BlackRock has applied with the SEC to offer a spot Bitcoin ETF.
Other institutional investors like ARK and Grayscale are also waiting to hear from regulators about similar assets.
The development has sparked controversy in the crypto community as they try to determine if it is a good or a bad thing for crypto, as BlackRock is the world’s largest investor and could lead to an ‘institutional Bitcoin grab’.
A BlackRock Bitcoin ETF has sparked controversy among the crypto community as they determine if the $10T asset manager is their savior or doom. BlackRock is known to own large amounts of shares in most public companies. As such, the crypto community is not sure whether the application for a Bitcoin ETF will propel mainstream adoption or urge for centralized control.
Is BlackRock Bitcoin ETF the best thing to happen to crypto?
If approved, the BlackRock Bitcoin ETF will hit the U.S. markets first before being available in other nations. Per a filing by the Nasdaq stock exchange with the U.S. Securities and Exchange Commission, Coinbase Custody Trust Company will be the custodian of the fund’s Bitcoin funds. At the same time, the Bank of New York Mellon will be the custodian of its fiat reserves.
The Blackrock ETF filing is live, and it’s * SPOT *
“The assets of the Trust consist primarily of bitcoin held by a custodian on behalf of the Trust.”
The filing describes it as an iShares Bitcoin Trust that would be traded as Commodity-Based Trust Shares. An excerpt from the filling reads:
“The Shares have been designed to remove the obstacles represented by the complexities and operational burdens involved in a direct investment in bitcoin.”
The SEC has yet to approve a spot Bitcoin ETF despite numerous applications as it considers the asset highly unregulated. BlackRock reiterated this, saying:
“As such, the regulated market of significant size test does not require that the spot bitcoin market be regulated in order for the Commission to approve this proposal.”
Crypto community reacts to BlackRock Bitcoin ETF
The news of BlackRock Bitcoin ETF was received with mixed reactions by the crypto community, with individuals like Galaxy Digital CEO Mike Novogratz being among the ones over the moon with the news. However, some warned that it could be a start of a major institutional takeover.
In an interview on June 16, Mike Novogratz said that BlackRock Bitcoin ETF is “the best thing that could happen to BTC.”
“I say a Hail Mary every night that Larry Fink and BlackRock pull off a Bitoin ETF,” Novogratz added on the Fox News segment.
However, some people are against the introduction of the BlackRock Bitcoin ETF. Investor Scott Melker explained in a June 16 interview that approval would be a disservice to crypto-native innovators who built the industry.
“As good as this may be for institutional adoption of the space, it kind of violates the ethos, it is a bit of a dishonest push away from the people who built the industry in the United States.”
Conversely, some analysts feel that it’s likely that Bitcoin will hit the $1M mark. This has been a market sentiment shared by the likes of Balaji. Steven Lubka, a meaning director at Swan Bitcoin, has shared a similar view saying that BTC will hit the $1M mark. Still, only a few retail investors will reap the rewards as a bulk of the coins will be owned by large institutional investors like BlackRock, Goldman Sachs, and others.
The true government attack vector is not a ban, it's having Blackrock and Goldman pump spot etfs and all of the coins end up held by those etf issuers
BTC goes to $1mil, but no one owns any actual coins, just paper Bitcoin https://t.co/dgnm9QCUXk
Following the news, the Fear and Greed Crypto Index increased by 6 points from 41 to 47-leaving the fear zone. However, it’s still being determined if the market will get further momentum as the SEC may or may not approve the ETF. Keep watching Fintech Express for updates on this and other fintech-related developments.
A Tether USDT de-peg has sent a shockwave across the crypto market as Curve 3Pool seems to be in distress.
USDT’s value plummeted to slightly under a dollar, but issuing company, Tether, says it is ready to buy back any amount while it works on restoring the peg
Tether’s USDT traded on a discount of up to 0.25% on June 15, 2023, due to imbalances in Curve 3Pool. Curve 3Pool is one of the most popular pools for stablecoin trading in decentralized finance. Therefore, a miscalculation or imbalance of reserves can affect its stablecoins.
Tether is ready to buy back any USDT amounts to restore the peg
Tether Chief Technology Officer (CTO), Paolo Ardoino, has talked about the dip, saying that the imbalance in Curve 3Pool indicates a broader tension in the crypto market. In an interview with The Block, he expressed that Tether is a liquidity gateway in the crypto industry; when bull markets set in, they see inflows, and when a bear cycle occurs, outflows increase.
“Tether is the gateway for liquidity, inbound and outbound. So when the interest in crypto grows, we see inflows; when the sentiment on the crypto market is negative, we see outflows.”
It is not the first time that Curve 3Pool has had an imbalance. In March 2023, the pool had a similar issue where the balances of DAI and USDC stablecoins exceeded 45% of each. Also, in November 2022, after the collapse of FTX, the volatility in the pool was highly noticeable same as the Terra ecosystem collapse.
Despite the current situation looking ugly for a struggling market, Ardoino has said that the company is closely monitoring the situation and will have a remedy sooner than later. Keep watching Fintech Express for more updates on crypto and other fintech-related news and developments.
Tether CTO says that the money is necessary to facilitate chain swaps
The new 1B USDT coins take the total tally of the coins minted by Tether in 2023 to over $16B
Tether CTO says the newly minted $1B is for chain swaps
Tether CTO Paolo Ardoino has taken to Twitter to clarify why the issuer has minted a billion USDT. He says the new coins will facilitate chain swaps and won’t mix with the issued market cap.
Tether CTO Paolo Arddoin said that the amount is authorized but not issued. Therefore, the amount will be spent as an inventory for the next period of issuance requests and chain swaps.
