Author

muhammed

Muhammed is a passionate crypto blogger, tech enthusiast, and skilled software engineer who has established himself as a significant voice in the cryptocurrency and blockchain community. Muhammed’s fascination with technology and coding began at an early age. His parents, both techies, encouraged his curiosity, providing him with the tools and resources to explore the digital world. Muhammed’s academic journey laid a strong foundation for his career. He pursued a Bachelor's degree in Computer Science. During his time there, Muhammed immersed himself in various aspects of software development, cybersecurity, and cryptographic algorithms. He developed a project with friends, a decentralized application (DApp) for secure data sharing, received widespread acclaim and sparked his deep interest in blockchain technology and preventing digital censorship. After graduating, Muhammed worked as a software engineer for several leading tech companies, where he gained hands-on experience in developing scalable software solutions and working with cutting-edge technologies. His professional journey took a pivotal turn when he discovered Bitcoin and blockchain technology. Fascinated by the potential of decentralized systems to revolutionize finance and various other industries, Muhammed began to delve deeper into the world of cryptocurrencies. Combining his technical expertise with his growing passion for blockchain, Muhammed launched his blog and telegram channel where he shared his knowledge and insights on the latest trends, technologies, and market movements in the cryptocurrency space. His blog quickly gained traction, attracting a diverse audience ranging from tech-savvy developers to novice investors. Muhammed’s ability to break down complex technical concepts into easily understandable content has made his blog a go-to resource for many. In addition to blogging, Muhammed actively contributes to open-source projects, where he collaborates with other developers to improve the security and functionality of various platforms. His contributions have earned him recognition in the developer community, and he frequently participates in hackathons and tech meetups, sharing his expertise and learning from peers. Muhammed’s dedication to educating others about cryptocurrency extends beyond his blog. He has written articles for prominent tech and financial publications. His pieces often explore the practical applications of blockchain technology, the future of decentralized finance (DeFi), the evolving regulatory landscape and digital privacy and online censorship. What sets Muhammed apart is his relentless curiosity and his commitment to continuous learning. He believes that blockchain technology is still in its early stages and that its full potential is yet to be realized. This belief drives him to stay at the forefront of technological advancements and to share his knowledge with the broader community. Outside of his professional endeavors, Muhammed is an avid gamer and enjoys exploring the latest in gaming technology and virtual reality. He is fluent in Turkish, Arabic and English. His blend of technical expertise, passion for blockchain, and dedication to education make him a unique and influential figure in the crypto community, inspiring many to explore the transformative potential of decentralized technologies.

Bitcoin

Ferrari Expands Cryptocurrency Payments to Europe: What You Need to Know

by muhammed July 24, 2024

written by muhammed 5 minutes read

Ferrari Extends Cryptocurrency Payments to Europe After US Launch

Introduction

Ferrari announced on Wednesday that it would expand its cryptocurrency payment system to Europe. This follows the successful launch of the system in the United States last year. Starting at the end of this month, European dealers will begin accepting payments in cryptocurrency for Ferrari’s luxury sports cars. The Italian company plans to extend this scheme to other international dealers by the end of 2024, provided cryptocurrencies are legally accepted in those countries.

Expanding to Europe

Ferrari’s decision to expand its cryptocurrency payment system to Europe comes after a successful run in the United States. The company aims to support its European dealers in better addressing the evolving needs of their wealthy customers. According to Ferrari, most of its dealers in Europe have either already adopted the new payment system or are in the process of doing so.

The US Launch

Ferrari started accepting cryptocurrency payments in the United States last year. Despite the volatility of cryptocurrencies like Bitcoin and Ether, Ferrari responded to requests from its wealthy customers who preferred using digital currencies. For this launch, Ferrari partnered with BitPay, one of the biggest cryptocurrency payment processors. BitPay facilitated transactions in Bitcoin, Ether, and USDC, a stablecoin. This partnership ensured that cryptocurrency payments were immediately converted into traditional currency, protecting Ferrari dealers from price swings and excluding fees or surcharges for clients.

Cryptocurrency and Luxury Cars

While many blue-chip companies have avoided cryptocurrencies due to their volatility, Ferrari took a different approach. By accepting cryptocurrencies, Ferrari met the demands of its affluent clientele. This move highlights how luxury car manufacturers can adapt to changing market dynamics and customer preferences. As cryptocurrencies gain more acceptance, it’s likely that other high-end brands might follow Ferrari’s lead.

Challenges of Cryptocurrency Payments

Despite the advantages, there are challenges associated with using cryptocurrencies for payments. One major issue is the patchy regulation of digital currencies across different countries. For instance, countries like China have restricted the use of cryptocurrencies. Additionally, the high energy usage required for cryptocurrency transactions has also been a deterrent.

BitPay Partnership

BitPay played a crucial role in Ferrari’s cryptocurrency payment system. As a leading cryptocurrency payment processor, BitPay allowed Ferrari to handle transactions smoothly. By converting cryptocurrency payments into traditional currency, BitPay protected Ferrari dealers from the volatility of digital currencies. This partnership also ensured that clients were not charged additional fees or surcharges, making it easier for them to use cryptocurrencies for purchasing Ferrari cars.

Future Plans

Ferrari plans to expand its cryptocurrency payment system to other parts of the world by the end of 2024. However, this expansion will depend on the legal acceptance of cryptocurrencies in these regions. Ferrari has not yet provided details on whether it will continue to use BitPay or partner with other payment processors in Europe and other regions.

Addressing Customer Needs

Ferrari’s decision to accept cryptocurrency payments is a response to the evolving needs of its customers. Many wealthy clients prefer using digital currencies for transactions, and Ferrari aims to cater to these preferences. By offering an alternative payment system, Ferrari provides its clients with more flexibility and convenience.

Legal and Regulatory Aspects

The legal acceptance of cryptocurrencies varies from country to country. In some regions, digital currencies are widely accepted, while in others, they face significant restrictions. Ferrari’s expansion plan will take these legal and regulatory aspects into account. The company aims to ensure that it complies with all relevant laws and regulations in the countries where it operates.

Energy Consumption Concerns

High energy usage is another concern associated with cryptocurrency transactions. The process of mining and verifying transactions requires substantial computational power, which translates to high energy consumption. This has raised environmental concerns, which Ferrari will need to address as it expands its cryptocurrency payment system.

