BITO Proshares Bitcoin Strategy ETF

Lesser-known tokens gain prominence in the crypto market

While Bitcoin (COIN:BTCUSD) remains stagnant at $42,500, smaller tokens such as Chiliz (COIN:CHZUSD) and Klaytn (COIN:KLAYUSD) are gaining attention in the cryptocurrency market. CHZ, used to buy Fan tokens on Socios.com, rose 40.3% in the last 7 days. KLAY, supported by the giant Kakao, shows a weekly increase of 12.20%. Chiliz plans an aggressive strategy of mergers and acquisitions, while Klaytn proposes a merger with the Finschia Foundation to form a large Web3 ecosystem in Asia, promising to create a new currency with additional benefits for token holders. Render (COIN:RNDRUSD) records a 5% rise at the time of writing, with gains of 8.6% in the last 7 days, after announcing the integration of its interoperability protocol between chains to Circle’s cross-chain transfer protocol. Another highlight was the Chainlink token (COIN:LINKUSD), which rose 4.9% in the last 24 hours and 17% in the week, driven by its function as a decentralized oracle that connects different blockchains.

Ethereum tests Dencun update with proto-danksharding on Goerli

Ethereum’s (COIN:ETHUSD) main developers have implemented the Dencun update, including proto-danksharding (EIP-4844), on the Goerli testnet, marking an important step before its mainnet launch. Despite initial challenges such as a possible “chain split,” the Goerli fork was successful. This update introduces ephemeral blobs or proto-danksharding, aimed at reducing transaction costs on Ethereum, especially for Layer 2 dApps and rollups. The next steps include activations on other testnets, with the expectation of a mainnet launch by the end of the first quarter of 2024.

Comparing the launches of Bitcoin and gold ETFs in the USA

Analyses show that the launch of spot Bitcoin ETFs in the USA surpassed that of the first gold ETF (AMEX:GLD) in 2004 in terms of daily volume. On the first day, the Bitcoin ETFs recorded $2.3 billion in volume, compared to $265 million for GLD. Despite larger volumes for Bitcoin, its price fell 7.4% in the first three days, contrasting with a 1.3% increase for gold. Initially, the Bitcoin ETFs quickly reached an AUM of approximately $1.8 billion. In contrast, GLD, at its 2004 launch, had a slower start. It took 36 days for GLD to accumulate an AUM approaching the $1.8 billion mark, a deficit of $550 million compared to the initial performance of the Bitcoin ETFs. Gold and Bitcoin ETFs are now the two main ETF commodity asset classes in the USA in value. The total volume of the new ETFs exceeded $9.5 billion in the first three days, showing robust performance in the cryptocurrency market.

Three main Bitcoin ETFs dominate the market in trading volume

In the first days of trading, three spot Bitcoin ETFs, offered by Grayscale (AMEX:GBTC), BlackRock (NASDAQ:IBIT), and Fidelity (AMEX:FBTC), dominated the market, accounting for about 90% of the total volume. While Grayscale’s ETF faces significant outflows, BlackRock’s is seen as the likely new leader in liquidity, and Fidelity’s also recorded substantial inflows.

Grayscale makes large Bitcoin transfers to Coinbase Prime

Arkham Intelligence reported that Grayscale transferred 18,400 BTC to a Coinbase Prime wallet on January 17, totaling approximately $800 million. This action follows a similar transaction of $387 million the previous day. These movements, occurring moments before the opening of the US market, suggest a market strategy and possible redemptions from Grayscale. These transfers may be providing liquidity for new investments in Bitcoin ETFs, with Coinbase Prime acting as a key channel for Bitcoin purchases by the ETF Trust (AMEX:GBTC).

ARK Invest rebalances ETFs

ARK Invest, led by Cathie Wood, restructured its cryptocurrency investments by selling 757,664 shares of the ProShares Bitcoin Strategy ETF (AMEX:BITO) for $15.8 million and buying an equivalent amount of the Ark 21Shares Spot Bitcoin ETF (AMEX:ARKB). This change reflects a strategy to obtain more direct exposure to Bitcoin (COIN:BTCUSD), reducing costs and increasing competitiveness in the market. The company still holds 3.4 million shares of BITO, but this realignment suggests a possible future increase in investments in ARKB, aligned with ARK’s recent request to the SEC to invest up to 25% in a subsidiary.

ProShares proposes new leveraged and inverse Bitcoin ETFs to the SEC

ProShares has requested SEC approval for five new Bitcoin ETFs, including leveraged and inverse options. According to a January 16 filing with the financial regulator, the new ProShares applications consist of the ProShares Plus Bitcoin ETF, ProShares Ultra Bitcoin ETF, ProShares UltraShort Bitcoin ETF, ProShares Short Bitcoin ETF, and ProShares ShortPlus Bitcoin ETF. These funds, which do not directly invest in Bitcoin, seek to replicate up to twice the daily performance of the Bloomberg Galaxy Bitcoin Index (AMEX:BITI), both in upward and downward market movements. The NYSE also proposed listing options for spot Bitcoin ETFs.

