Connect with us

Bitcoin

Following the First Bitcoin ETF, Ethereum Might be Next

Published

on

With this week’s launch of the first bitcoin futures-backed ETF in the US now behind us, the market is already full of speculation about what comes next: An ethereum (ETH) ETF, a spot-based bitcoin ETF, or something else?

According to analysts, ETH should be the next digital asset in line to have an exchange-traded fund (ETF) backed by it. After all, the asset, like bitcoin, is traded on the regulated futures market that is the Chicago Mercantile Exchange (CME), which the US Securities and Exchange Commission (SEC) Chair Gary Gensler has previously hinted is necessary for any crypto-related ETF to be approved.

Further, we also know that the two major ETF providers ProShares and VanEck have previously filed proposals for ethereum-backed ETFs with the SEC, although both firms were later asked by the regulator to withdraw their applications. However, other ETH-based ETF proposals are still pending with the SEC, including one by Kryptoin Investment Advisors.

Advertisement

Just like the case was for bitcoin, an ethereum ETF is already listed in Canada, provided by CI Global Asset Management. In addition, a number of other exchange-traded investment vehicles that track the price of ETH are also listed in several European countries. 

“Going to start the campaign now for the SEC to approve an Ethereum ETF. Might as well get ahead of the crowd, because it’s coming eventually,” the popular crypto trader Scott Melker, also known as The Wolf Of All Streets, said earlier this month.

And while speculation continues about a potential ethereum ETF, the new bitcoin ETF has already established itself as a serious challenger for the Grayscale Bitcoin Trust (GBTC), which until this week was the main regulated bitcoin investment vehicle in the US.

Advertisement

According to data from crypto analytics firm Glassnode, the Trust is currently trading at a discount of about 20% relative to the market value of the bitcoin it holds, which suggests that traders are turning away from the once-popular investment vehicle.

The large discount was also pointed out today by Bloomberg’s senior commodity strategist and noted bitcoin bull, Mike McGlone, although he suggested that the Trust still remains a more attractive choice for “buy-and-hold types” than the futures-based ETF is.

Advertisement

However, as mentioned repeatedly by Barry Silbert, founder & CEO of Digital Currency Group, Grayscale’s parent company, the Trust has already applied to the SEC to convert its shares to an ETF. This message was also reiterated by Silbert on Twitter on Tuesday, where he emphasized that it is a spot-based, and not a futures-based, ETF the company is aiming for.

Advertisement

Moreover, as reported by Forbes last month, Grayscale may even be paving the way for ETFs based on other cryptoassets, including bitcoin cash (BCH), ethereum classic (ETC), and litecoin (LTC).

According to the report, three of the company’s other digital asset trusts, namely the Grayscale Bitcoin Cash Trust (BCHG), Grayscale Ethereum Classic Trust (ETCG), and Grayscale Litecoin Trust (LTCN), have been designated as so-called SEC reporting companies.

This means that the trusts will be regulated in a similar manner as publicly traded companies in the US, and be required to file regular disclosures with the SEC. And judging from Forbes’ director of digital asset research, Steven Ehrlich, this could mean that the SEC is warming up to the idea of allowing crypto ETFs that are not backed by CME-traded futures contracts.

Advertisement

“The CME can only offer bitcoin and ether products, at least for now,” Ehrlich wrote, while adding that these other potential ETFs will therefore not face competition from futures-backed ETFs “if the SEC opens the floodgates and they become ETFs in the future.” 

For now, however, SEC’s Gary Gensler has not given any indication that he may be open to allowing “physically” backed spot ETFs for digital assets any time soon. But the crypto community still remains hopeful, and the discussion continues on what will be the next major driver for mainstream adoption of crypto as an asset class.

At 16:50 UTC, ETH traded at USD 4,098 and was up by 8% in a day and 17% in a week. The price rallied by 979% in a year.

Advertisement

News Source

Bitcoin

Bitcoin Senator Rallies For Support Against Powell’s Renomination As Federal Reserve Chair, Here’s Why

Published

on


Popular Bitcoin Senator, Senator Cynthia Lummis is reportedly soliciting for the support of her fellow Republicans in her stance against Jay Powell after the latter got renominated to chair the Federal Reserve.

Bitcoin Senator Wary of Crypto-unfriendly Nominees

As reported by Decrypt who first broke the news, a source in Lummis’ office says her reasons border on her belief that there is an unlawful treatment of crypto-based institutions in her home state, Wyoming.

Meanwhile, the Bitcoin senator is not only against the nomination of Powell. The source still claims that Senator Lummis is also asking her Republican colleagues to help block Leal Brainard’s nomination as well. Brainard is another nominee of President Biden’s for the Fed positions.

