Category: Cryptocurrency

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Deribit, a leading cryptocurrency derivatives exchange, is poised to witness historically high levels of bitcoin options open interest expiring this Friday. The surge in open interest, totaling over $9.5 billion, reflects increased liquidity and participation in the market.

According to analysts at Deribit, this end-of-month expiry represents one of the largest in the exchange’s history, accounting for approximately 40% of the total open interest. Comparatively, previous end-of-month expiries in January and February stood at significantly lower levels, around $3.74 billion and $3.72 billion, respectively.

A notable aspect of this expiry is the considerable portion of options set to expire in the money, amounting to $3.9 billion based on a current spot price of around $70,000. This suggests that a substantial number of options contracts hold value at current market prices, potentially leading to increased buying activity as traders seek to hedge or capitalize on further price movements.

Deribit analysts anticipate heightened volatility or upward pressure on bitcoin prices as option holders exercise their profitable contracts. The recent price rally in Bitcoin has contributed to this situation, resulting in higher levels of in-the-money expiries compared to typical scenarios.

Luuk Strijers, Chief Commercial Officer at Deribit, emphasized the bullish sentiment prevailing in the cryptocurrency market, particularly evident in derivatives data. Strijers highlighted the basis yield achievable by buying spot and selling longer-dated futures, indicating strong demand in the market.

Moreover, Strijers noted a significant increase in Bitcoin notional open interest in contracts valued at $100,000 and higher on Deribit. He also pointed out a shift in the put-call ratio for ether options, indicating evolving market sentiment towards short-term and long-term expiries.

Overall, the heightened levels of bitcoin options open interest on Deribit reflect the growing maturity and sophistication of the cryptocurrency derivatives market, underpinned by bullish market sentiment and evolving trader strategies.

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GSR, a crypto market maker, has revised its estimate of the likelihood of a spot Ether ETF approval in May to 20%. This represents a significant decrease from its earlier estimate in January, where it had placed the chances at 75%.

According to Brian Rudick, an analyst at GSR, the change in estimation is influenced by several factors. Rudick highlighted the lack of engagement from the SEC, potential political pressure against approving digital asset ETFs, and an ongoing investigation into whether Ether qualifies as a security. These factors collectively diminish the odds of approval.

Rudick also speculated that the approval process for spot Ether ETFs might extend well into 2025 or 2026, potentially involving litigation due to the complexities surrounding the regulatory environment.

In a notable shift, Rudick mentioned that some ETF applications have been amended to include Ether staking. While this could enhance the attractiveness of such ETFs, it also introduces additional complexities to the approval process. Rudick suggested that this move might either provoke a response from the SEC or indicate a concession to a delayed approval, potentially lowering the odds for May.

Similarly, Bloomberg ETF analysts have also adjusted their estimates, now placing the likelihood of a spot Ether ETF approval in May at 30%. This contrasts with their earlier projections, which were more optimistic, indicating a challenging regulatory landscape for Ether ETFs.

James Seyffart, a Bloomberg analyst, expressed growing pessimism, noting a lack of progress in the approval process as the deadline approaches. With little movement observed, optimism surrounding the approval of Ether ETFs seems to be waning.

Overall, both GSR and Bloomberg analysts paint a cautious picture regarding the prospects of a spot Ether ETF approval in May, highlighting regulatory uncertainties and the potential for prolonged approval processes.

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Bitcoin’s ascent faces a shaky $70,000 resistance, but data from the blockchain suggests participants are gearing up for a sustained rally. Recently, Bitcoin surged above $71,000, marking its highest point since March 15, propelled by capital inflows into spot BTC exchange-traded funds (ETFs).

On March 26, Bitcoin saw a 0.55% increase over 24 hours, reaching a weekly peak at $71,582. Factors driving this surge include consistent inflows into spot Bitcoin ETFs, the anticipation surrounding the upcoming Bitcoin halving, and positive sentiment among institutional investors.

Key to Bitcoin’s rally is the accumulation by large investors. Data from Sentiment reveals a rise in wallets holding between 1,000 BTC and 10,000 BTC, reaching 25.17% from 23% at the beginning of the year. Similarly, wallets holding between 10,000 BTC and 100,000 BTC saw a spike from 11.68% to 12.42% before settling at 11.98%.

