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NYDIG Submits Application of Bitcoin ETF to US SEC with Morgan Stanley on Board

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The shares of the NYDIG Bitcoin ETF will trade on the New York Stock Exchange (NYSE), while the NYDIG Trust will hold the custody of the Bitcoins in the fund.

On Tuesday, February 16, the New York Digital Investment Group (NYDIG) filed a Form-S1 registration statement for Bitcoin ETF with the US Securities and Exchange Commission (SEC). This is the first Bitcoin ETF application to the US SEC this year in 2021.

The filing also lists NYDIG Trust Company LLC that will serve as the fund’s Bitcoin custodian. More interestingly, banking giant Morgan Stanley will also be the authorized participant. The NYDIG filing states that the Bitcoin ETF shares will trade on the New York Stock Exchange (NYSE). The filing submitted to the SEC by NYDIG notes:

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“The [NYDIG Bitcoin Trust’s] investment objective is to reflect the performance of the price of bitcoin less the expenses of the Trust’s operations. The Trust will not seek to reflect the performance of any benchmark or index. In seeking to achieve its investment objective, the Trust will hold bitcoin. The Trust will value its assets daily in accordance with Generally Accepted Accounting Principles, which generally value bitcoin by reference to orderly transactions in the principal active market for bitcoin.”

Just like digital asset manager Grayscale, NYDIG is also a dominant player in the crypto space. NYDIG serves some big institutional clients and helps them get exposure to cryptocurrencies like Bitcoin. The last year-end in November & December 2020, NYDIG raised around $150 million via two crypto investment funds. In 2018, NYDIG also secured the BitLicense from the New York State Department of Financial Services (NYDFS).

More Bitcoin ETF Applications Coming in 2021

Analysts are expecting that we can see a flood of Bitcoin ETF applications this year in the market. This is because unlike 2018, the Bitcoin rally this time is backed by solid institutional interest. Interestingly, some of the big corporates are also showing interest in Bitcoin following Tesla‘s move last week.

So far in the past, nearly 10 firms have filed for Bitcoin ETF and failed to get approval. The SEC, however, has rejected every proposer citing security concerns. However, with strong institutional participation, things could be different this time. Jeff Kilburg, founder and CEO of KKM Financial and a partner at Valkyrie, told CNBC:

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“I think this is all coming together here in 2021. If they can offer a solution via an ETF, regulate it and it can trade more accurately to the actual spot price of bitcoin, that’s the win-win solution for all active and passive investors, even the ‘hodlers’”.

You can find other crypto-related news here.

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Bitcoin Taps $44K: DeFi Tokens Explode Amid Chinese Regulatory Uncertainty (Market Watch)

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The cryptocurrency market cap is up by $150 billion in a day as numerous DeFi coins have exploded by double-digits. Bitcoin stands near $44,000.

After dumping below $41,000, bitcoin initiated an impressive leg up, resulting in tapping $44,000. Tokens from the decentralized finance space have charted even more notable gains in the past 24 hours, including a massive 30% surge from Uniswap.

Bitcoin Gained $3K in Hours

Unlike the previous weekends, this one wasn’t uneventful for BTC’s price. The cryptocurrency had just come off a bearish Friday in which it dropped by $4,000 in minutes following the latest FUD statement from China.

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Bitcoin spent the Saturday aiming to recover most losses, but the bulls drove it as high as $43,000. Sunday, though, started with enhanced volatility once again.

BTC slumped by a few thousand dollars and dropped below $41,000 for the second time in two days. However, as the bears were preparing to take it further south to $40,000, the situation changed.

In just a matter of minutes, bitcoin spiked by roughly $3,000 and neared $44,000. In the following several hours, the asset went further and briefly exceeded the $44,000 mark. As of now, it has retraced slightly and stands just below it.

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Bitcoin’s market capitalization has gone over $800 billion, while the dominance over the alts has declined to just above 42%.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

DeFi Tokens Surge

Most larger-cap altcoins have mimicked BTC’s performance since late last week. Ethereum dumped hard yesterday again to below $2,800, but an 11% increase has driven it back to around $3,100.

Binance Coin (8%), Ripple (6%), Solana (9%), Polkadot (7%), Dogecoin (4.5%), Avalanche (8.5%), and Luna (6%) are well in the green. Interestingly, Cardano has gained just a modest 2.5% in a day, despite the multiple new partnerships coming from the project’s summit during the weekend.

The most substantial increases are coming from tokens related to the decentralized finance space. Uniswap leads the way with a massive 34% surge in a day. As a result, UNI has neared $25.

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PancakeSwap (14%), Aave (16%), The Graph (14%), Compound (17%), SushiSwap (30%), and more follow. This could be related to the latest activities coming from China, as reports suggested that locals are now turning to DeFi products since the country banned cryptocurrency trading – once again.

Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto

Ultimately, the cryptocurrency market capitalization has increased by more than $150 billion since yesterday’s low, but it’s still beneath $2 trillion.

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Bitcoin (BTC) Lightning Network Capacity Tops 2,900 BTC, Twitter Can Boost Further

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While Bitcoin (BTC) has remained volatile for most of September 2021, the developments taking place with the Bitcoin Lightning network are going strong.

