What happened this week in the world of blockchain and cryptocurrencies? The most relevant local and international events as well as appealing background reports in a concise and compact weekly review.
Selected articles of the week:
Since the approval of the first spot Bitcoin ETFs in the US, the Grayscale Bitcoin Trust (GBTC) has dominated trading volumes. Trusts from crypto asset manager Grayscale are investment vehicles that enabled investors to make easy crypto investments back in 2013. Accordingly, Grayscale raised over USD 30 billion in assets through the trusts. However, as trusts, the Grayscale products were always closed investment vehicles. Shares cannot be freely created or redeemed by purchasers. Only accredited investors have access to the primary market, which includes a six-month lock-up period to unlock the secondary market. Various players tried to exploit this quasi-arbitrage trading for their own benefit. However, what began before 2020 as a premium in the high double-digit percentage range turned into a deep discount against the Bitcoin price over the years. The flagship product GBTC turned into a ticking time bomb. Various players who leveraged the trade collapsed. Some traders bought GBTC at a record discount of almost 50%. The conversion into an ETF means that these funds are now liquid. Since the start of trading, USD 5 billion has flowed out of the Grayscale Trust, some of which ended up in other ETFs, while insolvent players such as FTX converted their shares into fiat.
A complete overview of the day’s events on the (crypto) markets. Compactly summarized in the CVJ.CH Market Commentary.
Bitcoin is the first successful implementation of a decentralized digital currency. The distributed payment system enables the secure and direct exchange of digital money without the need for an intermediary. As an essential component of this vision of an independent network, Bitcoin’s monetary policy is programmatically defined. The inflation of “digital gold” reduces every four years and will finally end around the year 2140, when the maximum number of 21 million Bitcoin is reached. This reduces the daily selling pressure of miners and has been a guide for traders in the past.
In less than a year, the bitcoin inflation rate will be reduced by another “halving” – all relevant information.
As the world’s largest exchange, Binance has long been able to operate various levers and generate far-reaching effects on the entire ecosystem. A year ago, the exchange introduced fee-free trading for the relatively small stablecoin TrueUSD. Within a few weeks, more than a billion USD flowed into the dollar token and BTC/TUSD became the highest-volume trading pair. But last September, Binance replaced TUSD trading pairs with a new stablecoin – FDUSD. And last week, the exchange also excluded TrueUSD from participating in Binance launch pools. The stablecoin quickly faltered and is currently trading at USD 0.987.
A summarizing review of what has been happening at the crypto markets of the past week. A weekly report in cooperation with Kaiko.
BlackRock’s ETF application gave Bitcoin a significant tailwind in the second half of 2023. The largest cryptocurrency by market capitalization closed the year at +155%. Some traders are now hoping for a similar price trend for Ether (ETH). This is because the world’s largest asset manager submitted an ETH ETF in November, which could be approved as early as this May. This would provide cheap entry for a broad US investor base and enable a degree of diversification.
An analysis of ETH’s market structure and whether a spot ETF could generate the same level of enthusiasm that BTC’s did.
In addition: This week, the Swiss-based crypto bank Sygnum closed a strategic growth round worth USD 40 million. Following the completion of this interim round, the company’s valuation stands at USD 900 million. The round was oversubscribed and was led by global asset management group Azimut Holding. The proceeds will be used to expand geographic reach and accelerate the development of fully regulated products.
The Switzerland-based crypto bank Sygnum closed a strategic growth round worth 40 million US dollars at a valuation of 900 million USD.
