Crypto Chronicle - 10/04/24

Welcome to the 32nd edition of the Crypto Chronicle, brought to you by Imperial Wealth.

You can listen to todays episode here.

News

March Sees Spot Bitcoin ETF Trading Volume Surge to $111 Billion

In March, spot Bitcoin exchange-traded funds (ETFs) witnessed a remarkable surge in trading volume, reaching $111 billion, nearly tripling the volume from February, with Grayscale and BlackRock ETFs leading the market. 

BlackRock’s Bitcoin ETF, IBIT, remained dominant in trading volume, while Grayscale’s GBTC and Fidelity’s FBTC closely followed. 

Bloomberg ETF analyst Eric Balchunas highlighted IBIT’s increasing dominance over GBTC in market share. However, despite profitable hits, IBIT’s lead in volume solidified its position as the “GLD of Bitcoin.” 

On April 1, Farside Investors reported cumulative net outflows of $86 million for spot Bitcoin ETFs, with IBIT experiencing inflows of $165.9 million, overshadowed by Grayscale’s $302.6 million outflows. Additionally, Fidelity’s FBTC saw significant inflows of $44 million on the same day. 

Despite these trends, Grayscale’s GBTC has faced substantial outflows, with assets under management declining by 46% to $22 billion according to Coinglass data.

Read more here: https://imperialwealth.com/news/march-sees-spot-bitcoin-etf-trading-volume-surge-to-111-billion

DOJ Transfers $2 Billion in Seized Silk Road Bitcoin to New Wallet

Around $2 billion worth of Bitcoin, seized by the US authorities from the Silk Road marketplace, was recently moved to a new address. 

Associated with the US Justice Department, the wallet performed a transaction of 0.001 BTC to a Coinbase Prime address before transferring 30,174 BTC to the new location. 

These coins were seized from James Zhong, convicted for his involvement in Silk Road’s illicit activities. In March 2023, US authorities sold approximately 9,861 BTC for $215 million, leaving about 40,000 BTC.

 This transfer coincided with a 7% drop in Bitcoin’s value. 

The Silk Road platform, notorious for illegal trade, led to the imprisonment of its founder, Ross Ulbricht, in 2013. 

The strategy for selling the remaining BTC remains undisclosed.

Read more here: https://imperialwealth.com/news/doj-transfers-2-billion-in-seized-silk-road-bitcoin-to-new-wallet

Morgan Stanley Aims to Outpace UBS in the Race to Become the Premier Bitcoin ETF Provide

The emergence of spot Bitcoin exchange-traded funds (ETFs) in the US has sparked competition among investment banks, with Morgan Stanley aiming to lead ahead of UBS. 

Crypto enthusiast Andrew reported that Morgan Stanley may announce Bitcoin ETF approval soon. 

Eric Balchunas from Bloomberg noted neither Morgan Stanley nor UBS has integrated Bitcoin ETFs yet. 

Both banks seem to wait for the other to act first. Andrew mentioned UBS plans to introduce Bitcoin ETFs between April 8 and April 12. 

This speculation follows reports of Morgan Stanley’s impending approval of Bitcoin ETFs. Despite hurdles, traditional finance (TradFi) appears to embrace Bitcoin.

Read more here: https://imperialwealth.com/news/https-imperialwealth-com-news-morgan-stanley-aims-to-outpace-ubs-in-the-race-to-become-the-premier-bitcoin-etf-provide

Ripple Set to Introduce Stablecoin Tied to US Dollar, Targeting Competition Against USDT and USDC

Ripple plans to introduce a USD-backed stablecoin to compete with Circle and Tether, aiming to tap into the growing market projected to exceed $2 trillion by 2028. 

Chief Technology Officer David Schwartz disclosed the stablecoin’s issuance on the XRP Ledger and Ethereum blockchain, emphasising transparency in asset backing and regulatory compliance, echoing USDC’s approach. 

Schwartz highlighted Ripple’s intention to prioritise market share over risky manoeuvres. 

Auditing of reserve assets will be performed monthly. Leveraging its credibility, Ripple aims to establish a significant presence in the stablecoin sector. 

The stablecoin complements Ripple’s existing offerings, enhancing liquidity and capitalising on market opportunities.

Read more here: https://imperialwealth.com/news/ripple-set-to-introduce-stablecoin-tied-to-us-dollar-targeting-competition-against-usdt-and-usdc

CEO of Australian Monochrome Anticipates the Launch of an Australian Spot Bitcoin ETF Within the Next Two Months

Monochrome, an Australian asset manager, plans to launch its primary spot Bitcoin ETF on Cboe Australia after filing in July 2023. 

If approved, it would be Australia’s first ETF to directly hold Bitcoin. While two existing ETPs on Cboe Australia offer exposure to spot crypto assets, they don’t hold Bitcoin. 

Monochrome gained ASIC approval and expects Cboe to approve its application by June. Initially slated for ASX, Monochrome CEO Jeff Yew believes Cboe aligns better with their goals. 

The move follows the U.S. SEC’s approval of 11 spot BTC ETFs, sparking global interest in similar products.

Read more here: https://imperialwealth.com/news/ceo-of-australian-monochrome-anticipates-the-launch-of-an-australian-spot-bitcoin-etf-within-the-next-two-months

BlackRock Enhances Bitcoin ETF with Addition of Five Wall Street Firms

BlackRock updated its Bitcoin ETF prospectus on April 5, adding five major Wall Street firms as authorized participants. 