Conclusion

Ferrari’s decision to extend its cryptocurrency payment system to Europe marks an important step in the luxury car market. By embracing digital currencies, Ferrari caters to the preferences of its affluent clients and stays ahead of market trends. The partnership with BitPay has been instrumental in ensuring smooth transactions and protecting dealers from cryptocurrency volatility. As Ferrari looks to expand this system globally, it will need to navigate various legal, regulatory, and environmental challenges. However, by addressing these issues, Ferrari can continue to offer innovative solutions to its customers and maintain its position as a leader in the luxury car industry.

Bitcoin

Are Cryptocurrencies Real Money? Understanding Digital and Traditional Money Properties

by muhammed July 23, 2024

written by muhammed 8 minutes read

Introduction to Cryptocurrency and Money

Cryptocurrency is a new kind of technology and financial tool. While it shares some features of money, it feels different. Some experts call cryptocurrencies “money,” but is that correct? Can we truly call cryptocurrencies money? Are they different enough from traditional money that we need to change what we think money is?

What is Money?

Before we decide if cryptocurrencies are money, we need to understand what money is. Money has certain properties that make it useful. Here are the main properties of money:

Medium of Exchange
Unit of Account
Portable
Divisible
Durable
Fungible
Store of Value
Relative Scarcity

Medium of Exchange

Money must be easy to exchange for goods and services.

Unit of Account

Money must help us compare the value of different goods and services.

Portable

Money needs to be easy to carry and move.

Divisible

Money should be easy to divide into smaller parts.

Durable

Money must last a long time without getting damaged.

Fungible

One unit of money should be the same as another unit of money.

Store of Value

Money should keep its value over time.

Relative Scarcity

Money should not be too common; there should be a limited supply.

How These Properties Came to Be

These properties were discovered over thousands of years through billions of trades. Merchants realized these properties were necessary for smooth trading. Removing even one property made trade harder. This is why gold and silver have been used as money for so long.

In the past, people used many different forms of currency. Through experience, they learned which properties were best for trading value. Over time, gold and silver became the most common forms of money because they had all these properties. Other metals like copper are used too, but mainly for very small transactions.

Key Takeaway

For something to be money, it must have all these properties. If it lacks even one property, it is not money. This is important to remember when we talk about digital money.

Cryptocurrency and Traditional Money Properties

Now, let’s look at whether these properties apply to digital money, like cryptocurrencies. Here are the properties of money again:

Medium of Exchange
Unit of Account
Portable
Divisible
Durable
Fungible
Store of Value
Relative Scarcity

Applying Traditional Money Properties to Digital Assets

Do these properties apply to digital transactions? The answer is yes. All these properties are important for digital money too.

Portable

A digital asset must be portable to allow for quick and easy transactions.

Divisible

A digital asset must be divisible. Otherwise, it would be like a collectible, not money.

Durable

A digital asset must be durable, meaning it should be secure from hackers and government interference.

Fungible

A digital asset must be fungible. One unit of the digital asset should be the same as another unit.

Unit of Account

A digital asset must serve as a unit of account to assign value to goods and services.

Medium of Exchange

A digital asset must be a good medium of exchange to facilitate transactions of any size.

Relative Scarcity

A digital asset must be relatively scarce to protect its long-term value.

Store of Value

A digital asset must be a good store of value, keeping its value over time and space.

Exploring Digital Monetary Properties

There are over 20,000 cryptocurrencies today. What makes a cryptocurrency? Simply put, a cryptocurrency is a currency used to pay for goods and services. Its defining feature is that it’s digital and not controlled by any single party.

Decentralization

Decentralization means no single party controls the cryptocurrency network. No one controls the issuance of the assets, and no single party can influence the network. This is important for security and trust in digital money. In an adversarial environment, decentralization protects the network from attacks.

Privacy

Privacy is crucial for digital money. Without privacy, digital coins can be tracked and traced, compromising their fungibility. Cryptocurrencies with public ledgers, like Bitcoin, lack privacy, making each coin’s history unique. This means 1 Bitcoin is not the same as another Bitcoin. Privacy ensures that digital coins remain fungible.

Scalability

Scalability refers to the ability of a network to handle increased demand. If a network cannot scale, transaction fees can skyrocket, making it unusable for small transactions. For a digital asset to be a good medium of exchange, it must be scalable. Some cryptocurrencies, like Bitcoin Cash and Monero, have shown they can scale while keeping fees low.

Absolute Scarcity

Absolute scarcity means there is a fixed supply of the cryptocurrency. Bitcoin, for example, has a fixed supply of 21 million coins. While this makes the asset more valuable over time, it may not be practical for everyday transactions. An asset with a fixed supply can experience extreme deflation, making it difficult for merchants to price goods and services.

Programmability

Programmability allows for the creation of smart contracts and decentralized applications on the blockchain. While this is a fascinating feature, it is not necessary for a digital asset to be considered money.

Conclusion

In summary, cryptocurrencies need to have the properties of traditional money to be considered as such. These properties include being a medium of exchange, unit of account, portable, divisible, durable, fungible, store of value, and relatively scarce. Additionally, for digital money, decentralization, privacy, and scalability are crucial.

While many cryptocurrencies exist, only a few, like Monero, have the necessary properties to function as money in the long term. Understanding these properties helps us see how digital assets can fit into the future of finance.

Bitcoin

Bitcoin National Reserve Proposal: Bold $1 Million Predictions Ignite Debate

by muhammed July 22, 2024

written by muhammed 5 minutes read

Bitcoin National Reserve Proposal Sparks Bold $1 Million Predictions

There has been a surge of interest and discussion surrounding Bitcoin lately. A notable figure in the cryptocurrency world, Andrew Kang, has proposed that Bitcoin could potentially be recognized as a national asset. This idea has ignited conversations within the crypto community, with enthusiasts debating its global implications and setting ambitious price targets for Bitcoin.

From Speculation to Advocacy

Andrew Kang’s recent analysis has stirred significant debate. In a widely circulated post, Kang revealed that discussions are taking place among leaders about the possibility of incorporating Bitcoin into national treasury reserves. Although these discussions remain speculative, they highlight the significant potential Bitcoin holds, which could lead to major benefits for some, albeit not for everyone.