PSA: 1B USDt inventory replenish on Ethereum Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.https://t.co/Y1bqxZglgR
A chain swap is a process where traders can transfer digital assets from one blockchain to another. For instance, you can swap USDT on the Ethereum network to Binance or Tron networks. This trader allows investors to access perks from different networks supporting the coins they hold.
Regarding the development, Tether CTO Ardoino explained that the company periodically works alongside different crypto platforms to help rebalance the liquidity of USDT across various blockchains. For instance, a platform could see a growing demand for USDT on the Tron network than the Ethereum network, necessitating a rebalance of the available USDT balances to serve the clients right.
By now, Tether has minted over $16B in 2023. It remains the world’s largest stablecoin and is pegged to the dollar. The stablecoin also brags a market capitalization of $83B, which takes its dominance out of reach of many crypto assets.
A crypto hack happened against Atomic crypto wallet, with at least $35 million being stolen.
Experts believe that North Korea could be involved with the hack as they are a major suspect in crypto hacks for a long time
Atomic Wallet falls prey to North Korean hackers?
Atomic Wallet was hacked last week losing upwards of $35 million. Now, North Korea seems to have been caught in another crypto hacking controversy as experts believe that it could be the perpetrator. A report by CNN outlines that the hackers drained crypto assets from the accounts of several customers of Atomic Wallet, an Estonia-based company with 5 million users.
Atomic Wallet reported on Saturday that less than 1% of its monthly users appeared to have been affected by the hack. However, it did not outline the specific amount of money that might have been stolen or who was behind the hack.
This hack was a series of cyber attacks against crypto projects linked to Pyongyang. U.S. officials fear these funds are being used to fund several unregulated projects in North Korea, like the nuclear and ballistic weapons programs.
North Korean hackers have been notoriously terrorizing the crypto industry with billions of dollars most likely to have ended up in their pockets. The recent hack against Atomic Wallet might prove to be one of their ‘paydays’ as Elliptic, a crypto-tracking firm, has uncovered the money laundering techniques and tools that North Korea-linked hackers have been seen to use before.
While no hard proof is found yet to incriminate North Korea or most other hackers, crypto developers can only work to outsmart them and keep funds safer. Keep watching Fintech Express for updates on crypto and other Fintech-related news.
The regulator will be accompanied by two more crypto organizations, Coinbase and Robinhood, which will serve as industry representatives and must testify.
“Tomorrow I have the honor of testifying on Capitol Hill before the House Committee on Agriculture to share Coinbase’s views on the Digital Asset Market Structure Discussion Draft […] released last week,” said Coinbase Chief Legal Office Paul Grewal in a statement on June 5.
Other witnesses in the proceedings will be former CFTC Chair Chris Giancarlo, former CFTC commissioner Dan Berkvitz and FIAconnect founder Walt Lukken. The developments come when an uproar regarding crypto regulation in the U.S. continues as the SEC keeps going after crypto organizations.
The moves by SEC have been heavily criticized as it is classifying select crypto assets as securities without following due process. As such, economists fear innovation will bypass the U.S. and head to other nations, which may affect their economies significantly in the long term.
In a June 5 Twitter thread, Grewal gave a rundown of what his testimony will focus on.
“The U.S. is falling behind. We cannot afford to ignore crypto while other markets take advantage of our absence, developing rules and regulations that enable the industry to thrive and risk sending jobs, investment, and technological leadership overseas,” Grewal noted, adding that:
“We need a clear rulebook in the U.S. to achieve the full promise of crypto. Until rules and laws are developed that reflect the realities of this new economic system, we cannot realize the full potential of making our financial system faster, fairer, and more affordable.”
He added
“While regulation establishes clear rules for the industry, it also provides important accountability measures for potential bad actors. U.S. legislation helps good guys innovate and ensures bad guys are held accountable.”
“How we define digital assets is critical for enabling innovation. Digital assets are diverse, and if we fail to effectively draw clear definitions of which assets are securities, which are commodities, and which are neither, crypto will continue to sit in regulatory limbo.”
Tomorrow I will be testifying on Capitol Hill before the House Committee on Agriculture on the need for clear crypto rules and the Digital Asset Market Structure Discussion Draft. Read a summary of my testimony here/below:https://t.co/V4vTo0OT6L
Texas has shown continued support for Bitcoin mining after introducing two bills to help provide incentives to miners
One bill requires miners with a power consumption rate of over 75 megawatts to register legally while the other makes tax exemptions for miners who make use of wasted energy resources.
Bitcoin mining encouraged in Texas
Texas has introduced bills SB 1929 and HB 591 which were primarily designed to help and provide incentives to the bitcoin miners. Talking in detail, SB 1929 needed miners who had an energy capacity of over 75 megawatts to register themselves with the Public Utilities Commission of Texas.
Apart from this, these mining organizations would also need to share their data with the Electricity Reliability Council of Texas. The second bill, HB 591seeks to effect the introduction of tax exemptions for organizations that make use of wasted gas, like data centers.
The bill named SB 1751 could result in limiting the bitcoin industry’s participation in a cost-saving demand-response program that offers power credit to miners when they reduce their operations during times when there is high energy. This bill, however, is yet to be introduced, but it has been recorded and thus can be passed in the future.
Most industry experts hold the view that an increase in communication can help in being transparent regarding data that is publicly available on mining. Apart from Texas, there are other states too which are supporting bitcoin mining. For instance, Arkansas and Montana have already come out in support of Bitcoin mining.
New York has also imposed a moratorium on new fossil fuel-based bitcoin mines, and then there is Oregon which is striving to reduce greenhouse gas emissions from data centers and miners. Additionally, Biden’s proposed 30% tax on Bitcoin mining is most likely put on hold giving Bitcoin mining a chance to thrive in the country. keep watching Fintech Express for updates on the crypto industry and other fintech-related developments.
