On January 12, the Grayscale Bitcoin Trust (GBTC) executed a transfer of 894 Bitcoins (approximately $41 million at the time) to a Coinbase Prime deposit wallet, as reported by blockchain analytics platform Arkham Intelligence. This move coincided with the trust's initiation of authorized participant redemptions the day before. While some X (formerly Twitter) accounts speculated that these GBTC redemptions might have triggered the Bitcoin price downturn, Arkham's data indicates relatively small outflows, with only $41 million sent to Coinbase and an additional $119 million to wallets with no previous history.
Despite GBTC being considered one of the world's largest single holders of Bitcoin, recent data from Arkham estimates its holdings at $27 billion, reflecting the cryptocurrency's price surge in recent months. GBTC shares, traded since 2013, became redeemable for Bitcoin on January 11. However, due to their historical irredeemability, these shares often traded at a discount to their net asset value. On January 12, the same day multiple Bitcoin ETFs began trading, Arkham Intelligence observed the trust's transaction of 894 BTC to Coinbase, constituting 0.15% of its total holdings, and an additional 2,607 BTC to other wallets. While some X users theorized that GBTC redemptions triggered the Bitcoin price decline, Arkham's data indicates relatively minor outflows, prompting discussions about the potential impact of these developments on the broader cryptocurrency market.
Vanguard among MicroStrategy’s largest shareholders, indirectly exposed to Bitcoin
As of September 2023, Vanguard Group Inc. stands as the second-largest institutional shareholder in MicroStrategy (MSTR), holding an 8.24% stake in the company. Although Vanguard has not signaled intentions to introduce Bitcoin exchange-traded funds (ETFs) on its platform, it indirectly maintains exposure to the cryptocurrency through its substantial ownership and management of over 1,126 million MSTR shares. MicroStrategy, recognized for its substantial Bitcoin holdings amounting to 189,150 BTC with a combined purchase price of approximately $5.9 billion, has seen its stock labeled by analysts as resembling a "leveraged Bitcoin ETF" due to the heightened interest in Bitcoin ETFs in 2023.
Vanguard's distancing from the cryptocurrency market was evident on January 11, as other asset managers launched spot Bitcoin ETFs on major Wall Street exchanges. Vanguard, in contrast, blocked the purchase of such products, emphasizing that they do not align with its strategic focus on asset classes like equities, bonds, and cash. Despite this, Vanguard's significant indirect exposure to Bitcoin through its holdings in MicroStrategy implies that movements in BTC prices can impact its mutual funds and MSTR shareholdings. While Vanguard maintains a cautious stance, this exposure provides an avenue for its clients to indirectly engage with cryptocurrency through the investment platform. The ongoing trend in the crypto industry suggests a surge in Bitcoin-related products in the near future, including leveraged and short Bitcoin ETFs, as well as crypto loans collateralized by Bitcoin.
Do Kwon request to postpone the SEC trial date, while in extradition custody
Do Kwon, co-founder of Terraform Labs, has formally requested a delay in his trial date at the United States District Court for the Southern District of New York until March. Kwon's legal team highlighted the ongoing extradition challenges he faces in Montenegro as the primary reason for seeking the postponement. In a letter to Judge Jed Rakoff dated January 11, the team expressed Kwon's desire to attend the trial personally, originally scheduled for January 29. The legal team had anticipated a swifter resolution to the extradition proceedings in Montenegro, which has yet to materialize.
The Securities and Exchange Commission (SEC) had filed fraud charges against Kwon in February 2023, accusing him of involvement in a multibillion-dollar crypto securities fraud linked to the collapse of Terraform Labs' stablecoin TerraUSD (USTC) and its associated Terra (LUNA) token. Despite recognizing the urgency of the trial, Kwon's legal representatives argued that the current trial date in January would be impractical for him to attend. The letter proposed an adjournment until mid-March, allowing a more realistic opportunity for Kwon to participate. The extradition proceedings in Montenegro have faced delays, and recent legal developments, including the annulment of the extradition approval, add complexity to Kwon's situation, as both the U.S. and South Korea seek his extradition amid speculation about potential multiple sentences in both countries.