Kang believes these discussions point to Bitcoin’s untapped potential, even if they don’t lead to immediate action. Should Bitcoin become a national treasury asset, Kang predicts its value could skyrocket to $1 million. He notes that Bitcoin’s current market capitalization is significantly undervalued, even considering a modest probability of 5-10%. This undervaluation is especially noteworthy given the recent increase in Bitcoin interest from less than 1%.

A Global Ripple Effect

The concept of the US adopting Bitcoin as a reserve currency is groundbreaking. Kang asserts that if the US were to embrace Bitcoin in this way, it would likely prompt other nations to follow. This would not only validate Bitcoin as a reliable store of value but also expedite its adoption in international financial markets.

Adding to the optimism are rumors that a major Asian company may soon take on roles akin to those of Coinbase and MicroStrategy. Such a development would enhance Bitcoin’s image and encourage more businesses to invest in the cryptocurrency market.

Kang points to the rapid succession of these positive developments, suggesting that the next few months will be pivotal for Bitcoin and its proponents. With potential government endorsement, broader adoption, and increasing corporate interest, Bitcoin could be on the verge of a new era.

Navigating Benefits and Risks

While the potential benefits of Bitcoin as a national asset are significant, the implementation poses substantial challenges. If the US government were to recognize Bitcoin, it could bolster its position as a global financial leader, particularly against rivals like China and Russia. This move could drive innovation, attract blockchain technology experts, and lead to the establishment of a robust regulatory framework that enhances the security of cryptocurrency transactions and promotes wider adoption.

However, the risks are considerable. Bitcoin’s notorious volatility presents a significant threat to economic stability. A sudden drop in Bitcoin’s value could disrupt the economy and complicate monetary policy management.

Policymakers would need to carefully balance the drive for innovation with the need for a secure and stable financial system. Incorporating Bitcoin as a strategic reserve asset could greatly enhance its credibility in the financial sector, but this must be carefully weighed against potential economic risks and consumer protection concerns.

The Path Forward

The ongoing discussions about Bitcoin potentially becoming a national asset highlight its increasing recognition and transformative potential in global finance. With ambitious price targets and the possibility of setting a global precedent, Bitcoin stands on the brink of a significant shift.

However, the journey ahead will be complex and requires careful strategizing. The coming months will be critical in determining whether Bitcoin will solidify its role in national financial systems or remain a speculative asset with untapped potential.

In summary, Andrew Kang’s proposal that Bitcoin could be recognized as a national asset has sparked bold predictions and lively discussions within the cryptocurrency community. With the potential for Bitcoin to become a national treasury asset, its value could skyrocket to $1 million. The idea of the US adopting Bitcoin as a reserve currency could have a global ripple effect, prompting other nations to follow and validating Bitcoin as a reliable store of value.

However, while the benefits of Bitcoin as a national asset are significant, the risks are considerable. Policymakers must carefully balance the drive for innovation with the need for a secure and stable financial system. The journey ahead will be complex and requires careful strategizing. The next few months will be critical in determining whether Bitcoin will solidify its role in national financial systems or remain a speculative asset with untapped potential.

With potential government endorsement, broader adoption, and increasing corporate interest, Bitcoin could be on the verge of a new era. The ongoing discussions about Bitcoin potentially becoming a national asset highlight its increasing recognition and transformative potential in global finance. The future of Bitcoin as a national asset is still uncertain, but the possibilities are exciting.

Andrew Kang’s proposal has stirred significant debate, highlighting the significant potential Bitcoin holds. The concept of the US adopting Bitcoin as a reserve currency is groundbreaking and could have a global ripple effect. The potential benefits of Bitcoin as a national asset are significant, but the risks are considerable. Policymakers must carefully balance the drive for innovation with the need for a secure and stable financial system.

In conclusion, the journey ahead for Bitcoin as a national asset will be complex and requires careful strategizing. The next few months will be critical in determining whether Bitcoin will solidify its role in national financial systems or remain a speculative asset with untapped potential. The future of Bitcoin as a national asset is still uncertain, but the possibilities are exciting.

Ethereum

Ethereum Mixer Tornado Cash Surpasses $2 Billion in 2024 Amid Sanctions

by muhammed July 21, 2024

written by muhammed 5 minutes read

Slowdown in July

Ethereum mixer Tornado Cash has received nearly $2 billion in 2024 despite sanctions. However, things have slowed down in July, with the protocol attracting only $65.1 million worth of deposits, according to data from Flipside.

First Half of 2024: Significant Deposits

In the first six months of 2024, over $1.9 billion was deposited into Tornado Cash. Although things have slowed down in July, the protocol still managed to attract a significant amount of deposits. According to crypto analytics service Flipside, the total value locked (TVL) metric is not as reliable for Tornado Cash. This is because users typically deposit funds and then withdraw anonymized funds, rather than keeping them in the protocol for a long time like with most decentralized finance (DeFi) services.

Tornado Cash’s TVL Growth

Despite the limitations of the TVL metric, data from DeFiLlama shows significant growth for Tornado Cash. At the start of the year, the protocol had under 160,000 ETH. Now, it has nearly 168,600 ETH. In U.S. dollars, this represents growth from $374.4 million to $572.82 million, considering the increase in asset value.

Privacy and Anonymity

Tornado Cash is a coin mixer designed to preserve the privacy of crypto users. It uses zero-knowledge proof cryptography to anonymize user deposits, allowing them to withdraw funds to a new address that cannot be traced back to the original deposit. This makes it a popular tool for those seeking privacy in their crypto transactions.

Inflows from Major Hacks

Tornado Cash has seen inflows from wallets associated with major hacks. For instance, the hacker behind the Poloniex hack sent $3.3 million worth of Ethereum (ETH) to the mixer in early May. Transactions linked to hacks, including some allegedly connected to North Korea, led the U.S. Treasury Department to sanction Tornado Cash in August 2022.

Legal Prosecution and Community Reaction

Following the sanctions, Tornado Cash developers faced lengthy legal prosecution. The crypto community viewed this as an overreach. This prosecution is ongoing, with a recent ruling delaying the money laundering trial of Tornado Cash co-founder Roman Storm, despite objections from the prosecution.

