Crypto Chronicle - 14/11/23

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

You can listen to todays episode here.

News

Nasdaq Filing Confirms BlackRock’s Intentions for Ethereum ETF

BlackRock, the world’s largest asset manager, plans to launch an Ethereum ETF, demonstrating its growing commitment to cryptocurrencies. 

Nasdaq revealed this intention through a filing, with BlackRock aiming to list the ETF on the U.S. exchange, pending regulatory approval. 

The registration of “iShares Ethereum Trust” in Delaware further signals BlackRock’s ETF involvement. The company’s prior interest in a Bitcoin ETF, seen as a tool to enhance crypto accessibility for average investors, has generated industry attention. 

Meanwhile, at least five firms, including VanEck, ARK 21Shares, Invesco, Grayscale, and Hashdex, vie for SEC approval for an Ethereum ETF. Ethereum’s value has risen to $2.1k.

Read more here: https://imperialwealth.com/news/nasdaq-filing-confirms-blackrocks-intentions-for-ethereum-etf 

BlackRock Contends SEC Lacks Basis for Distinguishing Between Crypto Futures and Spot ETFs

BlackRock challenges the SEC’s reliance on the 1940 Act for crypto futures ETFs, asserting its irrelevance to both crypto-spot and futures ETFs. 

With the confirmation of BlackRock’s spot-Ether ETF, it questions the SEC’s denial of spot-crypto ETFs, arguing the agency’s distinctions are regulatory missteps. 

While the SEC prioritises the 1940 Act for futures ETFs, BlackRock emphasises its restrictions on ETFs, not underlying assets. 

The firm contends that CME surveillance, approved by the SEC, detects fraud in the spot market, leaving no valid reason for rejection.

Analysts predict a 90% chance of SEC approving a spot crypto ETF by January 10.

Read more here: https://imperialwealth.com/news/blackrock-contends-sec-lacks-basis-for-distinguishing-between-crypto-futures-and-spot-etfs 

XRP Pumps and Dumps off the Back of Fake BlackRock ETF XRP Listing

A fraudulent BlackRock filing hinting at an XRP exchange-traded product caused a swift 12% surge in XRP, reaching $0.73 within 30 minutes. 

The gains were short-lived as Bloomberg ETF analyst Eric Balchunas, confirming the filing as fake with BlackRock, led to a rapid reversal. 

Balchunas speculated on impersonation in adding the XRP trust to the Delaware list. Bitcoin Magazine’s Dylan LeClair and The Block initially reported the news. 

Despite the incident, BlackRock’s genuine spot Ether ETF filing on November 9 was confirmed via a 19b-4 submission by Nasdaq to the Securities and Exchange Commission.

Read more here: https://imperialwealth.com/news/xrp-pumps-and-dumps-off-the-back-of-fake-blackrock-etf-xrp-listing 

Institutional Bitcoin Inflows Surpass $1 Billion in 2023 Amidst Tightening BTC Supply

Cryptocurrencies, including Bitcoin and altcoins, have seen substantial inflows this year, fuelling considerations about a potential Bitcoin supply shortage, especially with upcoming ETF approvals and the halving event. 

Digital asset investment products reported a $293 million inflow last week, marking seven consecutive weeks of positive flows. 

CoinShares’ data indicates year-to-date crypto exchange-traded product flows at $1.14 billion. 

Ethereum also experienced significant inflows. Solana attracted $12 million in a week, leading to a year-to-date total of $121 million. 

Glassnode’s analysis reveals Bitcoin storage surpassing mining by 2.4 times amid renewed interest, while on-chain analytics point to increasing wallet entities.

Read more here: https://imperialwealth.com/news/institutional-bitcoin-inflows-surpass-1-billion-in-2023-amidst-tightening-btc-supply 

Bitcoin Miners Set Annual All-Time High with Daily Earnings of $44 Million

On November 12, Bitcoin miners achieved an annual record, earning over $44 million in combined block rewards and transaction fees. 

The revenue comes from validating transactions and creating new blocks through advanced mining rigs, with miners receiving 6.25 BTC and transaction fees per successful block. 

This surpassed daily earnings in 2023, marking the highest figure since April 2022. Between April 2022 and November 2023, global Bitcoin miners faced a revenue decline due to a bear market, negative sentiment, and regulatory challenges. 

However, 2023 saw a reversal, driven by rising market prices and increased public interest. 

Countries like Bhutan actively engage in Bitcoin mining using hydropower, exploring partnerships to expand operations.

Read more here: https://imperialwealth.com/news/bitcoin-miners-set-annual-all-time-high-with-daily-earnings-of-44-million 

CBOE Set to Introduce Margin Futures Trading for BTC and ETH in January with Support from 11 Firms

Cboe Digital is set to launch BTC and Ether margin futures trading on January 11, 2024, marking a U.S. first by offering both spot and leveraged derivatives trading on a single platform. 

The move aligns with a growing interest in cryptocurrency financial products in the United States. John Palmer, Cboe Digital’s President, anticipates that derivatives will enhance liquidity and hedging opportunities in the crypto market.

The platform, approved by the U.S. Commodity Futures Trading Commission, plans to expand into physically delivered products. 

