BITO ProShares Bitcoin ETF

Widespread fall in the cryptocurrency market: Bitcoin drops to the level of US$40,000

The cryptocurrency market faced a sharp drop, with bitcoin (COIN:BTCUSD) falling below US$41,000. At the time of writing, Bitcoin was trading down 1.6% at $40,608. Ether (COIN:ETHUSD) also followed the downward trend, declining by 1.3% to US$2,434. This devaluation affected the entire market, including shares of companies linked to cryptocurrencies. Moreover, this Friday, Bitcoin options worth $890 million and Ethereum options worth $520 million will expire.

Julio Moreno of CryptoQuant attributes the drop to the post-launch correction of the ETF and sales by large bitcoin holders. Bitget analyst Fernando Pereira also analyzed the bitcoin situation, predicting an imminent test of the $40,000 support, a point of high trading volume, especially from short-term traders. He believes that the weekend could close above this mark, but anticipates a drop below it in the following week, indicating a scenario of uncertainty and volatility in the cryptocurrency market. “BTC is about to test the $40,000 support. This should be a region with a lot of trading volume, especially from short-term traders, who should open long positions aiming for a slight increase. I believe that we will spend the weekend above this region, but that we will work below it the following week,” said Pereira.

Uma token price soars with MEV protection plan for lending protocols

The price of the Uma token (COIN:UMAUSD), native to the Uma protocol, jumped 112%, from US$2 to US$ 5.78, after announcing an MEV solution aimed at securing lending protocols. Uma’s market capitalization reached nearly $370 million, the highest since mid-2022. The solution, named Oval, will focus on protecting against significant annual losses from lending protocols due to MEV. The launch is scheduled for next week.

Aave proposes Chainlink CCIP integration to improve GHO

DeFi platform Aave has proposed integrating Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to enhance secure transfers of its stablecoin GHO (COIN:GHOUSD) between different blockchains. This change aims to overcome the current limitations of GHO, which is primarily accessible through Ethereum or secondary markets. The CCIP integration aims to transform GHO into a multichain asset, increasing its liquidity and accessibility, and strengthening Aave’s total locked value.

Ethereum sees 24% of supply staked

Ethereum (COIN:ETHUSD) has reached a notable milestone, with 24% of its total supply now being staked. This trend indicates ETH holders’ preference for generating passive income through staking, rather than seeking immediate profits from selling. The Shapella upgrade, which introduced withdrawal of staked ETH, strengthened this trust, resulting in a substantial increase in the market value of Ethereum staking to $72.75 billion.

Blackrock raises Bitcoin holdings in iShares ETF

Blackrock has increased its Bitcoin holdings in the iShares ETF (NASDAQ:IBIT), now holding 28,622 Bitcoins, after adding approximately 3,555 BTCs recently. The latest acquisition on Jan. 16 added 8,705 BTC, making this the smallest addition since the fund’s launch. The fund, which was the first to exceed US$1 billion in assets, continues to expand and now has a notional value of US$1.2 billion. The Fidelity ETF (AMEX:FBTC) also surpassed the $1 billion mark in inflows in the first five days of trading.

Grayscale CEO defends high Bitcoin ETF fees and predicts market downturn

After the launch of spot ETFs, Bitcoin (COIN:BTCUSD) fell more than 13%, with billions leaving GBTC Grayscale. Some of that capital came from investors switching to ETFs with lower fees, while others took profits. Investors who purchased GBTC (AMEX:GBTC) at lower prices are exiting the Bitcoin space altogether, opting not to switch to cheaper ETFs. JPMorgan (NYSE:JPM) sees continued outflows and downward pressure on GBTC fees, while other ETFs attract significant capital inflows. However, Michael Sonnenshein, CEO of Grayscale Investments, defended the Grayscale Bitcoin Trust ETF’s 1.5% fees in an interview with CNBC, highlighting its track record of success and diverse investor base. He predicts that many of the recently approved bitcoin ETFs with lower fees will not survive in the market, as most charge between 0.2% and 0.4%. Sonnenshein highlights the lack of track record of these products and suggests that only a few will reach critical asset management mass.

ARK Invest transfers investments from BITO to its own Bitcoin ETF

ARK Invest is redirecting its investments from the ProShares Bitcoin Strategy ETF (AMEX:BITO) to ARKB (AMEX:ARKB), its own recently launched bitcoin ETF. According to recent disclosures, the ARK Next Generation Internet ETF (AMEX:ARKW) sold 758,915 shares of BITO, totaling approximately US$15 million, and acquired an equivalent value in ARKB shares. This move follows ARK’s strategy of focusing on spot bitcoin ETFs following US approval.

Impacts of Bitcoin ETFs on the market and the next halving

Following the introduction of spot bitcoin ETFs in the US, there has been an increase in outflows from European bitcoin exchange-traded products (ETPs), according to Luke Nolan of CoinShares. The trend indicates a redirection of US institutional traders’ investment strategies towards new domestic ETFs. Previously, many US institutions used European ETPs for almost risk-free trading, but now find greater convenience and profitability in domestic ETFs. Nolan notes that this change has also affected Canadian bitcoin ETPs, with American investors preferring the new US funds. The focus now turns to Bitcoin’s next big event: the halving, scheduled to take place in less than 100 days. Historically, halvings have correlated with rises in Bitcoin prices, but the introduction of spot bitcoin ETFs could influence price predictions this round. The halving, an event scheduled to occur approximately every four years, cuts miners’ rewards in half, creating scarcity and potentially affecting the value of Bitcoin. The cryptocurrency community closely monitors these events, considering their impact on the overall Bitcoin supply and market dynamics.