Coinbase’s Legal Challenge

Coinbase’s chief legal officer, Paul Grewal, criticized the U.S. Treasury’s actions. He argued that the Treasury is “bending old laws past their breaking point” by blaming developers and TORN holders for Tornado Cash’s misuse. Grewal pointed out that immutable, open-source software code is not property. Therefore, the Treasury can only regulate property in which a foreign national has an interest.

Support from Vitalik Buterin

Ethereum co-founder Vitalik Buterin expressed support for privacy-centric crypto tools. He called the 64-month prison sentence for Tornado Cash developer Alexey Pertsev “really unfortunate.” Buterin encouraged people to develop next-gen solutions for privacy. He believes building software is a legitimate way to fight for privacy.

Tornado Cash’s Role in Crypto Privacy

Tornado Cash plays a crucial role in maintaining privacy in the crypto world. It allows users to make transactions without revealing their identities. Despite the legal and regulatory challenges, the protocol continues to attract significant deposits.

Sanctions Impact

The sanctions have impacted Tornado Cash, but the protocol still sees substantial inflows. The U.S. Treasury’s actions have sparked debate within the crypto community about the regulation of privacy tools. Many believe that sanctioning a tool used for privacy sets a dangerous precedent.

Future of Privacy-Centric Crypto Tools

The future of privacy-centric crypto tools like Tornado Cash remains uncertain. Legal challenges and regulatory scrutiny will likely continue. However, the demand for privacy in crypto transactions suggests that tools like Tornado Cash will remain relevant.

Tornado Cash’s Activity in 2024

Analyzing Tornado Cash’s activity in 2024 reveals that the protocol remains active despite the challenges. Significant deposits indicate that users continue to trust the protocol for their privacy needs. This activity highlights the ongoing demand for privacy-centric solutions in the crypto space.

Conclusion

Ethereum mixer Tornado Cash has attracted nearly $2 billion in 2024 despite facing sanctions and legal challenges. The protocol’s ability to maintain significant inflows, even with regulatory scrutiny, underscores the importance of privacy in the crypto world. As the debate over privacy and regulation continues, tools like Tornado Cash will play a pivotal role in shaping the future of crypto transactions.

Ethereum

Ethereum ETFs Start Trading on Cboe July 23: SEC Approvals Confirmed

by muhammed July 20, 2024

written by muhammed 8 minutes read

Ethereum ETFs Set to Begin Trading on July 23, Cboe Confirms

The Chicago Board Options Exchange (Cboe) has announced that five spot Ethereum exchange-traded funds (ETFs) will start trading on Tuesday, July 23. This news has been confirmed through notices posted on Cboe’s website.

Ethereum ETFs to Begin Trading

The spot Ethereum ETFs that will begin trading on July 23 include the following:

21Shares Core Ethereum ETF (CETH)
Fidelity Ethereum Fund (FETH)
Franklin Ethereum ETF (EZET)
Invesco Galaxy Ethereum ETF (QETH)
VanEck Ethereum ETF (ETHV)

Each listing notice from Cboe reads, “We are pleased to announce that One (1) Exchange Traded Product (‘ETP’) will be listed on Cboe and will begin trading as a new issue on July 23, 2024, pending regulatory effectiveness.”

Regulatory Approval from the SEC

The date of July 23 had been expected for some time. Earlier this week, sources close to the situation mentioned that they expected the U.S. Securities and Exchange Commission (SEC) to give final approvals for these Ethereum ETFs. The SEC had been working on final drafts of filings from various firms.

In May, Ethereum ETFs received initial approvals from the SEC. This was surprising to many, as the SEC had been scrutinizing Ethereum-centric firms and had previously treated Ethereum differently from Bitcoin. Just four months after spot Bitcoin ETFs started trading in the U.S., the SEC decided to approve the Ethereum ETFs.

Now, Cboe is confident that the ETF operators will get their final approvals ahead of the trading date on July 23.

Understanding Ethereum ETFs

An ETF, or exchange-traded fund, is a popular investment vehicle. It allows investors to buy shares that track the price of an underlying asset, such as gold, foreign currencies, or cryptocurrencies like Ethereum. These funds trade on stock exchanges, making it easier for investors to get exposure to various assets.

The SEC surprised the traditional and crypto markets when it approved 11 spot Bitcoin ETFs in January. This approval led to a significant influx of capital into the Bitcoin space. Industry experts had expected the SEC to take longer to approve Ethereum ETFs due to its cautious approach. However, the SEC quickly approved the Ethereum ETFs, and the final paperwork is now being filed. If everything goes smoothly, investors will soon be able to invest in the second-largest digital asset by market cap.

List of Ethereum ETFs and Their Managers

Several major investment firms have received the green light from the SEC to list spot Ethereum ETFs in the U.S. Here is a list of the fund managers and their respective ETFs:

BlackRock

iShares Ethereum Trust
BlackRock, the world’s largest asset manager, got approval for its iShares Ethereum Trust. The firm first filed an S-1 form for this product in November. BlackRock’s CEO, Larry Fink, is enthusiastic about cryptocurrency and has mentioned the value of having an Ethereum ETF. He also discussed the inevitability of “tokenization.”

Grayscale

Grayscale Ethereum Trust to Spot Ethereum ETF
Grayscale received SEC approval after filing a proposal in October to convert its Grayscale Ethereum Trust into a spot Ethereum ETF. The current trust operates like a closed-end fund. When it transitions to an ETF, investors will be able to redeem shares more easily. Grayscale’s Bitcoin Trust had previously converted into an ETF, setting a precedent for this change. Additionally, Grayscale’s mini ETH ETF also received approval this week. This mini trust will have lower fees for investors and be seeded with assets from the main, larger ETF.

ARK Invest/21Shares

ARK Invest Ethereum ETF
ARK Invest, led by Cathie Wood, filed a proposal for an Ethereum ETF in September. This ETF is in partnership with crypto ETF issuer 21Shares, with Coinbase acting as its custodian.

ProShares

ProShares Ether Strategy ETF
ProShares recently received approval for its ProShares Ether Strategy ETF. Initially, ProShares had applied for futures products but later quietly applied for a spot fund.