Advertisement

Lummis’ skepticism might be as a result of the Special Purpose Depository Institutions or SPDIs as they are otherwise called. They are a new type of crypto-based bank that Wyoming lawmakers granted a special operational license to, just last year.

Two crypto-based companies that received the license in 2020 include Kraken exchange and Avanti — the stablecoin issuer. However, the Federal Reserve’s decision to not approve their applications for central bank-issued accounts has placed a hold on their banking ambitions.

Speaking about the Federal Reserve’s delay in a Wall Street Journal feature article by Lummis on Wednesday, she says it is an intentional and unlawful obstruction. She added that the Fed’s reasons are ambiguous at best. According to the Bitcoin Senator, Lummis claimed that the Wyoming entities have met all requirements for being a bank under the Federal Reserve Act.

Advertisement

Lummis insists that Powell and Brainard are only avoiding their legal obligations in their continued treatment of SPDIs and like many other U.S lawmakers, she wants to know why.

Could Lummis’ Pressure Affect Powell’s Confirmation?

As Lummis continues to apply even more pressure on her colleagues, the possible extent to which this pressure can truly go in affecting the confirmation process of both Powell and Brainard, remains to be seen.

But with the chair of the Senate Banking Committee, Sherrod Brown, reportedly holding a vote on the pair sometime this month, both of them could be confirmed.

Advertisement

Also, there’s a possibility of a potential tight vote now that some progressive Democrats — most notably Elizabeth Warren — are saying they will not be voting for Powell.

News Source

Advertisement
Continue Reading

Bitcoin

PlanB’s Floor Model First Miss: Bitcoin Price Closed Way Below $98K In November

Published

on

PlanB’s floor model was wrong about BTC’s November closing price. The stock-to-flow model, though, is still on track.

Bitcoin’s closing price for November below $60,000 meant that PlanB’s floor model, which was particularly accurate until now, was finally broken.

At the same time, though, the analyst confirmed that the more popular stock-to-flow model was still valid as BTC is on track towards $100,000.

Advertisement

PlanB’s Floor Model Fails

PlanB is among the most popular analysts in the cryptocurrency space, predominantly known for the Bitcoin stock-to-flow model, which he published in early 2019. However, he also posted another model, which he referred to as the “worst-case scenario,” in July this year.

Also known as the floor model, it’s based on technical aspects, such as the 200-day moving average, and saw BTC closing August at $47,000, September at $43,000, and October at $63,000.

The first two months were spot on. BTC closed in October at $61,000, which was still very near to the model’s predicted price, and PlanB said it was “good enough” for him.

Advertisement

However, November’s closing actual closing price of way below $60,000 was quite different from what the model envisioned – $98,000. As such, the analyst admitted that this was the model’s first miss after nailing the previous few months.

S2F on Track

As mentioned above, the floor model works separately from the stock-to-flow model, which sees the stock as the size of existing reserves (or stockpiles) and the flow as the annual supply of new bitcoins to the market.

Advertisement

It’s actually even more bullish as the original version sees bitcoin tapping $100,000 by the end of the year. The upgraded stock-to-flow cross-asset model, which introduced different phases of bitcoin’s development, predicted a price tag of $288,000 until 2024.

Although bitcoin still struggles below $60,000 at the time of this writing, PlanB believes that the original S2F hasn’t been broken as the asset is on its way towards $100,000. If BTC is indeed to go into a six-digit price territory, it would have to increase its USD value by more than 66% in the next 30 days.

News Source

Advertisement
Continue Reading

Bitcoin

CashApp Added Bitcoin Taproot Support, Here’s Why It Is Important

Published

on

CashApp now supports the updated version of Bitcoin

The widely known Cash App mobile payment service developed by Square, which is being used to transfer money with the usage of a mobile app, now fully supports the Bitcoin taproot update.

The mobile payments service is currently available in the U.S. and the U.K. but is still reporting 70 million annual transactions between users and generating $1.8 billion in gross profit.

Advertisement

The taproot upgrade was highly anticipated by the Bitcoin network and the cryptocurrency community in general. Previously, the update went into effect on Nov. 14, 2021, at block 709,632.

Previously, the announcement appeared on the app’s website that has described numerous benefits that users will experience after the implementation of the update. One of the main advantages is increased privacy and reduced transaction fees.

The two-week period has been chosen to confirm the functionality of the updated version of the currency. As for now, the update has been activated for all customers. Taproot-enabled wallets are now available for both receiving and sending.

Advertisement

News Source

Continue Reading