Crypto Chronicle - 06/06/24

Welcome to the 39th edition of the Crypto Chronicle, brought to you by Imperial Wealth.

News

Spot Ethereum ETFs Officially Approved by the SEC

The US SEC’s recent approval marks a significant milestone for spot Ether ETFs. On May 23, the SEC greenlit 19b-4 filings from various asset managers, enabling the listing and trading of spot Ether ETFs. 

Despite ongoing speculation about Ether’s security classification, the SEC’s decision signals progress. However, ETF issuers must await SEC approval for their S-1 registration statements, a process that could span from days to months. 

Notably, Hashdex’s application awaits decision, while industry analysts anticipate further developments. 

Additionally, the approval coincides with the US House of Representatives’ vote in favour of the Financial Innovation and Technology for the 21st Century Act, aimed at providing regulatory clarity for the cryptocurrency industry. 

This approval follows the SEC’s landmark decision in January to approve spot Bitcoin ETF applications, demonstrating continued industry evolution.

Read more here: https://imperialwealth.com/news/spot-ethereum-etfs-officially-approved-by-the-sec

Spot ETH ETFs May Attract 25% of the Demand Seen by Their BTC Counterparts, say Bloomberg analysts

Bloomberg ETF analyst James Seyffart believes spot Ethereum ETFs might attract 20% to 25% of the demand seen by spot Bitcoin ETFs, while his colleague Eric Balchunas predicts 15% to 20%. 

Seyffart attributes this lower demand to the lack of staking opportunities and Ethereum’s greater on-chain utility. He also noted that Ethereum futures ETFs are not a reliable benchmark due to their limited assets compared to Bitcoin futures ETFs. 

Despite these limitations, Seyffart expects significant, though smaller, launches for spot ETH ETFs. ‘

Conversely, Bitwise CIO Matt Hougan forecasts substantial demand, driven by diversification strategies and Ethereum’s appeal as a high-growth tech investment.

Read more here: https://imperialwealth.com/news/spot-eth-etfs-may-attract-25-of-the-demand-seen-by-their-btc-counterparts-say-bloomberg-analysts

Bitcoin Exchange-Traded Funds Now Hold More Than 1 Million BTC

Bitcoin exchange-traded funds (ETFs), designed to track Bitcoin’s price or provide exposure to it, have collectively accumulated over 1 million BTC worldwide. 

Since mid-January, 11 U.S. spot Bitcoin ETFs have amassed 855,619 BTC, averaging 6,200 BTC per day. 

Data from HODL15Capital indicates that an additional 21 Bitcoin ETPs in countries like Canada, Germany, and Brazil have brought the total to 1,002,343 BTC, valued at about $68 billion, representing 5.08% of the circulating supply. 

Grayscale’s GBTC holds 289,040 BTC, but BlackRock’s IBIT, with 287,168 BTC, is close to surpassing it. 

The rise of ETFs has coincided with stagnant growth in self-custodied Bitcoin.

Read more here: https://imperialwealth.com/news/bitcoin-exchange-traded-funds-now-hold-more-than-1-million-btc

BlackRock’s IBIT Becomes the World’s Largest Bitcoin ETF, Surpassing GBTC

BlackRock’s spot Bitcoin ETF has reportedly surpassed the Grayscale Bitcoin Trust (GBTC) as the largest Bitcoin price-tracking ETF globally. 

By 28 May, BlackRock’s iShares Bitcoin Trust (IBIT) saw $102.5 million in inflows, while GBTC had $105 million in outflows. 

This increased IBIT’s holdings to 288,670 Bitcoin, overtaking GBTC’s 287,450 Bitcoin. Initially, GBTC held 620,000 Bitcoin in January. 

A Bloomberg report on 29 May stated that IBIT held $19.68 billion in Bitcoin, compared to GBTC’s $19.65 billion, with Fidelity’s ETF trailing at $11.1 billion. 

BlackRock’s ETF has dominated inflows since its launch. Additionally, BlackRock’s funds invested $4.04 million in IBIT in Q1. 

Globally, spot Bitcoin ETFs now hold over one million Bitcoin, worth over $68 billion, or 5.10% of the circulating supply. 

Analysts expect spot Ether ETFs to launch by mid-June, pending S-1 approval.

Read more here: https://imperialwealth.com/news/blackrocks-ibit-becomes-the-worlds-largest-bitcoin-etf-surpassing-gbtc

Australia’s Inaugural Bitcoin ETF Begins Trading

The Monochrome Bitcoin ETF, set to be Australia’s first spot Bitcoin ETF, starts trading today, directly holding Bitcoin and marking a major milestone in the country’s financial landscape. 

Monochrome Asset Management, which received approval under new Australian Financial Services (AFS) licensing rules, offers this ETF (ticker: IBTC) with a 0.98% management fee. 

The ETF will track the CME CF Bitcoin Reference Rate index and be listed on Cboe, outpacing the Australian Securities Exchange (ASX), which plans to approve spot Bitcoin ETFs by year’s end. 