JPMorgan sees 50% chance of Ether ETF approval by May

The market is optimistic about the possible approval of an ETF for Ethereum (COIN:ETHUSD) by May 23, but JPMorgan (NYSE:JPM) evaluates this probability at just 50%. The expectation follows the trend of last year’s Bitcoin ETF, with Ether being seen as the next candidate. Although some see positive signs, such as the SEC not mentioning ETH in lawsuits against exchanges, JPMorgan remains skeptical, especially in the wake of Ethereum’s transition to PoS, and the current regulatory challenges facing staking exchanges.

South Korea reassesses position on cryptocurrency ETFs and reflects Asian divergences

The Office of the President of South Korea has urged the Financial Services Commission (FSC) to re-evaluate its stance on spot cryptocurrency Exchange Traded Funds (ETFs). Tae-yoon Sung, head of presidential policy, highlighted the need for a flexible approach, considering whether foreign ETFs are suitable for the domestic market. This follows a warning from the FSC against the intermediation of foreign ETFs by domestic companies. The South Korean position reflects the division in Asia; while Singapore and Thailand are cautious, and Hong Kong indicates openness to spot Bitcoin ETFs.

Taiwan election victory boosts cryptocurrency regulation

The re-election of Lai Ching-te in Taiwan, an advocate of AI and blockchain, signals a breakthrough in cryptocurrency regulation. His party has already prepared a bill establishing minimum standards for exchanges and reinforcing consumer protection. While no rival is against blockchain, growing intolerance of crypto crimes highlights the need for strict regulation, especially amid concerns about fraud and the use of cryptocurrencies in election campaigns.

China establishes working group to standardize the metaverse

China has created a working group led by the Ministry of Industry and Information Technology to promote standardization in the emerging metaverse sector. With representatives from the government, academia and large technology companies, such as Huawei and Tencent, the objective is to establish industrial standards and unify consensus. This aims to reduce redundant costs and boost industrial development, facing speculation and disagreement over the definition of the metaverse.

Forbes introduces Connect Wallet platform

Forbes launched Connect Wallet, an innovative platform that offers free access to premium content and active engagement in web3 coverage. Functioning as a cryptographic storage solution and portal for an exclusive club, the platform allows users to co-create content and access expert advice and investment signals. The partnership with Magic, a web3 infrastructure provider, ensures efficient and reliable integration, representing a breakthrough in web3 adoption.

Coinbase heads for legal victory against SEC with 70% chance

A Bloomberg Intelligence analyst, Elliot Stein, rates Coinbase’s (NASDAQ:COIN) chances of winning the legal battle at 70% against the US SEC. After a recent hearing, Stein realized that Coinbase could achieve an outright dismissal of the case. Judge Katherine Polk Failla questioned the SEC on its definition of “investment contract,” favoring Coinbase’s interpretation. Furthermore, Ripple’s (COIN:XRPUSD) victory in a similar case and Coinbase’s effective refutation of brokerage allegations strengthens its position. Stein suggests that a move to the Supreme Court could refine the application of the Howey Test, narrowing its scope in relation to digital assets.

HTX and HTX DAO resume services after DDoS attack

Cryptocurrency exchange HTX and HTX DAO quickly recovered from a DDoS attack on Friday, restoring services after a 15-minute outage. Justin Sun, HTX’s consultant, confirmed the restoration of services. This type of attack overwhelms the system with excessive requests, aiming to take it offline. HTX had previously suffered an attack in November, resulting in the theft of approximately $97 million.

Manta Network suffers DDoS attack during token issuance

Manta Network, a blockchain startup, encountered a distributed denial of service (DDoS) attack during the issuance of its MANTA token. This resulted in extended withdrawal times and network sluggishness. The Manta team confirmed the accumulation of pending transactions and is working to resolve issues related to transaction delays and increased gas fees. This attack occurred during the initial token launch period of MANTA.

Copyright challenges and solutions in the age of AI: The role of blockchain

With the rise of AI technologies like ChatGPT and Midjourney, copyright issues become critical. Recently, The New York Times (NYSE: NYT) sued OpenAI and Microsoft (NASDAQ: MSFT), alleging the unauthorized use of its articles for AI training. OpenAI responded that it is impossible to develop advanced models without protected material. Michael Sonnenshein, CEO of Grayscale, proposes blockchain as a solution, arguing that it can ensure fair compensation and ownership while addressing authenticity and intellectual property issues. This technology could transform how AI and copyrights coexist, benefiting creators with transparency and fair compensation.

Donald Trump launches a new NFT collection on the Bitcoin blockchain

Former U.S. President, Donald Trump, is launching a new NFT collection on the Bitcoin blockchain, aiming to revitalize his campaign with fresh funds. The collection, named “Trump MugShot,” will include 200 cards minted on the blockchain and will be available for sale on Magic Eden. Buyers of the first 100 NFTs will receive an exclusive certificate and VIP tickets to an event at Mar-a-Lago. The collection represents a new foray by Trump into the world of NFTs and digital collectibles.