As we know, the Bitcoin Lightning Network is a “layer 2” payments protocol designed atop the Bitcoin blockchain network. There’s an exponential growth in the Bitcoin Lightning Network capacity which has now surged past 2,9000 BTC, as per data on Glassnode.

Courtesy: Glassnode

This year of 2021, in particular, has been very strong considering the Bitcoin Lightning Network growth. Since the beginning of 2021, the Lightning Network capacity has surged by 160%, while the number of active nodes and the number of channels have grown nearly by 100%.

As of press time, the number of active nodes on the BTC Lightning Network is 15,697 while the number of active channels has shot past 73,000. On the other hand, some big companies like Twitter are looking forward to taking benefit of these developments.

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Twitter Can Boost Lightning Network Use

Last week, Twitter announced the Bitcoin tipping feature making it one of the biggest BTC adoption news by a tech giant. Interestingly, Twitter will be leveraging the Bitcoin Lightning Network to facilitate payments and BTC tipping.

To facilitate its Bitcoin tipping feature, Twitter has partnered with payments application Strike built atop the Bitcoin Lightning Network. The Twitter announcement read:

“People can now seamlessly tip with Bitcoin using Strike – a payments application built on the Bitcoin Lightning Network that allows people to send and receive Bitcoin.

People in the eligible markets will have to sign up for a Strike account and add their Strike username to receive Bitcoin tips over the Lightning Network. You can use any Bitcoin Lightning wallet to send tips to someone’s Strike account”.

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As Bitcoin adoption continues to increase, the Bitcoin Lightning network will play a crucial role in increasing the Bitcoin utility. The participation of such big players will further boost the adoption curve.

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Bitcoin Can Become The 21st Century Digital Gold, Says Deutsche Bank’s Macro Strategist

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While Bitcoin can continue growing to become the “digital gold,” Ethereum has the ability to be the “digital silver,” according to Marion Laboure.

Marion Laboure – Macro Strategist at Deutsche Bank – believes bitcoin has the potential to become the “digital gold” of this century. However, she expects the cryptocurrency’s price to be “ultra-volatile” in the next few years.

Laboure also praised Ethereum’s use cases, labeling the asset as the “digital silver.”

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BTC – The Gold of The Future

According to Marion Laboure – Analyst and Macro Strategist at Deutsche Bank – Bitcoin possesses all the necessary qualities to step in when the world suffers from rising inflation, doubt, and fear due to the COVID-19 pandemic and the governments’ actions. As its supply is fixed (there will be no more than 21 million BTCs in existence), she stated that the asset could be a successful choice as a protection against the growing inflation.

The increased control by authorities over the population could be another factor that would make bitcoin attractive to the people. Laboure reminded that in such cases, throughout the years, humankind has turned towards assets that were not under the governments’ jurisdiction, such as gold. With that said, the executive believes BTC could become the “21st-century digital gold.”

It is worth noting that Deutsche Bank had a different opinion on the matter in the recent past. Last year, a report from the German multinational investment bank stated that bitcoin’s high volatility is an obstacle that makes the digital asset not a “reliable source of value.”

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According to Laboure, though, BTC’s enhanced fluctuations would not last forever. The asset remains “risky” as of the moment and could be “ultra-volatile in the foreseeable future” but just like gold, which has also experienced this issue, BTC would eventually overcome it.

While bitcoin is the pioneer in the crypto space and the largest digital asset by market capitalization, Laboure also praised Ethereum’s merits. She pointed out that it is more than a cryptocurrency as it offers many applications and use cases such as decentralized finance (DeFi) projects.

In fact, most of the trendy non-fungible tokens (NFTs) are part of the Ethereum blockchain and she noted ETH could be the “digital silver.”

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Laboure concluded that no other cryptocurrency would become stronger than Bitcoin or Ethereum in the next five years.

Marion Laboure
Marion Laboure, Source: Deutsche Bank

Crypto’s Obstacles

Deutsche Bank’s strategist also spoke about the disadvantages of the cryptocurrency space with lack of regulation being the main one. She sees the industry much more settled once this issue gets solved. The environmental concerns that crypto mining causes are the other big hurdle:

“In one year, Bitcoin uses around the same electricity as the entire population of Pakistan (c.217M people),” she reminded.

This has been a growing concern this year, but the number of companies and parties aiming to solve it has increased exponentially as well. For instance, several leading cryptocurrency exchanges have already launched initiatives that would make them carbon neutral, including FTX, BitMEX, and Gemini.

CBDCs, Cash, And Crypto

Laboure also gave her two cents about central bank digital currencies. She prefers decentralized cryptocurrencies saying that the centralized nature of the CBDCs would not be attractive to society. In any case, she believes both assets together with cash would successfully co-exist in the economic network.

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On another note, Deutsche Bank’s CIO, Christian Nolting, opined somewhat differently on the matter. Back in May, he said that the impending launch of CBDCs would be a major threat to bitcoin in terms of serving as a currency:

“A widespread introduction of CBDCs accompanied by higher regulation of cryptocurrencies could create a more challenging environment for crypto assets as some of their advantages compared to traditional financial assets would fade in the longer term.”

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