Category: Cryptocurrency

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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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Tether, the entity responsible for the world’s largest stablecoin USDT, has disclosed its strategic foray into the domain of artificial intelligence, as per the company’s announcement on March 26. With a market capitalization reaching $104 billion, Tether is aiming to spearhead the development of open-source, multimodal AI models and integrate AI solutions into market-driven offerings.

This initiative emerges amidst mounting apprehensions regarding the monopolization of AI technologies by tech giants such as Microsoft, Facebook, and Google. Tether Data, a newly established subsidiary of Tether, is positioning itself as an advocate for transparency and privacy in AI model development. The company is delineating its focus into three primary domains: advancing open-source AI models, fostering collaborations for AI integration into various products, and engaging with the broader ecosystem through community participation.

Tether Data’s expansion into the realm of AI signifies a significant stride for the company, which has a track record of strategic investments across diverse sectors including renewable peer-to-peer telecommunications, energy, and bitcoin mining.

Paolo Ardoino, CEO of Tether, remarked in the announcement, “Artificial intelligence stands poised to revolutionize nearly every facet of our lives, both in the real and digital worlds. Today’s announcement establishes a new division within Tether, redefining AI boundaries and democratizing privacy-preserving open AI technology while setting industry benchmarks for innovation, utility, and transparency.”

As part of its AI venture, Tether Data has initiated a global recruitment campaign to attract top-tier talent to its burgeoning AI division. The company is extending invitations to proficient individuals passionate about AI to explore career opportunities through its dedicated careers page.

The implications of Tether’s entry into the AI arena are profound for the cryptocurrency industry. As a frontrunner in this space, Tether’s emphasis on open-source, transparent, and privacy-preserving AI models could establish new paradigms for the development and deployment of AI technologies. Furthermore, the integration of AI solutions into market-driven products may foster innovation and enhance efficiency within the digital assets market.

While AI continues its rapid advancement, concerns surrounding bias, accountability, and ethical usage remain prevalent. Tether Data’s commitment to open-source solutions could serve to address these concerns as it progresses with the development and integration of AI models into various products. Elon Musk’s recent legal action against Open AI over its closed-sourced models, followed by his subsequent open-sourcing of the ‘Grok’ model, underscores the significance of open-source initiatives in the AI landscape. Tether’s entry into this arena could further amplify the momentum of open-source endeavors, particularly given its considerable resources.

In summary, Tether’s strategic foray into AI signifies a notable evolution in its business trajectory as it seeks to consolidate its position within the burgeoning tech landscape. The burgeoning decentralized AI space in the crypto sector has experienced substantial growth in recent months, with the market cap surpassing the $25 billion mark in March.

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An examination of the interplay between Bitcoin cohort accumulation and monthly issuance sheds light on the current market dynamics. Presently, the ongoing epoch witnesses a daily mining output of approximately 900 BTC, totaling nearly 27,000 BTC per month, depicted by the blue line in our analysis graph.

Cohorts within the Bitcoin ecosystem range from smallholders (with less than one Bitcoin) to large entities holding 10,000 or more BTC, including miners and exchanges. Notably, the analysis becomes intriguing when the orange bar chart, representing the aggregate accumulation of cohorts, surpasses the blue line denoting monthly issuance.

When the orange bar chart exceeds the monthly issuance line, it signifies that all cohorts combined are accumulating more Bitcoin than the total monthly issuance. Conversely, a scenario where the orange bar chart falls below the monthly issuance line indicates that cohorts are not accumulating the entire monthly issuance on an aggregate basis.

Breaking down the recent data as of March 25, the monthly issuance stands at 27,000 BTC, while the aggregate cohort accumulation has reached 43,114 BTC. This data indicates that over the past 30 days, all cohorts collectively absorbed the newly mined Bitcoin and acquired additional quantities from exchanges. This upward trend in buying activity aligns with the recent surge in Bitcoin prices, surpassing the $70,000 mark.

Conversely, a contrasting period was observed between March 3 and March 22, during which cohorts accumulated less Bitcoin than the monthly issuance. This trend contributed to the dip in Bitcoin prices from its all-time high of $60,000.

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Nadeem Anjarwalla, a Binance executive detained by Nigerian authorities, has reportedly escaped custody, confirmed by Binance to CryptoSlate. Meanwhile, Tigran Gambaryan, another detained Binance executive and US citizen, remains in custody.

A representative from Binance confirmed that Nadeem is no longer held in Nigerian custody. The company’s foremost concern remains the safety of its employees, and efforts are underway in cooperation with Nigerian authorities to swiftly address this matter.

The Nigerian authorities have levied tax evasion charges and complicity in tax fraud against Binance Holdings and the detained executives, with the case pending trial at the Federal High Court.

Anjarwalla, a dual citizen of Kenya and the UK, reportedly absconded on March 22 during Friday prayers at a mosque in Abuja. He purportedly used a Kenyan passport to board a flight operated by a Middle Eastern airline, raising questions about how he obtained this passport as he possessed no travel documents except his British passport when taken into custody.

Speculations suggest Anjarwalla might have planned his escape, potentially leveraging privileges granted during detention, such as access to telephones. While Nigerian authorities have not released an official statement, covert operations are speculated to be ongoing to ascertain his location and facilitate his return to custody.

This development further complicates tensions between Nigeria and Binance, with authorities accusing the exchange of exacerbating foreign exchange challenges and manipulating rates for personal gain. The exchange’s website has been blocked, and two senior executives were detained in an attempt to address concerns.

Despite a High Court directive for Binance to provide data related to Nigerian users to the Economic and Financial Crimes Commission (EFCC), the exchange has not yet complied. The detention of executives has drawn condemnation from international crypto organizations, particularly in the US and Kenya, criticizing the actions of the Nigerian government.