This accumulation is reinforced by decreasing BTC deposits on exchanges, signaling reduced intent to sell. Instead, there’s been a surge in whale transfers from exchanges to self-custody wallets. Notably, one holder moved 2,400 BTC ($169.5 million) from Coinbase to an undisclosed wallet, while another withdrew 4,797 BTC ($339 million) to an unknown destination.

Anticipation surrounding the upcoming halving event is also bolstering Bitcoin’s price. Glassnode predicts that ETF buying power will overshadow the traditional supply squeeze expected from the halving, set for April. Analysts emphasize monitoring the activity of long-term holders (LTHs), whose decisions can significantly impact market liquidity and sentiment.

With the halving approaching, traders are eyeing Bitcoin’s next price level. Despite facing resistance, data from IntoTheBlock indicates strong support around $64,000, suggesting momentum for Bitcoin’s ascent back to the $70,000 range.

Traders are now focused on maintaining Bitcoin above $70,000, with $100,000 emerging as a key target for the price.

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The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced sanctions on 13 entities and two individuals involved in the financial services and technology sectors of the Russian economy. These entities, including those dealing with virtual assets, are accused of aiding Russian entities in evading US sanctions.

According to the Treasury Department, these designations come after reports of entities facilitating transactions or offering services that helped sanctioned Russian entities evade sanctions. The move follows previous actions by OFAC targeting companies servicing Russia’s financial infrastructure and restricting its access to the global financial system amid the conflict with Ukraine.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson stated that Treasury will continue to expose and disrupt companies aiding sanctioned Russian financial institutions in reconnecting to the global financial system.

Among the sanctioned firms are Moscow-based fintech companies like B-Crypto, Masterchain, Laitkhaus, and Atomaiz, which allegedly collaborated with OFAC-designated Russian banks to facilitate cross-border settlements and issue digital financial assets. Cyprus-based Tokentrust Holdings Ltd., the majority shareholder of Atomaiz, was also designated.

Other entities targeted include technology companies like Veb3 Tekhnologii and Veb3 Integrator, providing blockchain solutions to clients such as Sberbank and Alfa-Bank. Bitpapa, a peer-to-peer virtual currency exchange, and Crypto Explorer, a virtual currency exchange operating in Russia and UAE, were also sanctioned.

In addition to crypto-related sanctions, OFAC-designated companies associated with the OFAC-designated Echelon Union for Science and Technology, a Moscow-based entity licensed by Russian authorities.

As a result of these sanctions, all property and interests in property of the designated persons within US jurisdiction are blocked and must be reported to OFAC. Foreign financial institutions dealing with Russia’s military-industrial base risk facing sanctions as well.

These sanctions aim to disrupt Russia’s ability to use alternative payment mechanisms and financial technology entities to evade US sanctions and continue funding its conflict with Ukraine. The Treasury vows to monitor and respond to Russia’s evolving sanctions evasion tactics while upholding the integrity of the international financial system.

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Analysts anticipate significant growth for Bitcoin exchange-traded funds (ETFs) in Hong Kong, driven by the adoption of the in-kind creation model, which gives them a notable advantage over their US counterparts.

Eric Balchunas, a senior ETF analyst at Bloomberg, highlights Hong Kong’s adoption of the in-kind creation model as a potential catalyst for boosting assets under management (AUM) and trading volume for ETF products in the region. This view is supported by research from Bloomberg ETF analyst Rebecca Sin, who sees the in-kind model as an “opportunity for the market.”

Sin elaborates on the difference between the US and Hong Kong approaches, noting that while the US relies on cash transactions for Bitcoin ETF creation (cash in, Bitcoin ETF out), Hong Kong aims for Bitcoin-based creation (Bitcoin in, ETF out), presenting a unique opportunity for the market.

Earlier this year, Hong Kong authorities signaled their readiness to accept applications for spot crypto ETFs, with plans to introduce these financial products by mid-year. Several entities, including Harvest Hong Kong, have since filed applications to launch spot Bitcoin ETFs.

The in-kind creation model favored by Hong Kong contrasts sharply with the cash-creation model favored by US authorities. With in-kind redemptions, ETF issuers can exchange the fund’s underlying assets, such as Bitcoin, with market makers instead of transacting in cash during share creation and redemption. This mechanism allows ETFs to issue creation units without immediately selling the securities for cash.