These include ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, Goldman Sachs, and UBS Securities. 

The Securities and Exchange Commission’s stance on cash creation and redemption aims to curb market manipulation risks. This mechanism, adopted by BlackRock and others, allows ETF shares to be created or redeemed solely through cash transactions, deviating from the traditional in-kind model. 

The move seeks to prevent intraday price manipulation and aligns with recommendations from industry leaders like Hashdex. 

Despite a surge in March trading volume to $111 billion, some reports suggest cooling demand for Bitcoin ETFs. BlackRock’s iShares Bitcoin Trust remains dominant in both trading volume and assets under management, followed by Grayscale and Fidelity’s funds. As of April 1, BlackRock’s IBIT assets totalled $17.6 billion.

Read more here: https://imperialwealth.com/news/blackrock-enhances-bitcoin-etf-with-addition-of-five-wall-street-firms

SEC Case Finds Terraform Labs and Do Kwon Guilty of Fraud

A jury found Terraform Labs and co-founder Do Kwon liable for defrauding investors in a civil case with the SEC. 

The verdict, announced by SEC Enforcement Director Gurbir Grewal on April 5, held them accountable for deceiving investors about the stability of Terra USD and the platform’s payment application. 

The SEC trial began on March 25, with Kwon absent due to his stay in Montenegro. The jury also found Terraform guilty on six charges, describing its conduct as “reckless.” 

The outcome may impact crypto firms. 

Meanwhile, Kwon’s extradition remains uncertain following a decision by Montenegro’s Supreme Court, facing criminal charges in both the U.S. and South Korea.

Read more here: https://imperialwealth.com/news/sec-case-finds-terraform-labs-and-do-kwon-guilty-of-fraud

In March, Binance’s Trading Volumes Peak for the Year, Reaching $1.12 Trillion

Binance’s spot trading volume surged to its highest level since May 2021, hitting $1.12 trillion in March, with a 121% rise reported by CCData. 

The exchange’s combined market share reached 44.1%, up 1.04% from the previous month. CCData highlighted Binance’s recovery post a $4.3 billion settlement with the US DOJ, noting an 89.7% spike in derivatives trading to $2.91 trillion. 

Binance’s dominance in spot markets increased by 2.3%, reaching 38.0% of spot trading volumes on centralized exchanges (CEXs). 

The overall trading volume on CEXs surged by 92.9% to $9.12 trillion, with cryptocurrency derivatives reaching $6.18 trillion. 

This surge coincided with Bitcoin’s rally towards new all-time highs, reflecting growing investor interest despite regulatory challenges and setbacks faced by exchanges like FTX.

Read more here: https://imperialwealth.com/news/in-march-binances-trading-volumes-peak-for-the-year-reaching-1-12-trillion

Technical Analysis

Last week when the Chronicle was released saw a dump from $69k to $66k with important points stressed.

The main being – that $65k was our most integral line of support until far lower (< $59k).

“In any case, the first level of support that interests me is still the Golden Pocket at $65,000/USD.

Under that comes $59k and then $48-$50k as shown in prior weeks.”

It is that exact structural level we found support/demand and have bounced from just briefly below $65k, and have pumped to as high as almost $73k overnight.

A reminder of this chart here:

And now the updated.

Please see the chart below:

Picture perfect, huh? Pays to do the analysis.

Also pays to have conviction in the TA, whilst understanding that most of the market become scared at support, expect lower, and usually the opposite happens.

As a result, were able to grab two buys in the market last week for the Trading Academy. 

We now seek higher targets for now. A break below $65k would present bearishness, but for now, I have my eyes set on ATHs, $75-$77k and $82k.

Please see the chart below:

Let’s wait and see! For now we are rejecting under the daily candle highs.

I would like to see $69.3k hold for now, but I am expecting higher targets to come, including Fresh All Time Highs.

That $69.3k support is the range golden pocket – and obviously represents our prior 2021 ATH.

If this is a bullish move, if we retrace to that level, I want it to hold – $66-$67k should be support under that if its lost.

Irrespective, as a result of recent bullish movements… Our Day Traders continue to kill it.

Here is an excerpt from our Day Trading Course Discord:

That is the conviction you require against the rest of the market to nail it.

And our students nailed it!

Cryptocurrency Mining

Bitcoin continues to improve its hashrate sitting at 646EH with block rewards sitting at around 6.5 on average leading into the halving.

We are seeing a stabilisation of metrics which is common leading into the halving as people are sitting firm and deployment delays across the industry due to machine manufacturer delays.

We did a small drop in network difficulty which has been welcome.

Around the grounds:

Doge continues to see a drop in hashrate which saw a 14% drop.

Along with LTC doing a smaller 6% drop seeing the Scrypt algo getting some nice rewards. This has seen L7s shoot to above $10,000 for new machines.

Kaspa continues to rise in difficulty and hashrate due to the new KS5 and newer machines from Iceriver etc. Seeing a 5% jump in hashrate.

Dash remains stable with a smaller drop of 4% in network hashrate.

CKB is the standout with a 75% price jump with minimal drop in hash or rise.

That’s it for this weeks edition, stay tuned for next weeks!

Thanks!