Meanwhile, BTC futures open interest is surging on the Chicago Mercantile Exchange, competing with Cboe Digital. 

The industry awaits the SEC’s decision on 12 spot BTC ETF applications.

Read more here: https://imperialwealth.com/news/cboe-set-to-introduce-margin-futures-trading-for-btc-and-eth-in-january-with-support-from-11-firms 

JPMorgan Introduces Programmable Payments on its Institutional Blockchain Platform with JPM Coin 

JPMorgan has introduced programmable payments on its blockchain platform, JPM Coin, for institutional users. 

Naveen Mallela, head of JPMorgan’s Onyx blockchain platform, described it as a significant milestone, considering it the “holy grail” for their blockchain. 

Siemens AG is the first institutional client to utilise this feature, emphasising its use for automation and data-driven digital business models. 

The offering, deemed a “first-of-its-kind” by a global commercial bank, enables users to program payments through an “If-This-Then-That” interface. 

JPMorgan is also working on a separate blockchain solution for cross-border transactions, awaiting regulatory approval in the United States.

Read more here: https://imperialwealth.com/news/jpmorgan-introduces-programmable-payments-on-its-institutional-blockchain-platform-with-jpm-coin 

Sam Bankman-Fried Convicted on All Seven Charges in FTX Fraud Case

Following a five-week trial in New York, Sam Bankman-Fried, the founder and former CEO of FTX, has been found guilty on charges including wire fraud, wire fraud conspiracy, securities fraud, commodities fraud conspiracy, and money laundering conspiracy.

New York District Judge Lewis Kaplan will schedule his sentencing, with a potential maximum prison term of 110 years.

Key FTX executives, including Caroline Ellison, Gary Wang, and Nishad Singh, have already pleaded guilty and testified against Bankman-Fried.

He initially pleaded not guilty, claiming innocence and attributing FTX’s 2022 collapse to “big mistakes.”

A CoinDesk article revealing FTX’s substantial token holdings by Alameda triggered the downfall.

Read more here: https://imperialwealth.com/news/sam-bankman-fried-convicted-on-all-seven-charges-in-ftx-fraud-case

Technical Analysis

What a few weeks it’s been.

The last time we touched base on the Podcast & Chronicle, we were priced at $34,400, with current pricing as of writing at $36,400, with much movement in between, but generally up only!

A number of bearish levels have been invalidated on this move.

The first, being the pivot Golden Pocket from our April ’22 high to our November low, with confluence of an ascending parallel channel. This is broken.

Please see the chart below:

Additionally, pulling the Fib from ATH, to our Nov ’22 low, we have seemingly flipped the major upside .382 resistance to support for now as well, slicing through it.

Please see the chart below:

So it’s fantastic to see us reclaiming these super important Fibonacci levels.

What is fuelling this further, is our HTF bullish scenarios and indicators continuing to play out.

Firstly, our Bullish Market Structure remains in tact, and looks very strong on both a relative scale, and log scale.

Please see the relative scale below:

Please see the log chart below:

Additionally, our SMAs (50, 100, 200) still remain under us as support.

Please see the chart below:

And of course, we have a handy weekly inverse H&S still playing out.

Please see the chart below:

This move has been awesome!

Hopefully it continues – but corrections are expected and BTC is currently underdoing one.

We may bounce from here – we may put in our next HL under us, I would like to see this land between $30-$34k ideally, if there is a deep retracement/sell off.

Shake out the jeets, and upwards we go again! (Hopefully!)

Cryptocurrency Mining

From Taylor our Miner Expert:

Bitcoin showing some good strength in transaction fees which is giving miners some really solid margins. Currently block rewards are at 0.8-1 BTC per block additional, which is really positive being post weekend and usually speaking the weekend lowers the transactions, in this case it’s great to see the fees carried through. Last week we saw blocks with 2 BTC extra. 

Hashrate is sitting tight around the 460 EH range. But is fluctuating between 380-500eh. 

Difficulty pushed up 3.5% over the last few days but due to the low hashrate right now we are seeing projections of a drop in difficulty by 7% so let’s keep our fingers crossed for that! 

S19ks are doing really well for our clients due to the low efficiency, these have been the hottest thing on the market being low purchase prices compared to new S21s being a few months off and being double the price even for a pre order.

Other Networks:

Scrypt for LTC and Doge having a good week with a combined 5% drop in difficulty but a nice stable price action. Current L7 9.5gh profit sitting at $11 Per day hosted. 

Nervos sitting at a 28% reduction due to the incoming halving, this is not surprising as majority of old machines will very much struggle. The K7s being new tech will do well, currently profiting around $14 per day hosted. 

Dash has had a huge uptick with 25% rise in difficulty, most likely due to CKB and the cheaper hardware prices. The hashrate also dropped massively over the past few months so was always going to come back. Currently D9s are doing $14 profit per day which is still handsome. 

Kadena is quite stable with a 2% rise in difficulty and not much price movement. Hosted KSA3s are doing around $9-10 profit per day. 

Kaspa is still doing its thing with difficulty rising by 8% but price action doing a 30% rise. Currently KS3 9.4th models are producing $290 profit per day hosted.

If you wish to speak to Taylor on any of these machines, feel free to book a free online consultation here!

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

Thanks!