In contrast, the cash redemptions required by the US SEC mandate fund managers to sell Bitcoin to provide cash for redeeming shareholders. Notably, BlackRock, one of the Bitcoin ETF issuers, has raised concerns about this method, citing challenges in maintaining share prices aligned with Bitcoin’s actual value.

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South American gold and precious metals producer Nilam Resources (NILA) is venturing into the world of cryptocurrency by announcing its intention to acquire 100% of the common stock of a special purpose entity holding 24,800 Bitcoin (BTC). This move comes as the exploration-stage mining company signed a letter of intent with Xyberdata Ltd.

The special purpose entity, to be named MindWave, will be established for this purpose. Nilam Resources plans to issue a newly authorized Preferred Class of Series C Stock in exchange for the Bitcoins, which will be offered at a discounted rate compared to current market prices.

With full control over MindWave’s capital stock, Nilam Resources aims to use the 24,800 Bitcoins, along with other assets, as collateral to raise capital for investment in high-yield generating projects.

Under the agreement, shareholders of MindWave will exchange their equity interest for the newly issued Preferred Shares of Class C stock authorized and issued by NILA.

The newly created Class C Preferred Stock is expected to offer conversion rights upon listing on NASDAQ, another national exchange, or other defined liquidity events. These shares will be issued pro rata to the shareholders and will be considered ‘restricted securities’ as per Rule 144 under the Securities Act of 1933.

Pranjali More, CEO of Nilam Resources, affirmed that the company and its team have been diligently working over the past few months to complete all agreements and due diligence required to advance towards a legally binding Letter of Intent.

Following this acquisition, Nilam Resources’ assets will surpass one billion dollars.

In a press release, the company emphasized that this move aligns with its vision, mission, and core values, aiming for an inclusive and sustainable financial future while driving positive change in the digital economy.

Pranjali More, COO of Nilam Resources, highlighted the company’s commitment to transparency, innovation, and sustainability, prioritizing clear communication and investing in projects with enduring social and environmental impact.

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Worldcoin, the project known for its “proof of personhood” concept where individuals receive cryptocurrency tokens after having their irises scanned to verify their humanity, has faced a setback in Europe. A regulator in Portugal has directed the project to halt its biometric data collection efforts.

According to a report from Reuters, the Portugal data regulator, CNPD, has instructed Worldcoin to suspend its collection of personal data for 90 days. This directive follows a similar ban imposed on the project in Spain last month. The CNPD cited a high risk to citizens’ data protection rights as the rationale for urgent intervention to prevent potential harm. The report notes that over 300,000 individuals in Portugal have provided their biometric data to Worldcoin.

In response to the regulatory action, Tools for Humanity, the lead software contributor to the Worldcoin project, emphasized that the initiative adheres to all relevant laws and regulations governing the collection and transfer of biometric data. Jannick Preiwisch, the data protection officer at Worldcoin Foundation, reiterated the project’s commitment to complying with data protection authorities and expressed willingness to address any reported concerns, including those related to underage sign-ups in Portugal.

In an attempt to address privacy concerns and enhance user control over personal data, Worldcoin recently introduced “Personal Custody,” a new process that eliminates the storage and encryption of individuals’ biometric data. Previously, users had the option to allow Worldcoin to store their data. Tiago Sada, an executive at Tools for Humanity, highlighted that the updated approach grants users greater autonomy over their data, offering reassurance by reducing the need to place trust in external entities.

Worldcoin’s unique model rewards individuals with cryptocurrency tokens, known as WLD tokens, upon undergoing iris scanning to establish a World ID. According to the project’s website, Worldcoin has garnered participation from over 4.5 million individuals across 120 countries.

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The Technology Working Group of the UK Treasury, the economic and finance ministry of the government, has recently released a comprehensive report delving into the potential use cases of fund tokenization.

The report primarily investigates the utilization of tokens as collateral for money market funds and examines the role of tokenized funds within the on-chain investment market. It outlines how the UK funds industry can leverage the potential of tokenization to enhance asset management operations and proposes a foundational tokenization model for firms operating within the UK.