The launch reflects growing global acceptance of Bitcoin as an institutional asset, following similar ETF introductions in North America, Europe, and the Asia-Pacific.

Read more here: https://imperialwealth.com/news/australias-inaugural-bitcoin-etf-begins-trading 

South Korea Faces Calls to Embrace Crypto ETFs Following Actions in US and Hong Kong

The SEC’s approval of Ethereum ETFs has spurred global competition, urging South Korean regulators to reconsider their cautious stance on digital assets. 

While Seoul may re-evaluate, the FSC and FSS remain hesitant. Unlike the US, which embraced Bitcoin and Ethereum ETFs, South Korea is cautious, citing potential disruptions to the financial system. 

Critics call for regulatory reforms, arguing that current regulations are outdated. Jung Eui-jung warns that failure to act could weaken Korea’s financial position globally, potentially driving investors towards the US market. 

Australia is also poised to launch its first Spot Bitcoin ETF, awaiting regulatory approval.

Read more here: https://imperialwealth.com/news/south-korea-faces-calls-to-embrace-crypto-etfs-following-actions-in-us-and-hong-kong 

US President Joe Biden Vetoes Repeal of SAB 121

President Joe Biden has vetoed a resolution to overturn the SEC’s Staff Accounting Bulletin No. 121, drawing criticism from the cryptocurrency sector. 

The Blockchain Association expressed disappointment, highlighting bipartisan opposition in Congress. Biden defended his decision, stating it preserves the SEC’s authority and protects consumers and investors. 

The guidelines, set to take effect on April 11, require institutions holding crypto assets to record them as liabilities. 

The House voted 228-182 and the Senate 60-38 to repeal the guidelines. 

The crypto community criticised the decision on social media, arguing it stifles innovation and hinders the industry’s growth.

Read more here: https://imperialwealth.com/news/us-president-joe-biden-vetoes-repeal-of-sab-121

Trump Asserts ‘Our Country Must be the Leader in the (Crypto) Field’ Ahead of Address to Libertarians

Over the weekend, Donald J. Trump reiterated his support for cryptocurrency, expressing optimism and openness towards the industry on social media. 

Emphasising the need for the U.S. to lead in the crypto field, Trump criticised Joe Biden for allegedly wanting crypto to fail.

Trump’s active courting of pro-crypto voters has warmed Washington’s stance on the issue. He made pro-crypto comments at a Mar-a-Lago dinner and began accepting crypto donations, making him the first major party candidate to do so. 

In response, the Biden administration and the SEC have softened their opposition, with the SEC approving key filings for ether ETFs, a significant shift from a month ago.

Read more here: https://imperialwealth.com/news/trump-asserts-our-country-must-be-the-leader-in-the-crypto-field-ahead-of-address-to-libertarians

Donald Trump Vows to Free Ross Ulbricht, Oppose CBDCs, and Back Self Custody in Libertarian Convention Speech

Donald Trump’s speech at the Libertarian Party’s convention saw a mix of boos and cheers, especially when he mentioned appointing Libertarians to cabinet posts. 

However, his pledge to support the crypto industry and commute Ross Ulbricht’s sentence garnered significant approval. 

His remarks on crypto highlight opposition to the current administration and signify a shift from his earlier scepticism, as evidenced by his campaign’s acceptance of crypto donations. 

Trump’s efforts indicate a strong bid to court support from the crypto community, constituting over 20% of the electorate.

Read more here: https://imperialwealth.com/news/donald-trump-vows-to-free-ross-ulbricht-oppose-cbdcs-and-back-self-custody-in-libertarian-convention-speech

Biden Campaign Intensifies Crypto Industry Outreach with Unexpected Tone Shift

President Joe Biden’s re-election campaign has reached out to key figures in the cryptocurrency sector, seeking insights on crypto policy, signalling a significant shift from previous dismissals of the industry. 

This engagement began two weeks ago as Biden’s team acknowledges the potential impact of crypto-related issues on a tightly contested presidential race.

The outreach includes calls to industry leaders previously rebuffed by the administration. 

This new approach comes after crypto advocates opposed the Biden administration’s stance on SAB 121 and coincides with the Trump campaign’s acceptance of cryptocurrency donations and pro-crypto statements. 

Both campaigns are now showing more favourable views on digital assets.

Read more here: https://imperialwealth.com/news/biden-campaign-intensifies-crypto-industry-outreach-with-unexpected-tone-shift

ROBERT KENNEDY JNR at Consensus:

His views on Trump’s recent pro-crypto position

“I’m happy about that. I think it’s a good thing for our country. Commitment to crypto is a commitment to freedom and transparency. I’m not going to question if it was a political decision. I’m happy he did it, and I hope President Biden does, too.”

The major challenges in U.S. crypto regulation

“I think transactional freedom is one. We need sovereignty over our own wallets, transactional freedom and a currency that is transparent. We need to make sure America remains the hub of blockchain technology. I’m going to make sure cryptocurrency is regulated in a way that protects the consumer from deceptive schemes. I purchased 21 bitcoins since I started this campaign. I also bought three coins for each of my kids.”