Fidelity

Fidelity Ethereum Fund
Fidelity has shown interest in launching an Ethereum ETF since November. Cboe filed a 19b-4 on behalf of Fidelity, and in March, Fidelity filed its S-1 with the SEC.

VanEck

VanEck Ethereum ETF
VanEck was the first to file a proposal for an Ethereum ETF in 2021. Although it withdrew the proposal later that year, it has since refiled. VanEck’s Bitcoin ETF has been successful, and the firm even waived its fees to compete better in the market.

Hashdex

Hashdex Nasdaq Ethereum ETF
Brazilian fund manager Hashdex filed a proposal for its Hashdex Nasdaq Ethereum ETF in September. Hashdex already has several crypto ETFs trading in Brazil. In the U.S., its Hashdex Bitcoin ETF was approved in January and began trading in March.

Franklin Templeton

Franklin Ethereum ETF
Franklin Templeton entered the race in February when it filed a proposal with the SEC. The firm’s Franklin Bitcoin ETF launched earlier this year under the EZBC ticker.

Invesco/Galaxy Digital

Invesco Galaxy Ethereum ETF
Invesco, in collaboration with Galaxy Digital, submitted a proposal for an Ethereum ETF in September. Invesco is the sponsor of the product, while Galaxy Digital acts as its execution agent, handling the selling of ETH to cover the ETF’s expenses.

Bitwise

Bitwise Ethereum ETF
Bitwise filed its S-1 form in March to offer a spot Ethereum ETF. Matt Hougan, Chief Investment Officer at Bitwise, previously predicted that ETH ETFs would launch in December and be more successful if approved later in the year.

Impact on the Crypto Market

The approval and trading of these Ethereum ETFs are expected to have a significant impact on the crypto market. With major investment firms like BlackRock, Grayscale, ARK Invest, and others entering the space, there will likely be increased institutional investment in Ethereum. This could lead to greater market stability and growth in Ethereum’s value.

The approval of Ethereum ETFs also marks a significant shift in the SEC’s approach to cryptocurrency regulation. Initially hesitant, the SEC’s recent approvals indicate a more open stance towards digital assets. This could pave the way for future approvals of other cryptocurrency-based ETFs, further legitimizing the crypto market.

Investors are eagerly awaiting the start of trading on July 23. The launch of these Ethereum ETFs represents a major milestone for the cryptocurrency industry and provides a new avenue for investors to gain exposure to Ethereum. As these ETFs begin trading, it will be interesting to observe how the market responds and how the value of Ethereum is affected.

Conclusion

In summary, the Cboe’s announcement that five spot Ethereum ETFs will begin trading on July 23 is a significant development for the cryptocurrency market. With approvals from the SEC and participation from major investment firms, these ETFs are set to attract substantial interest from investors. This move is expected to enhance the legitimacy and stability of Ethereum and the broader crypto market. As the trading date approaches, all eyes will be on how these new financial products perform and their impact on the market.

Stablecoins

Hong Kong Trials Stablecoin with Standard Chartered and Animoca Brands

by muhammed July 19, 2024

written by muhammed 5 minutes read

Hong Kong Trials Stablecoin with Major Participants

Introduction to Hong Kong’s Stablecoin Sandbox

The Hong Kong Monetary Authority (HKMA) has launched its stablecoin sandbox, featuring major participants like Standard Chartered Bank and Animoca Brands. This initiative is part of Hong Kong’s drive to become a key player in the cryptocurrency world. The HKMA aims to create a secure and effective regulatory system for stablecoins.

Participants in the Stablecoin Sandbox

The first batch of participants includes Jindong Coinlink Technology, RD InnoTech, Standard Chartered Bank, Animoca Brands, and Hong Kong Telecommunications. These organizations will test their stablecoin operational plans within the sandbox. However, they are not allowed to solicit funds from the public during the testing phase.

HKMA’s Regulatory Goals

The HKMA’s main goal is to develop a risk-based regulatory regime for stablecoin issuance. Darryl Chan, the deputy chief executive of the HKMA, emphasized that participants must not raise funds from the public or offer investment products in the name of the sandbox. This precaution ensures that the general public’s funds are protected during the initial testing phase.

Use Cases for Stablecoins

The first batch of participants will focus on various use cases for stablecoins, including payments, supply chain management, and capital markets. Stablecoins are seen as a potential medium for payments, offering lower costs and reduced transaction times. They also provide innovative solutions due to their programmability feature, enabling more automated and smarter financial services.

Legislative Proposal for Stablecoin Issuers

The HKMA has released the results of a legislative proposal consultation for stablecoin issuers. This proposal requires all fiat-referenced stablecoin issuers to obtain a license from the HKMA. The regulatory framework aims to ensure that stablecoin issuance and management are conducted securely and responsibly.

Next Steps for Stablecoin Regulation

The HKMA plans to finalize the legislative proposal and introduce a bill to the Legislative Council as soon as possible. They will continue processing applications for the sandbox, urging applicants to develop specific plans for the issuance, distribution, and redemption of stablecoins. It’s important to note that participation in the sandbox is not a prerequisite for applying for a stablecoin issuer license in the future. Applicants will still need to submit a formal application when the regulatory regime is in place.

Benefits of Stablecoins

Stablecoins offer numerous benefits, such as lower transaction costs and faster payments. They can also facilitate fund flows and improve risk management associated with financial transactions. With their programmability, stablecoins can enable more automated and innovative financial services, enhancing the efficiency of the financial system.

Challenges and Precautions

While stablecoins have many advantages, there are also challenges and risks. The HKMA is taking a cautious approach by not allowing participants to solicit public funds during the testing phase. This measure helps to protect the public from potential risks associated with untested stablecoin projects. The HKMA’s focus on a risk-based regulatory regime aims to address these challenges and ensure the safe development of stablecoin technology.

The Role of Major Participants

Standard Chartered Bank and Animoca Brands are among the notable participants in the HKMA’s stablecoin sandbox. Their involvement highlights the growing interest and investment in stablecoin technology by major financial institutions. These organizations bring valuable expertise and resources to the development and testing of stablecoin solutions.

