SEC Eyes Cash System for Bitcoin ETFs; Grayscale Refiles as Barry Silbert Steps Down; MicroStrategy Soars Amid ETF Buzz
Summary:
The U.S. Securities and Exchange Commission (SEC) pursues a cash-based creation and redemption system for Bitcoin ETFs to combat market manipulation. Other asset management companies, including BlackRock, ARK Invest, and Grayscale, have adopted this system recently. Recently-resigned Barry Silbert's departure from Digital Currency Group may bolster Grayscale's chances of converting its Bitcoin Trust into a spot Bitcoin ETF. Coinbase's Base network shows steady growth, while China's GBA Capital plans a $10 billion Web3 fund. MicroStrategy's stock price surges over 350% in 2023 due to U.S. Bitcoin ETF anticipation, and the crypto industry is witnessing increased success of women.
The U.S. Securities and Exchange Commission (SEC) has decided to apply a cash-based creation and redemption system to address the risk of market manipulation should it approve the launch of a spot Bitcoin (BTC) exchange-traded fund (ETF). This approach means new shares of a spot Bitcoin ETF can only be created or redeemed via cash transactions, a departure from conventional ETFs involving stocks and commodities, which usually employ an in-kind model where market participants manage the assets directly. Proposing this system initially was Hashdex, an asset management firm seeking regulatory green light for the said financial vehicle. This proposal was crafted to counteract potential price manipulation during trading, according to Hashdex's August filing. Upon SEC's prompting, other asset management companies such as BlackRock, ARK Invest, and Grayscale have incorporated this system in recent times. Although some observers predict that the SEC's next plan could necessitate a sizable and regulated market, possibly implicating the Chicago Mercantile Exchange for physical transactions, this may not be the actual scenario. In a recent gathering with applicants, the SEC has set the final date for submitting their final S-1 amendments to be December 29, cautioning applicants that failure to meet the deadline will exclude them from the batch of potential approvals for January. One major entry barrier for approval was removed when Digital Currency Group's Barry Silbert resigned.
As Barry Silbert steps down, Grayscale resubmits its Bitcoin ETF application. On the same day Barry Silbert—the CEO of Digital Currency Group—announced his resignation from the board of Grayscale, the crypto asset management firm presented an amended S-3 filing with the U.S securities regulator. Some crypto market analysts are speculating that Silbert’s exit may significantly enhance Grayscale's chances of transforming its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF, a venture currently pending an SEC decision.
Coinbase's Base network continues growing consistently, exceeding $735 million in TVL. Even though the expansion rate has decelerated since its initial surge, Base network's total value locked (TVL) touched roughly $735 million on December 24, up by 4% compared to the prior week. More than 6.97 million transactions were processed on the network in the preceding 30 days, averaging 3.45 transactions per second on a daily basis.
China's GBA Capital has declared a $10 billion commitment to launch a Web3 fund. Reportedly, the fund will invest in virtual reality, metaverse, and nonfungible tokens-focused startups, aiming to transform the Guangdong-Hong Kong-Macao economic area into a global hub for "meta-assets". With a recent spike in Web3 startups and international relocations to the region, GBA Capital, established by the China Europe International Financial Group in Hong Kong, is positioning itself strategically.
Thanks to the hype around the potential approval of a spot Bitcoin ETF in the U.S., MicroStrategy's stock price has soared by over 350% in 2023. The company's substantial Bitcoin holdings play a major role in bolstering its stock performance. Currently, MicroStrategy and its subsidiaries have a Bitcoin portfolio of 189,150 BTC, carrying a total purchase cost of roughly $5.9 billion and an average purchase price of $31,168 per coin. Many analysts perceive the company's stock as a "leveraged Bitcoin ETF" due to its significant cryptocurrency exposure.
In 2023, the crypto-industry was marked by the success of many women. In an industry largely driven by community and decentralization, without the importance of personal background, crypto has become an ideal platform for women to engage in technology.
Published At
12/29/2023 6:30:00 PM
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