Here are some of the major developments in the world of crypto over the past few days.
BlackRock's Bitcoin exchange-traded fund (ETF) has surpassed MicroStrategy's holdings of the cryptocurrency, according to data from BitMEX. BlackRock's ETF, known as IBIT, now holds nearly 198,000 BTC, valued at over $13.5 billion as of March 8. This development comes after the U.S. Securities and Exchange Commission approved nine new funds on January 10, reflecting growing institutional interest in Bitcoin.
Excluding Grayscale's GBTC, the total assets held by the newly launched Bitcoin ETFs amount to $28 billion, underscoring the increasing institutional demand driving Bitcoin's price upward. On March 8, Bitcoin surpassed the $70,000 mark for the first time. Reports suggest that over-the-counter (OTC) trading platforms are experiencing a shortage of Bitcoin and are turning to public exchanges to fulfill orders, particularly for large-volume traders such as institutional investors.
While not an ETF issuer, MicroStrategy has amassed a portfolio of 193,000 BTC as part of its corporate treasury strategy. The software company employs a leveraged operating strategy, using debt to finance operations and investments. MicroStrategy recently announced plans for a debt offering to raise over $600 million to bolster its Bitcoin reserves, reaffirming its commitment to its Bitcoin-centric strategy. CEO Michael Saylor has expressed his unwavering belief in Bitcoin, stating that he has no plans to sell the company's Bitcoin reserves and views Bitcoin as the ultimate exit strategy. Saylor believes that Bitcoin is technically superior to traditional assets like gold, the S&P 500, and real estate, and sees no reason to sell Bitcoin in favor of these assets.
Grayscale and Coinbase recently engaged with the SEC to discuss converting Grayscale’s Ethereum Trust into a spot Ether exchange-traded fund (ETF). The meeting, held on March 6, aimed to address concerns about potential market manipulation if the fund were to be approved. Coinbase presented arguments suggesting that Ether, like Bitcoin, has mechanisms that significantly limit susceptibility to fraud and manipulation, similar to the reasoning behind Bitcoin ETF approvals.
Coinbase also highlighted its surveillance-sharing agreement with the Chicago Mercantile Exchange (CME), which was implemented for Bitcoin ETFs at the SEC's request to enhance trading monitoring. The correlation between Ether futures and spot markets was emphasized, drawing parallels with the Bitcoin market. Grayscale is proposing a second ETF for Ether futures trading, with the main difference between spot and futures markets being the immediate trading of spot market assets compared to contracts for future transactions in the futures market.
Several asset managers, including Invesco, Galaxy Digital, Fidelity, Franklin Templeton, and BlackRock, are seeking approval for a spot Ether ETF. Final SEC decisions are anticipated in May, with some analysts suggesting that Grayscale might be using its futures ETF application as a strategy to encourage approval for its spot Ether ETF. Despite these developments, there remains uncertainty among asset managers about regulators’ views on crypto investment vehicles.
The departure of Binance from Nigeria has set off a wave of concerns and potential opportunities within the nation's cryptocurrency community. Local figures, like Nathaniel Luz, are anticipating the rise of new crypto exchanges that will step in to fill the void left by Binance's exit. Nevertheless, the current prohibition on Binance's naira operations has sparked distress among local cryptocurrency stakeholders, who fear its repercussions on the livelihoods of many Nigerians and the possible escalation of youth unemployment in the country.
Nathaniel Luz, the CEO of Flincap, noted that several Nigerian traders who relied on Binance for peer-to-peer trading are now grappling with the consequences. Despite the ban, some traders have sought refuge in alternative platforms, such as WhatsApp and Telegram groups, for their transactions. The ongoing ambiguity surrounding cryptocurrency regulation in Nigeria, coupled with the decision to halt Binance operations, has raised doubts about the confidence levels within the Nigerian crypto space. Oladotun Wilfred Akangbe, Chief Marketing Officer of Flincap, expressed concerns that these developments could lead to widespread fear, uncertainty, and doubt among Nigeria's crypto enthusiasts.
Binance's recent statement regarding the automatic conversion of naira balances to Tether (USDT) and the discontinuation of naira deposits has further added to the uncertainty. The Central Bank of Nigeria has raised suspicions about illicit transactions on crypto exchanges, including Binance, prompting increased regulatory scrutiny. Despite these challenges, there remains a sense of optimism within Nigeria's crypto community, with hopes that new opportunities will arise and new exchanges will emerge to cater to the market's needs.