Public Response and Future Outlook

The announcement of the stablecoin sandbox participants has generated significant interest and discussion in the financial community. As the HKMA continues to develop its regulatory framework, there is optimism about the potential of stablecoins to transform the financial landscape. The successful implementation of a secure and efficient regulatory regime will be crucial for the widespread adoption of stablecoins in Hong Kong and beyond.

Conclusion

Hong Kong’s stablecoin sandbox initiative, led by the HKMA, marks an important step in the region’s efforts to become a cryptocurrency hub. With major participants like Standard Chartered Bank and Animoca Brands, the sandbox aims to test and refine stablecoin operational plans within a controlled environment. The HKMA’s focus on developing a risk-based regulatory regime ensures that stablecoin issuance and management are conducted responsibly. As the regulatory framework evolves, the potential for stablecoins to revolutionize payments, supply chain management, and capital markets becomes increasingly apparent. The future of stablecoins in Hong Kong looks promising, with the HKMA paving the way for a secure and innovative financial ecosystem.

Ethereum

Fee War Heats Up Among Spot Ether ETF Issuers: Who’s Offering the Best Deal?

by muhammed July 18, 2024

written by muhammed 7 minutes read

A fee war has broken out among companies planning to launch the first U.S. exchange-traded funds (ETFs) holding Ether. This week, eight asset managers filed their final paperwork with the Securities and Exchange Commission (SEC), detailing the fees they plan to charge for their proposed spot Ether ETFs. This is one of the last steps before these ETFs start trading next Tuesday.

Fees and Waivers by Asset Managers

Here’s a breakdown of the fees that asset managers plan to charge for their spot Ether ETFs:

BlackRock: Plans to charge 0.25%. After a partial fee waiver for the first year, the fund will charge 0.12% for its first $2.5 billion in assets.
Fidelity Investments: Will charge a fee of 0.25% and waive the fee through the end of 2024.
21Shares: Plans to charge 0.21% and waive the fee for six months or the first $500 million in assets, whichever comes first.
VanEck: Will charge 0.2% and waive the fee for the first year or until the fund reaches $1.5 billion in assets. If assets exceed $1.5 billion before the year is up, those over $1.5 billion will be charged 0.2%.
Franklin Templeton: Will charge 0.19% and waive the fee for the first six months for the first $10 billion in assets.
Invesco and Galaxy Digital Joint Venture: Their fund will charge 0.25%.
Bitwise Asset Management: Will charge 0.2% and waive the fee on the first $500 million in assets for six months.
Grayscale Investments: Will charge 2.5% for its Ethereum Trust and 0.25% for its Ethereum Mini Trust. The Mini Trust will have a fee waiver for the first year, charging 0.12% for its first $2 billion in assets.

Competitive Fees and Discounts

Most of the soon-to-be-listed Ether ETFs are offering temporary fee waivers or discounts to attract investors. According to filings with U.S. regulators, these promotions range from full fee waivers to discounts of about 50%, lasting from six months to a year. Some discounts expire once the ETFs manage a certain amount of assets under management (AUM).

Seven out of ten proposed spot Ether ETFs are offering fee cuts. The Grayscale Ethereum Trust (ETHE) and the Invesco Galaxy Ethereum ETF are not participating in the fee war. ProShares Ethereum ETF is behind in the registration process and is not expected to list next week.

SEC Filings and Listing Dates

Issuers filed the final round of amended S-1 registrations for nine proposed spot Ether ETFs on July 17. The SEC has reportedly indicated that July 23 will be the listing day for these funds. The latest filings detail the management fees for each fund.

Leading the Fee Race: Franklin Templeton

Franklin Templeton’s Franklin Ethereum ETF (EZET) is leading the fee race. Its management fees are fully waived for one year or until the fund reaches $10 billion in AUM. After this period, the baseline fee will be 0.19%, the lowest among the proposed ETFs.

Other spot Ether ETFs have fees ranging from 0.20% to 0.25%, with one exception. The Grayscale Ethereum Trust (ETHE), which has been trading under a different fund structure since 2017, will continue to charge its longstanding management fee of 2.5%.

Grayscale’s New Mini Trust

Grayscale is also launching a new fund, the Grayscale Ethereum Mini Trust, with a more competitive fee structure. For the first 12 months or until the fund’s AUM hits $2 billion, the Mini Trust’s fee will be reduced from 0.25% to 0.12%.

Industry Reactions

Grayscale faced criticism on July 17 for not lowering fees on its legacy fund, ETHE, which has nearly $10 billion in AUM. Some industry analysts also believe that the fees for the new Mini Trust are too high.

Bloomberg ETF Analyst Eric Balchunas commented that while the Mini Trust is cheaper, it may not be enough to attract significant organic investment, especially since BlackRock offers a similar fee.

Fee Waivers and Promotions

Most Ether ETFs are offering fee waivers and promotions to stay competitive. These waivers range from six months to a year and can significantly reduce the cost for investors. Here’s a closer look at some of these promotions:

BlackRock: Offers a partial fee waiver for the first year, charging only 0.12% on its first $2.5 billion in assets.
Fidelity Investments: Waives its 0.25% fee through the end of 2024.
21Shares: Waives its 0.21% fee for six months or the first $500 million in assets.
VanEck: Waives its 0.2% fee for the first year or until the fund reaches $1.5 billion in assets.
Franklin Templeton: Waives its 0.19% fee for the first six months on the first $10 billion in assets.
Bitwise Asset Management: Waives its 0.2% fee on the first $500 million in assets for six months.
Grayscale Investments: Waives the Mini Trust’s 0.25% fee for the first year, reducing it to 0.12% for the first $2 billion in assets.

Expected Impact of Fee Reductions

The fee reductions are expected to make these spot Ether ETFs more attractive to investors. Lower fees mean higher returns for investors, which can help attract more assets and boost the popularity of these funds.

The competition among asset managers is intense, with each trying to offer the most attractive fees and terms to capture a share of the market. This competition benefits investors, who can take advantage of lower costs and better terms.

Conclusion

As the first U.S. spot Ether ETFs prepare to launch, a fee war is heating up among asset managers. Companies like BlackRock, Fidelity Investments, 21Shares, VanEck, Franklin Templeton, Invesco, Galaxy Digital, Bitwise Asset Management, and Grayscale Investments are all vying for investors’ attention with competitive fee structures and promotional waivers.