Prospects for cryptocurrency enthusiasts

“My objective if elected president is that crypto is a transactional currency. That people can have transactional freedom. That people have a choice as to whether they can buy it. I think it should be treated as a currency; we shouldn’t be taxing it as capital gains. I think there are issues in how we do that. I believe that it should be a currency used to purchase things like apples, lunches and coffee and that people can do that.”

His motivation for pursuing the presidency

“I toyed with getting into politics when I was younger. For two decades I took that off the plate. I saw what happened during Covid and when the government shut down the economy. I thought it was wrong. The government shut down every church, attacked the 5th amendment, shut down business without due process … they shut down jury trials, they violated prohibitions and I saw this attack on the constitution and censorship, not just to me but so many people who were trying to talk. I saw that and it seemed so unethical to my country. All these traditional values for my party and my country were disappearing, and I felt I could play a unique role in showing people what America’s supposed to look like.”

Mastercard Launches P2P Crypto Credentials Pilot Program

Mastercard has launched its crypto credentials P2P pilot program to simplify crypto transactions and minimise user errors. 

The initiative involves partners such as Bit2Me, Lirium, Mercado, and FoxBit. Walter Pimenta, Mastercard’s VP for Latin America, emphasised the importance of trusted interactions in blockchain and digital assets. 

The program uses human-readable aliases verified by Mastercard, eliminating the need for complex wallet addresses and pre-screening transactions to prevent errors. 

While the effort aims to address the challenges of complex interfaces and potential financial loss, concerns about centralisation and data security persist due to Mastercard’s role and its history of data breaches.

Read more here: https://imperialwealth.com/news/mastercard-launches-p2p-crypto-credentials-pilot-program

Fantom Introduces Sonic Foundation for Sonic Chain Launch

The Fantom Foundation has established a new foundation to support the upcoming launch of the Sonic chain. CEO Michael Kong shared the news on May 23, expressing enthusiasm for Sonic’s potential impact on various DeFi and real-world applications. 

The Sonic Foundation will oversee governance, treasury management, partnerships, and ecosystem development. Sonic will feature a layer-1 solution and integrated layer 2, linking the EVM-compatible network to Ethereum. 

Users will access Ethereum’s resources via Sonic’s architecture. Fantom’s consensus model, Lachesis, diverges from traditional blockchains, enabling validators to validate event blocks independently. 

This mechanism achieves consensus without sequential validation, with block finality in 1-2 seconds.

Read more here: https://imperialwealth.com/news/fantom-introduces-sonic-foundation-for-sonic-chain-launch

Dogecoin Crypto Icon Kabosu, the DOGE Meme Dog, Dies at 18 Years of Age

Kabosu, the beloved Shiba Inu behind the iconic “Doge” meme and Dogecoin, passed away peacefully at 18, as announced by owner Atsuko Sato. 

A farewell gathering for “Kabo-chan” was arranged, evoking condolences and tributes from the crypto community. Kabosu’s legacy as a symbol of crypto culture and Dogecoin’s spirit lives on, inspiring meme enthusiasts worldwide. 

Initially gaining fame in 2010, Kabosu’s viral image sparked the “Doge” meme phenomenon, leading to the creation of Dogecoin in 2013. Despite its humorous origins, Dogecoin evolved into a significant cryptocurrency, supporting various charitable causes. 

Kabosu’s influence transcends memes, impacting even political campaigns, reflecting her enduring significance.

Read more here: https://imperialwealth.com/news/dogecoin-crypto-icon-kabosu-the-doge-meme-dog-dies-at-18-years-of-age

Technical Analysis

Price continues to maintain an uptrend from our recent lows, holding onto our main trendline and range POC as discussed in the podcast.

Please see the chart below:

As a result, we are still firm on higher prices coming in the next few months with all high time frame charts maintaining strength and validation.

Please see the chart below:

Monthly S/R flip looks beautiful doesn’t it.

As does our Bullish Market Structure.

Please see the chart below:

Hopefully we can continue to maintain strength BTC, but market wide!

Cryptocurrency Mining

Bitcoin mining continues to trend sideways with stable rewards post halving, no major rises in difficulty or hashrate, seen a small drop off from the halving which has continued.

The current outlook is a 1% jump in difficulty past fortnight and the coming 48hours should be a similar or slightly less rise. This is continued form the up and down hashrate from unprofitable miners being on and off.

We are also seeing a hold out of new stock coming out due to production stalls so this could also be attributed to this as well as the S21 pro still being a few months away from public release.

The alt coin mining side is also in a similar phase as we wait for new hardware and a rise in Alt prices. There will be a wave of new KAS machines as the KS5 machines hit the hashrate as well as some new L9 LTC and DOGE miners in the new 2-3 months. Beyond this most new machines for Alts wont be for another 6-8 months.

Any miners interest you or you want to begin earning passive income via BTC, feel free to book a free online consultation here!