The Last Fortnight In Crypto - March (Part 1)
Bitcoin ETFs Surge: $1 Billion Inflows Prompt Analysts' Liquidity Crisis Warnings
The meteoric rise of Bitcoin exchange-traded funds (ETFs) has seen unprecedented daily net inflows surpassing $1 billion, fueling concerns among analysts of an impending liquidity crunch in the Bitcoin market. Despite consistent outflows from the Grayscale Bitcoin Trust (GBTC), other ETFs like BlackRock's iShares Bitcoin Trust (IBIT) and VanEck are witnessing record-breaking inflows. These ETFs have collectively amassed over 800,000 BTC, constituting nearly 4% of the total Bitcoin supply. Analysts fear that sustained demand at this rate could lead to a sell-side liquidity crisis within six months, potentially driving Bitcoin prices even higher. While ETF buying fervor continues, data suggests that Bitcoin exchanges are experiencing stronger outflows than inflows, indicating potential selling pressure. However, mixed signals from Bitcoin miners, who are seeing increased revenues amidst rising prices, further complicate the market outlook. Despite uncertainties, analysts believe the bullish momentum will persist unless ETF inflows decelerate significantly.
Dogwifhat's Vegas Venture: From Meme to Monumental Milestone
The meme coin Dogwifhat, featuring a Shiba Inu adorned with a pink beanie, has surged to become the fourth-largest meme coin in the crypto market, boasting a market capitalization of $2.6 billion. Community members rallied to raise over $690,000 in USDC stablecoin within four days, surpassing the $650,000 target to display the token's mascot on Las Vegas' Sphere entertainment venue. While Dogwifhat's popularity continues to soar amid the crypto bull cycle, some observers caution that such vanity actions often coincide with market peaks. Nevertheless, the fundraising spotlight propelled Dogwifhat's value by 35% in 24 hours, solidifying its position in the meme coin landscape. As meme coins gain traction in the digital asset market, their meteoric rise underscores the heightened risk within the already volatile cryptocurrency space, potentially signaling market frothiness.
UK FCA Greenlights Crypto-Backed ETNs for Institutions, Retail Investors Left Out
The UK's Financial Conduct Authority (FCA) has cleared the path for institutional investors to delve into crypto-backed exchange-traded notes (ETNs), signaling a step towards institutionalization in the cryptocurrency market. These products, which track underlying crypto assets like Bitcoin and Ether, will be available exclusively to professional investors, with retail consumers remaining barred due to their high-risk nature. The FCA emphasizes that crypto assets are volatile and investors should be prepared for potential losses. The London Stock Exchange plans to accept applications for Bitcoin and Ether-backed ETNs in the second quarter of 2024. While institutional interest continues to grow, the FCA maintains its stance on protecting retail investors from the risks associated with crypto-backed ETNs and derivatives.
Crypto Exchange Volume Surges Toward $100 Billion Milestone Amid ETF Excitement
Daily trading volume on centralized cryptocurrency exchanges has soared to levels not seen since late 2021, hitting a seven-day moving average of $97.4 billion on March 6th. This surge follows a trend of rising monthly trading volumes since December 2023, when exchanges surpassed the $1 trillion mark for the first time since late 2022. Binance leads the pack with a 43% market share, followed by UpBit, OKX, and Coinbase. The recent spike in volume coincides with the launch of nine new spot Bitcoin ETFs and the conversion of the Grayscale Bitcoin Trust to an ETF, collectively amassing a net inflow of 170,000 BTC, worth $11.4 billion. As total assets under management for these ETFs surpass $50 billion and cumulative volumes approach the $100 billion mark, Bitcoin's price surged to record highs, briefly surpassing $69,000 before experiencing a slight setback due to a sudden selloff.
SBF Seeks Leniency, Advises Solana Investment from Behind Bars
Former FTX CEO Sam "SBF" Bankman-Fried, facing a maximum of 110 years in prison after being found guilty of fraud and money laundering, has requested a sentencing of five and a quarter to six and a half years. While federal prosecutors are anticipated to submit their recommendations, the Pre-sentence Investigation Report (PSR) suggests a 100-year sentence, a notion dismissed by SBF's legal team as barbaric. They argue that SBF, a first-time offender, was part of conduct involving others and that victims are set to recover fully. Despite being incarcerated since 2023, reports have emerged of SBF offering investment advice, including recommending investments in Solana, to prison guards. Solana, a crypto token, holds significance due to SBF's history with it. The saga unfolds against the backdrop of FTX's collapse in 2022, once valued at $32 billion, with SBF found guilty of mismanagement and fraud involving billions in customer funds.