The SEC’s approval of these ETFs and the competitive fees being offered are significant milestones in the development of the Ether ETF market. Investors will soon have more options for investing in Ether through ETFs, with the potential for lower costs and higher returns.

By staying informed about the fees and promotions offered by different asset managers, investors can make better decisions about which Ether ETFs to invest in. As the market evolves, it will be interesting to see how these fee wars impact the performance and popularity of these new investment products.

Bitcoin

Bitcoin Price Analysis: Potential Rally to $77,000

by muhammed July 18, 2024

written by muhammed 4 minutes read

In recent days, Bitcoin has been the subject of intense scrutiny among analysts predicting its next price move. The consensus among experts is that Bitcoin could soon reach $77,000, marking a significant milestone in its current bull cycle. To validate this potential rally, Bitcoin must first surpass its previous all-time high of $73,700.

Technical Analysis and Bullish Signals

Technical charts reveal a bullish pattern known as a bull flag, characterized by two upward rallies separated by brief retracements. This pattern typically indicates continued upward momentum for Bitcoin. Analysts interpret these signals as positive indicators for Bitcoin’s price trajectory, suggesting a strong likelihood of reaching $77,000 in the near term.

Key Resistance Levels and Support

Despite these optimistic forecasts, Bitcoin faces substantial resistance at the $65,000 mark. This level has become a critical indicator for crypto analysts, representing a significant hurdle that Bitcoin must overcome to sustain its upward momentum. On the other hand, historical all-time highs serve as essential support and resistance zones, with the $73,700 level being a crucial benchmark for confirming further price increases.

Impact of ETF Inflows on Bitcoin’s Price

Recent data indicates a substantial influx of funds into US spot Bitcoin ETFs, totaling $422 million on July 16 alone. These inflows have been instrumental in driving Bitcoin’s price rally, underscoring the growing influence of ETF investments in the cryptocurrency market. Analysts estimate that ETFs accounted for approximately 75% of new investments in Bitcoin when it surpassed the $50,000 mark earlier this year.

As analysts anticipate continued growth in Bitcoin’s price, a significant catalyst lies in the expected inflows into Bitcoin ETF funds in the coming weeks. These ETFs have been pivotal in recent price movements, with substantial investments pouring in since early July, culminating in a notable $422 million influx on July 16 alone. This surge in ETF activity underscores a growing institutional interest in Bitcoin, as these funds offer a regulated and accessible avenue for large-scale investors to enter the cryptocurrency market.

The projected increase in ETF inflows could further propel Bitcoin towards the $77,000 mark, as outlined by bullish forecasts. Such inflows not only inject liquidity into the market but also signal confidence among institutional investors in Bitcoin’s long-term viability as a store of value and potential for substantial returns. Analysts suggest that if these trends persist, Bitcoin could see sustained upward momentum, potentially surpassing key resistance levels like $65,000 and the previous all-time high of $73,700.

Moreover, the influx of funds into Bitcoin ETFs reflects broader market sentiments and economic conditions, indicating a favorable environment for cryptocurrency adoption and investment. As regulatory frameworks continue to evolve to accommodate digital assets, ETFs serve as a crucial bridge between traditional finance and the burgeoning crypto market, offering investors diversified exposure and regulatory oversight.

The expected ETF inflows into Bitcoin ETF funds present a promising outlook for the cryptocurrency’s price trajectory, with potential growth avenues opening up amidst increasing institutional participation and market confidence.

Forecast for Bitcoin’s Future Movements

Looking ahead, analysts are closely monitoring ETF inflows as a key determinant of Bitcoin’s future price movements. The uptick in ETF investments since July 5 has bolstered confidence in Bitcoin’s ability to maintain its upward trajectory. Should this trend continue, Bitcoin could potentially reach the $69,000 mark as the next significant milestone before aiming for $77,000 and beyond.

Conclusion

In conclusion, Bitcoin’s price outlook remains optimistic amidst bullish technical signals and significant ETF inflows. As it continues to navigate key resistance levels and historical price highs, the cryptocurrency market anticipates further upward movement towards the coveted $77,000 mark. With ETFs playing a pivotal role in shaping Bitcoin’s price dynamics, investors and analysts alike are closely monitoring these developments for insights into future market trends.

Bitcoin

Why Bitcoin Struggles to Rally Above $65k Despite $1.91 Billion ETF Inflows

by muhammed July 18, 2024

written by muhammed 5 minutes read

Introduction

Since July 5, Bitcoin has seen net inflows of $1.91 billion into its US spot exchange-traded funds (ETFs). Despite this, its price has struggled to stay above $65,000. Understanding why this is happening involves looking at several factors in the financial markets and how they affect Bitcoin (BTC).

Arbitrage Trading and Bitcoin ETFs

One reason Bitcoin’s price isn’t rising despite the surge in ETF inflows is arbitrage trading. Some investors buy spot ETFs not to hold Bitcoin long-term but to use these shares for other financial trades. Hedge funds, in particular, use arbitrage strategies to profit from market inefficiencies without betting on price movements.

For example, the cash and carry trade involves selling Bitcoin futures while buying the equivalent spot ETF position. This means they aren’t necessarily betting on Bitcoin’s price going up.

Hedge Funds and Arbitrage Trades

Major hedge funds like Millennium Management, Schonfeld Strategic Advisors, Jane Street, HBK Investments, Susquehanna International, and Bracebridge Capital are involved in these arbitrage trades. These funds don’t typically hold Bitcoin long-term or believe strongly in its value. Instead, they focus on making profits from market differences.

The Chicago Mercantile Exchange (CME) Bitcoin futures open interest, which measures the total active contracts, is currently $10.2 billion, up 23% from the previous week, according to CoinGlass data. This suggests many hedge funds are looking to profit from the premium on BTC futures contracts, currently at an annualized rate of 11%.

Spot Bitcoin ETF Buyers and Market Impact

Not every spot Bitcoin ETF buyer is betting on BTC price upside. Some buyers might have shifted away from spot positions for tax reasons or to use shares as collateral for traditional finance trades. The increase in CME’s BTC futures open interest partially explains the limited impact of the spot ETFs net inflow. Even though these funds eventually cover their futures market short positions, the market impact is neutralized by the sale of the spot BTC position.