Moreover, the report elucidates various use cases demonstrating how this model could improve business operations, including optimizing money market fund collateral management. This marks the second report from the Technology Working Group, established in April 2023 under the Asset Management Taskforce. The forthcoming third report is slated to focus on the impact of artificial intelligence on the industry.

This recent publication builds upon the findings of the Technology Working Group’s inaugural report released in November 2023. The latest report expands on the potential use cases of fund tokenization identified in the initial publication.

Tokenization, as defined in the report, involves issuing units recorded on a distributed ledger, contrasting with units recorded on traditional record-keeping systems. The transition of existing operational infrastructure supporting investment funds onto a distributed ledger is posited to drive efficiency and transparency within the sector while enhancing its competitive edge.

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According to analysts at Bernstein, BlackRock’s upcoming tokenized fund launch is poised to bring significant legitimacy to public smart contract chains, particularly Ethereum. The announcement of BlackRock’s BUIDL tokenized private equity fund earlier this month marks a significant move into digital assets by the world’s largest asset manager, following the launch of a spot bitcoin ETF.

The analysts at Bernstein suggest that BlackRock’s decision to utilize the public Ethereum blockchain instead of private chains, such as JPMorgan’s Onyx, expands interoperability and programmability within the space. This move is seen as a departure from the perception of public chains solely as “retail casinos.”

The analysts further elaborate that tokenized fund redemption could be facilitated on-chain with the integration of stablecoins like USDC. Additionally, the introduction of new asset classes such as bonds, equities, and foreign exchange stablecoins could lead to increased interoperability between asset classes on-chain, allowing for further programmability based on deal contract conditions. This development is seen as a significant step in utilizing blockchain technology for institutional utility rather than just retail speculation.

BlackRock’s tokenized fund, named the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), was revealed in a U.S. Securities and Exchange Commission filing. The fund will invest in U.S. Treasury bills, repurchase agreements, and cash, although a specific launch date was not provided. Securitize will act as the tokenization platform, with ecosystem partners such as Anchorage, Coinbase, BitGo, Fireblocks, and BNY Mellon facilitating custody, settlement, and interoperability with traditional markets.

Bernstein’s analysts argue that BlackRock’s collaboration with partners from both traditional and crypto worlds will encourage more traditional institutional customers to adopt on-chain funds, resulting in reduced friction. This move is expected to provide institutional holders with benefits such as 24/7 instant settlement, increased transparency, improved capital efficiency, and reduced operating costs.

Furthermore, Bernstein suggests that tokenized funds could become a new growth category for asset managers, evolving from simple investment via ETFs to building on-chain products as a commercial revenue and cost-saving opportunity.

The analysts conclude that tokenization represents the next evolution of financial markets, akin to the ETF wave of the last two decades. They have also raised their year-end bitcoin price target to $90,000, anticipating a “mild” halving impact on miners.

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MicroStrategy’s (NASDAQ:MSTR) stock reached an all-time high on Tuesday, surging past $1,860 and peaking at $1,909, as reported by Yahoo Finance.

This milestone was achieved following MicroStrategy’s recent acquisition of an additional 9,245 bitcoins on March 19, which brought its total holdings to approximately 214,250 BTC. With this acquisition, the company now controls 1% of Bitcoin’s total supply.

The business intelligence company, now recognized for its substantial bitcoin holdings, saw its stock price soar to $1,909 before settling at $1,863 as of 12:35 p.m. ET, reflecting a 0.49% increase over the past 24 hours. MicroStrategy’s intraday market capitalization stands at $31.67 billion.

The surge in MicroStrategy’s stock price is closely linked to its significant investment in Bitcoin, which has been attracting attention from investors. The company’s decision to increase its bitcoin holdings further solidifies its position as a major player in the cryptocurrency market.

Bitcoin’s price, on the other hand, experienced fluctuations, reaching $69,522.56 at 12:47 p.m. ET on March 26, with a slight decrease of 0.82% over the past 24 hours. Earlier in the day, bitcoin’s price surpassed $71,000, leading to $193 million in liquidations within the same period.

MicroStrategy’s record-breaking stock performance underscores the growing influence of cryptocurrency investments on traditional financial markets, as companies like MicroStrategy continue to allocate significant resources to digital assets like Bitcoin.

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