potential scams involving fraudulent applications impersonating the legitimate wallet service.

Fortunately, Trust Wallet’s hiatus from the Google Play Store was short-lived, with the company announcing its swift return by 7:30 a.m. EST. The Android version of the app was restored on the Play Store, much to the relief of users and the Trust Wallet team alike.

In the wake of Trust Wallet’s brief removal, the native coin of the wallet service, Trust Wallet Token (TWT), experienced a 5.2% decline in value as of Monday morning.

The incident with Trust Wallet’s removal raised concerns among users, especially in light of increased regulatory scrutiny in the U.S. surrounding self-custody crypto wallets. Notably, Wasabi Wallets recently announced a ban on U.S.-based users due to regulatory uncertainties, following money laundering charges against the founders of another self-custody wallet service, Samourai Wallet.

As regulatory pressures mount, the status of self-custody crypto wallets like Trust Wallet remains uncertain, with potential implications for their classification and regulatory oversight in the future.

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Tether, the prominent issuer of stablecoin USDT, announced on Monday a significant investment of $200 million to acquire a majority stake in Blackrock Neurotech, a pioneering brain-computer interface company. Through its venture capital arm, Tether Evo, the company aims to support the development and commercialization of Blackrock Neurotech’s groundbreaking medical devices.

Blackrock Neurotech specializes in the creation of medical devices driven by brain signals, with a focus on assisting individuals affected by paralysis and neurological disorders. It’s worth noting that the technology firm is distinct from the asset management giant BlackRock.

The infusion of capital from Tether will facilitate the deployment and market entry of these innovative medical devices. Additionally, funds will be allocated towards ongoing research and development initiatives to further enhance the company’s offerings, as highlighted in the press release.

With a market capitalization of $110 billion, Tether stands as a leader in the stablecoin market. In recent times, the company has diversified its interests by establishing four divisions beyond stablecoin issuance.

Paolo Ardoino, CEO of Tether, expressed the company’s commitment to fostering emerging technologies with transformative potential. He emphasized the belief in the revolutionary capabilities of Blackrock Neurotech’s Brain-Computer Interfaces, which can revolutionize communication, rehabilitation, and cognitive enhancement.

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Cryptocurrency exchange Binance finds itself entangled in a fresh legal battle as a new class-action lawsuit unfolds in Canada. Plaintiffs allege that Binance has run afoul of local securities regulations.

The Ontario Superior Court of Justice has initiated a certification motion for a class-action lawsuit against Binance. The core accusation revolves around the sale of crypto derivative products to retail investors without proper registration, according to the plaintiffs.

The lawsuit is seeking damages and the rescission of illicit derivative trades. Plaintiffs argue that tens of thousands of Canadian users engaged in Binance’s cryptocurrency derivatives offerings through its platform.

Further complicating matters, the Philippines Securities and Exchange Commission (SEC) has directed both Google and Apple to remove the Binance app from their respective app stores for users in the Philippines.

Emilio Aquino, chair of the SEC, emphasized that selling or offering unregistered securities to locals and operating as an unregistered broker breaches the country’s securities regulations. Removing Binance’s applications from digital app marketplaces, according to Aquino, is crucial to curb the proliferation of its illicit activities in the Philippines, which could otherwise have detrimental effects on the local economy.

Meanwhile, in the United States, prosecutors have recommended a 36-month prison sentence for Binance founder Changpeng “CZ” Zhao. This recommendation comes after Zhao pleaded guilty to charges related to money laundering.

In their filing to the U.S. District Court for the Western District of Washington, prosecutors underscored the gravity of Zhao’s deliberate violation of U.S. law and its repercussions. They argue that the proposed 36-month sentence, coupled with a $50 million fine, strikes an appropriate balance in addressing the pertinent legal factors and achieving the objectives of sentencing.

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Michael Saylor’s bold move to embrace Bitcoin in 2020 has yielded substantial gains for the co-founder and executive chairman of MicroStrategy Inc (NASDAQ:MSTR). Saylor has reportedly earned around $400 million from pre-planned daily sales of approximately 5,000 shares of MicroStrategy since January, fueled by the stock’s remarkable surge.