New benchmark for cryptocurrencies: CoinDesk launches CoinDesk 20 Index

The CoinDesk 20 Index is the new cryptocurrency benchmark, similar to the Dow Jones Industrial Average, offering an overview of the market. Launched by CoinDesk Indices, this index includes 20 of the largest and most liquid cryptocurrencies, such as bitcoin (COIN:BTCUSD) and ether (COIN:ETHUSD). Bullish, a CoinDesk exchange, already offers perpetual futures tied to this index, which surpassed $1 million in trading volume soon after launch. With maximum weights of 30% and 20% for bitcoin and other members, respectively, the CoinDesk 20 seeks to be a diversified and reliable barometer for the cryptocurrency market.

US temporarily relaxes cryptocurrency tax reporting rules

The US Treasury Department and the IRS announced a temporary revision in the tax reporting rule for cryptocurrency transactions. Initially, transactions over $10,000 required extensive reporting, but now companies are exempt from these requirements until the introduction of formal cryptocurrency regulations. The government plans to implement detailed rules for reporting the receipt of digital assets and will open up for public feedback. The temporary change comes amid efforts to standardize cryptocurrency reporting and ensure tax compliance.

Cantor Fitzgerald CEO confirms Tether reserves

Howard Lutnick, CEO of Cantor Fitzgerald, confirmed that Tether (COIN:USDTUSD) has the billions necessary to support USDT at a 1-to-1 ratio. During an interview at the World Economic Forum on Bloomberg, Lutnick assured that Tether has the assets to back its stablecoin, the largest in market capitalization. This statement comes in response to persistent doubts about Tether’s reserves, which claims to have assets of about $86 billion to support USDT. Cantor Fitzgerald, as custodian of Tether’s assets, plays a crucial role in managing these reserves.

Jamie Dimon, CEO of JPMorgan, expresses disdain for Bitcoin in Davos

In Davos, Switzerland, Jamie Dimon, CEO of JPMorgan (NYSE:JPM), criticized bitcoin (COIN:BTCUSD) during an interview on CNBC. He expressed disinterest in the $830 billion digital asset, asking journalists to stop discussing the topic. While acknowledging the use of blockchain and differentiating useful cryptocurrencies from others with no value, such as bitcoin, Dimon showed openness for others to invest as they prefer. His previous negative statements about bitcoin coincided with greater adoption by his company, raising suspicions of deceptive strategies. Even with the approval of Bitcoin ETFs and growing interest from JPMorgan clients, the price of bitcoin fell, and analysts at the bank doubt the impact of these funds on the asset’s value.

AltLayer launches ALT token on Binance with rewards and airdrops

AltLayer, specializing in decentralized rollups, announced the launch of its ALT token on the Binance Launchpool. Starting Friday, Binance users can use Binance Coin (COIN:BNBUSD) and FDUSD (COIN:FDUSDUST) to obtain ALT tokens, which will be listed on January 25 with multiple trading pairs. The initial allocation of 500 million ALT represents 5% of the total 10 billion. There will be an airdrop for early supporters and campaign participants, excluding US residents. The ALT token, in addition to its economic utility and governance, is part of a strategy to strengthen the security and decentralization of the AltLayer network.

Socket and Bungee resume after $3.3 million exploitation

Following a pause due to a $3.3 million exploitation, the interoperability service Socket and its bridge platform Bungee have resumed operations. The attack focused on wallets with infinite approvals for Socket contracts. The Socket team quickly halted activities to contain the spread of the attack and stated that the issue was resolved. These incidents highlight the risks associated with cross-chain bridges, a common target of attacks in the cryptocurrency sector.

Parents of Sam Bankman-Fried seek dismissal of FTX lawsuit

Joseph Bankman and Barbara Fried, parents of FTX founder Sam Bankman-Fried, are contesting the lawsuit filed by the exchange, denying involvement in fraudulent transfers or breaches of fiduciary duties. They claim that their familial relationship with their son does not constitute a legal basis for the charges. FTX’s lawsuit, which seeks compensation for alleged financial damages, accuses the parents of enriching themselves through the company. The parents refute the allegations, including the misuse of Blue Water property in the Bahamas and pressure for political and charity donations.

Core Scientific approves recovery plan and prepares to exit bankruptcy

Bitcoin miner Core Scientific (USOTC:CORZQ) has received judicial approval for its reorganization plan and expects to exit Chapter 11 bankruptcy later this month. CEO Adam Sullivan highlights this development as a crucial step in strengthening the company, which plans to capitalize on the growing demand for Bitcoin (COIN:BTCUSD) and high-value computing. The plan involves the issuance of common shares and warrants, representing 60% of the new capital, and will reduce the company’s debt by approximately one billion dollars. Listing on Nasdaq is scheduled for January 24, 2024. Core Scientific, which filed for bankruptcy in December 2022, secured a loan from BlackRock (NYSE:BLK) and expanded its partnership with Bitmain during the process.