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Binance has announced its decision to discontinue support for USDC (USD Coin) deposits and withdrawals on the Tron blockchain, effective April 5. This move comes more than a month after Circle, the issuer of USDC terminated its USDC minting services on Tron.

Starting from 2:00 a.m. UTC on April 5, deposits of TRC20 USDC tokens will no longer be credited to users’ accounts on Binance, as stated in an official blog post by the crypto exchange. However, it’s important to note that this change solely affects USDC issued on the Tron blockchain and deposits and withdrawals of the stablecoin on other networks like Ethereum will remain unaffected.

Despite the discontinuation of support for TRC20 USDC, trading of USDC on Binance will continue without any interruptions.

Circle, the issuer of USDC, cited risk management as the primary reason for terminating USDC minting services on Tron. The company emphasized its commitment to ensuring the trustworthiness, transparency, and safety of USDC, which led to the decision to discontinue support on certain blockchains.

Although Tron’s role as a platform for USDC is diminishing, it remains the primary blockchain for USDT (Tether), the dominant stablecoin, with the majority of USDT supply still residing on the Tron network.

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Bored Ape Yacht Club #9258, previously owned by comedian Kevin Hart, was recently traded for approximately 13.26 ether ($46,200) on Blur, a non-fungible token exchange. This transaction marks a significant decrease from the price Hart originally paid for it over two years ago.

In January 2022, Hart acquired the Bored Ape, adorned with a colorful propeller hat, for 79.5 ether, equivalent to over $200,000 at the time, as per data from Blur.

Hart’s purchase was facilitated by crypto startup MoonPay, which reportedly aided several celebrities, including Justin Bieber, Madonna, and Jimmy Fallon, in obtaining BAYC NFTs. MoonPay’s assistance often came in exchange for promotional activities, although the company denied providing Bored Ape NFTs for free.

However, in December 2022, Hart, MoonPay, Bored Ape creator Yuga Labs, and numerous celebrities were embroiled in a class-action lawsuit filed by Scott + Scott, a California-based law firm. The lawsuit alleged a scheme of undisclosed celebrity endorsements, with auction house Sotheby’s added to the list of defendants last summer.

Since its launch in 2021, the Bored Ape Yacht Club has symbolized the non-fungible token market. Nonetheless, the collection has experienced a decline in floor price, reaching around 14 ether on March 23, down from a peak of over 150 ether in May 2022, according to CoinGecko data.

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According to CoinShares, crypto investment products faced unprecedented outflows last week, with a staggering $942 million exiting funds globally. This marks a significant shift from the seven-week streak of inflows totaling $12.3 billion.

Various asset managers, including BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares, witnessed record outflows totaling $942 million globally. This surpasses the previous record set at the end of January, almost doubling it.

The substantial outflows occurred amidst a 33% decrease in trading volume for crypto investment products, amounting to $28 billion for the week. Additionally, the price correction in underlying cryptocurrencies led to a $10 billion reduction in assets under management for these funds. Nonetheless, the combined AUM remains above previous cycle highs at $88 billion.

Despite over $1 billion in inflows into new spot Bitcoin exchange-traded funds in the U.S., it was insufficient to offset nearly $2 billion in outflows from Grayscale’s converted GBTC fund. The recent price correction prompted hesitancy among investors, resulting in lower inflows into new ETF issuers in the U.S.

The dominance of U.S. spot Bitcoin ETFs drove the majority of net outflows last week, contributing $904 million, while short-bitcoin investment products saw minor outflows of $3.7 million.

Poor sentiment extended beyond U.S.-based funds and Bitcoin, affecting crypto investment products globally. Funds in Sweden, Hong Kong, Switzerland, and Germany experienced outflows, while Brazil and Canada-based funds saw inflows. Ethereum, Solana, and Cardano-based products also suffered outflows, while other altcoin-related funds fared better, registering net inflows.

Bitcoin is currently trading at $66,827, reflecting a 2% decrease over the past week. The broader crypto market also experienced a decline, with the GM30 index falling 10% before partially recovering.

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The London Stock Exchange (LSE) has designated May 28 as the start date for trading in Crypto Exchange-Traded Notes (ETNs). Only professional investors will have authorization to engage in trading activities related to these ETNs. ETN issuers have until April 15 to submit their plans, ensuring eligibility for trading commencement in May.

The LSE decided to commence trading on May 28 after careful consideration. It allows sufficient time for ETN issuers to meet the requirements outlined in the Crypto ETN factsheet. Additionally, it provides issuers planning to admit securities on the launch date ample time to prepare documentation, including the approval of a base prospectus by the Financial Conduct Authority (FCA), as stated in a market notice released by the LSE on Monday.

One of the requirements specified in the Crypto ETN factsheet is that Crypto ETNs admitted to trading on the LSE are solely appropriate for professional investors and are available under trading segments designated exclusively for “Professional investors only.”

ETNs function as debt securities that track an underlying asset. Consequently, Crypto ETNs will enable investors to trade securities reflecting the performance of crypto assets on the exchange.

While similar-styled Bitcoin exchange-traded funds (ETFs) launched in the U.S. in January have amassed $54 billion in assets under management, UK investors currently need access to these offerings. Notably, the UK Financial Conduct Authority (FCA) recently stated that it would not impede plans from Recognized Investment Exchanges (RIEs) like the LSE to list crypto ETNs.

To qualify for trading, ETN issuers must meet the deadline of April 15, as outlined in the LSE notice, and gain approval by May 22.

The impending availability of crypto exchange-traded notes has been viewed positively by industry leaders in the UK. Coinbase UK CEO Daniel Seifert and Kraken UK Managing Director Bivu Das expressed optimism about the potential benefits of offering Bitcoin ETFs in the UK, emphasizing the importance of consumer choice.

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