The stock, which has doubled this year to approximately $1,280, has outpaced the gains of Bitcoin, the cryptocurrency Saylor embraced. MicroStrategy’s stock performance appears to allay investor concerns regarding Saylor’s selling activity, given his controlling stake in the company.

Despite questions about MicroStrategy’s premium over Bitcoin, particularly after the introduction of US exchange-traded funds for the cryptocurrency, investor sentiment remains positive. However, some skeptics, like Kerrisdale Capital Management LLC, have taken short positions, citing the stock’s outpacing of Bitcoin’s price surge.

The anticipation now shifts to MicroStrategy’s first-quarter results, expected after regular trading hours on Monday. Analysts project flat revenue of around $122 million, with a forecasted net loss of 61 cents per share. MicroStrategy’s Bitcoin holdings, currently valued at approximately $14 billion, have been a key factor driving its investment strategy.

Investor focus also centers on MicroStrategy’s adoption of an accounting rule to value Bitcoin at market prices, with a deadline set for 2025. Despite past impairment charges, MicroStrategy continues to expand its Bitcoin holdings, having already spent over $1 billion on the cryptocurrency in the first quarter of 2024.

“Saylor has a simple strategy for MSTR: sell equity/debt and buy BTC with proceeds,” noted Jeff Dorman, chief investment officer at Arca, highlighting MicroStrategy’s ongoing commitment to its Bitcoin-centric investment approach.

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This week witnessed a notable shift in the momentum of two of the most successful exchange-traded fund launches in history. BlackRock’s (NYSE:BLK)spot Bitcoin ETF, IBIT, renowned for its remarkable performance, experienced zero inflows on Wednesday and Thursday, marking the end of its 71-day streak of fresh investments totaling approximately $17.24 billion in assets under management since its trading approval on January 11. Additionally, Fidelity’s FBTC, the current runner-up in the ETF race, reported losses of $22.6 million on Thursday, marking its first reported outflow and reducing its assets under management to around $9.9 billion, according to CoinGlass data.

The waning interest in the leading Bitcoin ETFs, excluding Grayscale’s GBTC, serves as a significant indicator of the cryptocurrency market’s recent cooling and suggests that the initial ETF frenzy, which propelled Bitcoin to new heights, has subsided. With Bitcoin currently trading around $63,500, down approximately 12% from its all-time high of $73,000 in March, only one of the 10 trading spot Bitcoin ETFs, Franklin Templeton’s EZBC, reported inflows on Thursday.

Disappointing inflation data has tempered hopes for Federal Reserve interest rate cuts, and the prospect of higher borrowing costs typically diminishes the market’s appetite for riskier, more volatile investments like crypto. Meanwhile, Bitcoin has remained relatively stagnant since early March, partly reflecting ETF stagnation and the anticipation surrounding the network’s recent “halving” event on April 19, as investors adhered to the “buy the rumor, sell the news” strategy, liquidating their holdings.

Nate Geraci, president of the ETF Store, noted that ETF flows often mirror the performance of the underlying asset, suggesting that a pause in Bitcoin’s price may lead to a temporary hiatus in inflows. However, Geraci emphasized that these products are still in the early stages of adoption, with many large institutions yet to permit their brokers to solicit purchases of spot Bitcoin ETFs, and registered investment advisors cautiously entering the category.

Despite the recent slowdown, these funds are widely regarded as a resounding success, accumulating over $54 billion in assets in just over three months of trading, thereby integrating Bitcoin-tracked assets into the portfolios of millions of mainstream investors.

Highlighting their success, Hong Kong’s Securities and Futures Commission recently granted approvals for three spot Bitcoin and Ether ETFs, set to commence trading on Tuesday, with additional countries expected to follow suit. Issuer Harvest is waiving a management fee for its funds, sparking expectations of a fee war akin to the heated competition in the U.S., where Grayscale introduced a Bitcoin Mini Trust with ultra-low fees of 0.15% in an effort to capture some of the outflows from GBTC, which charges 1.5%.

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Total net outflows from 11 U.S. spot bitcoin ETFs reached $120 million on Wednesday, with eight products recording zero flows, a trend deemed normal by analysts.

Grayscale’s GBTC witnessed $130.42 million exiting the converted bitcoin ETF, while Fidelity and Ark Invest’s funds were the sole recipients of inflows, totaling approximately $10 million. Among the eight funds with zero flows were BlackRock’s IBIT and Bitwise’s BITB, with IBIT ending its 71-day positive streak on Wednesday.