Influence of Traditional Finance Markets

Bitcoin’s underperformance isn’t linked to traditional finance markets. On July 16, the S&P 500 index reached an all-time high, and gold, considered the world’s largest reserve asset, traded at a historical high on July 17. These events show that Bitcoin’s challenges are unique to its market.

Decreasing Demand for Inflation Hedges

Another factor is the drop in demand for inflation hedges. Bitcoin is often seen as a hedge against inflation because of its fixed supply. However, US inflation is decreasing, and US Treasurys are strengthening, showing confidence in the Federal Reserve’s strategy.

The US Treasury 5-year yield fell to 4.07% on July 17 from 4.43% on July 1, indicating higher demand for these bonds. Investors accept lower yields for these safe assets or expect lower inflation ahead. This trend is unfavorable for Bitcoin, which is an alternative store of value.

Bitcoin’s Appeal and US Economic Confidence

Bitcoin’s main appeal lies in its predictability and independence due to its hard monetary policy and decentralized network. This narrative is stronger when central banks struggle, such as with a collapsing currency or lack of trust in the government’s ability to repay debt.

However, as US inflation drops and confidence in the economy grows, Bitcoin’s appeal as a store of value weakens. Positive macroeconomic data, like a strong US economy, can negatively impact Bitcoin’s price, even with spot ETF inflows.

Institutional Investors and Bitcoin’s Price

Institutional investors play a significant role in Bitcoin’s price dynamics. Hedge funds engaged in arbitrage trades are not typical long-term holders. Their strategies include using BTC futures contracts and spot positions to profit from market inefficiencies.

These funds are also influencing the CME Bitcoin futures market. The increase in open interest and the annualized premium rate indicate that many institutional investors are involved in trading BTC futures. This activity affects Bitcoin’s price movement, making it challenging to rally above $65,000.

Conclusion

In summary, Bitcoin’s price struggles despite the surge in spot ETF inflows due to several factors. Arbitrage trading, decreasing demand for inflation hedges, and the influence of traditional finance markets all play a part. Hedge funds using arbitrage strategies and the overall confidence in the US economy also impact Bitcoin’s price.

Understanding these dynamics helps explain why Bitcoin’s price isn’t rising as expected, even with significant inflows into spot ETFs. Investors and traders need to consider these factors when analyzing Bitcoin’s market behavior and future price movements.

Bitcoin

Binance and Whales Buy the Dip: Bitcoin Price Recovery and Bullish Sentiment

by muhammed July 17, 2024

written by muhammed 4 minutes read

Crypto Markets See Bitcoin Price Dip

Recently, the crypto markets have gone through a tough time. Bitcoin and other cryptocurrencies saw their prices fall sharply. This drop, known as a dip, was partly because the German authorities sold a lot of seized Bitcoin. This caused a lot of liquidations, which means many people sold their Bitcoin quickly. But not everyone panicked during this dip.

Big Players Buy Bitcoin During Dip

While many were selling, some big players in the market took advantage of the lower prices. An on-chain researcher noticed that Binance, one of the largest cryptocurrency exchanges, increased its Bitcoin reserves. Binance added 41,000 Bitcoins to its existing 580,000 BTC reserves. This move happened during the dip when many were panic-selling. Interestingly, Binance had made a similar move earlier in the year.

During the same time, other exchanges like Bitfinex and Upbit also bought more Bitcoin. Bitfinex added around 13,000 BTC, and Upbit added 5,000 BTC to their reserves. This data shows that the Bitcoin balance across centralized exchanges (CEXs) is growing. Usually, this means there is a higher selling pressure in the market.

Whales Are Bullish on Bitcoin

It is not just exchanges that are buying Bitcoin. Large individual investors, known as whales, were also accumulating Bitcoin. Whales were buying Bitcoin at their fastest rate since April 2023. Ki Young Ju, the founder of CryptoQuant, a major provider of on-chain and market data analytics, noted this trend. According to him, whales accumulated 85,000 BTC over the last 30 days. Some estimates say whales bought 71,000 BTC within the last week. These purchases were partly at the expense of ETF holdings.

On July 5, the whales bought over 47,000 BTC at an average price of $57,000. Meanwhile, smaller traders were selling during the dip. Ki Young further suggested that most of the current selling volume in the market can be absorbed by the over-the-counter (OTC) market.

German Bitcoin Sales and Market Impact

The way the German authorities sold their Bitcoin is also interesting. Instead of using a specialist broker, they sold the funds directly on the retail market. After weeks of small transfers, the government quickly accelerated the sales. By July 12, the German government had completely emptied its Bitcoin wallets.

The timing of these sales was also questioned. Around the same time Germany started selling, the Mt.Gox exchange was preparing to repay its debtors. This added more selling pressure to the market, pushing prices down further.

Smart Moves by Binance and Other Buyers

Some people believe that Binance and other buyers made a smart move by purchasing Bitcoin during the dip. They bought Bitcoin at a lower price, which might not be seen again. Others say that these big buyers helped stabilize the market and support Bitcoin prices. Despite this support from institutional investors, it is clear that retail traders still play a big role in shaping the market with their trading patterns.

Bitcoin Price Recovery and Future Predictions

Since the dip, Bitcoin has significantly recovered. At the time of writing, Bitcoin has reached $63,000. Some experts even predict that Bitcoin could reach a new all-time high (ATH) by the end of this month. “We are about to experience the longest bull run ever,” said another expert from CryptoQuant.

The number of wallets holding at least 10 BTC has been increasing this month. This also shows a generally bullish sentiment in the market. More and more investors are holding onto their Bitcoin, expecting prices to go higher.

Summary

In summary, the recent dip in Bitcoin prices saw different reactions from various market players. While many smaller traders sold their Bitcoin, big players like Binance, Bitfinex, and whales took the opportunity to buy more. The actions of these institutional investors and whales indicate a bullish sentiment in the market. Despite the selling pressure from events like the German Bitcoin sales and Mt.Gox repayments, the market has shown signs of recovery. As Bitcoin prices rise again, there is optimism that we may see new all-time highs soon.

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