According to Rachael Lucas, a crypto analyst at BTC Markets, days with zero inflows are typical and do not necessarily indicate product failure. She suggests that such occurrences often align with market performance and geopolitical tensions, underscoring the complexities beyond ETF flows.

Joe Caselin, head of institutional marketing at BIT crypto exchange, echoes this sentiment, stating that zero flows in an ETF are not unusual but may signify a cooling down of ETF excitement. He emphasizes the gradual integration of fiat into the Bitcoin narrative, anticipating fresh inflows to occur intermittently as traditional finance gradually merges with crypto.

Bloomberg ETF Analyst James Seyffart previously explained that ETF shares are created or destroyed in units, a process triggered by significant disparities in supply and demand. This phenomenon explains why zero flows are commonly observed in such products.

The Block ETF data dashboard reports that the cumulative trading volume for all 11 spot Bitcoin ETFs is approaching $230 billion.

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A recent report from Fidelity Digital Assets highlights a substantial increase in the number of Bitcoin addresses holding at least $1,000 worth of Bitcoin (BTC). Fidelity’s analysts reveal that this segment soared to an unprecedented 10.6 million wallets in mid-March, marking a doubling from the 5.3 million addresses recorded in 2023.

The surge in Bitcoin addresses with smaller holdings suggests a widening distribution of the cryptocurrency and its growing adoption among the general populace, according to Fidelity’s analysts. Despite escalating prices, the data indicates that small addresses persistently accumulate and store Bitcoin, a trend Fidelity describes as positive growth.

Fidelity’s analysts offer an optimistic outlook for Bitcoin in the short term, based on various long-term data points. Out of the 16 metrics tracked, half were deemed positive, while a quarter were categorized as negative or neutral.

The report also delves into the amount of Bitcoin held on cryptocurrency exchanges, which continued its downward trajectory in the first quarter of 2024. The total amount plummeted by 4.2% to 2.3 million Bitcoin, approximately 30% lower than the peak of over 3 million Bitcoin held in 2020. However, Fidelity underscores that this decline in exchange-held Bitcoin does not necessarily imply an uptick in self-custody. Custodians like Fidelity are actively developing solutions that empower customers to retain control of their private keys while engaging in trading activities through exchanges.

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For 71 consecutive days, BlackRock Inc.’s Bitcoin fund experienced an impressive streak, accumulating nearly $18 billion in one of the most significant exchange-traded fund launches in history. However, investor interest has waned as the fervor surrounding cryptocurrencies subsided.

Data compiled by Bloomberg reveals that daily inflows into the ETF, identified by the ticker IBIT, dwindled to virtually zero on Wednesday. Throughout April, IBIT has garnered a net inflow of $1.5 billion.

IBIT’s achievement marks a notable shift in the crypto market sentiment, following the ETF-induced excitement that propelled Bitcoin to an all-time high of nearly $74,000 in March. Since then, the original cryptocurrency has declined by nearly 15%, and the much-anticipated “halving” event on April 20 failed to deliver an immediate boost.

Nevertheless, these new investment vehicles have left a significant mark on the crypto landscape. Collectively, they have attracted approximately $54 billion, introducing Bitcoin into the portfolios of potentially millions of investors. Hong Kong, positioning itself as a crypto-friendly jurisdiction, is preparing to debut its first listings of Bitcoin and Ether ETFs, with other markets likely to follow suit.

Despite the halt in net inflows, IBIT is swiftly closing the gap on Grayscale Bitcoin Trust, the current market leader. On Wednesday alone, approximately $130 million flowed out of GBTC, bringing total outflows for the year to $17 billion, according to Bloomberg data.

GBTC, identified by the ticker GBTC, imposes a management fee of 1.5%, the highest among the cohort of funds launched in early January. The launch of ETFs in Hong Kong may intensify the fee competition that has exerted pressure on GBTC.

Rebecca Sin, an ETF analyst at Bloomberg Intelligence, suggested that the launch of spot Bitcoin ETFs in Hong Kong, coupled with issuers waiving management fees, might lead to additional outflows, potentially indicating further changes in market dynamics.

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