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- Bitcoin Newsletter Week 21 2024
Bitcoin Newsletter Week 21 2024
Weekly update on all things Bitcoin
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TL;DR
BTC is up
Bitcoin dominance is down
Bitcoin Whales Amass $1.4B in BTC After FIT21 Bill Passes
BlackRock’s Bitcoin ETF Sees Surge in Inflows
Spot Ethereum ETF Approval 'Could Benefit Bitcoin More'
Trump Now Accepts Crypto Donations: America’s First Bitcoin President
Bitcoin Policy Institute Launches Fund to Defend Non-Custodial Tools
Bitcoin ETPs Approved for London Stock Exchange Listing
Paraguayan Authorities Confiscate Nearly 400 Bitcoin Mining Machines
Marathon Digital Partners with Kenya to Invest in Green Energy Projects
Public Bitcoin Miners Secured $2B in Financing Ahead of Halving
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Bitcoin Price
Crypto is up this week, with BTC being up 1.8% and ETH up 22.2%:
Bitcoin dominance has decreased this week, falling from 52.42% to a trough of 50.13% and ending at 50.5%. The recent ETH rally has already impacted Bitcoin's market dominance. This shift causes Bitcoin's dominance to decrease, a trend observed over the past few days.
It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.
The recent approval of spot ETH exchange-traded funds (ETFs) by U.S. regulators challenges Bitcoin's (BTC) 18-month dominance uptrend, sparking speculation about a new "altseason."
Despite this significant milestone, both Bitcoin (BTC) and Ether (ETH) experienced a 3.5% decline on the day of May 24, trading at $67,000 and $3,670 respectively. The muted market response is attributed to the delay in the ETFs becoming tradable, as further preparations are expected to take several weeks, possibly launching by mid-June.
With BTC dominance decreasing and the ETH price decreasing less than BTC, the BTC/ETH ratio is trending downwards to 18.20 ETH per BTC.
Financial News
A significant regulatory shift in the United States has sparked a new bullish trend for Bitcoin (BTC), positively impacting the altcoin market. Recently, several Congress members urged SEC Chair Gary Gensler to approve spot Ethereum (ETH) ETFs. Additionally, the US Congress almost unanimously passed the FIT21 bill, which clarifies cryptocurrency regulations in the country.
According to the latest on-chain data, Bitcoin whales with balances between 1,000 and 10,000 BTC have accelerated their accumulation in recent days. These whales have added 20,000 BTC, worth about $1.4 billion, in the past week. This surge in accumulation coincides with significant cash inflows into spot BTC ETFs, which have attracted about $1.7 billion in the past eight days.
Following the fourth Bitcoin halving over a month ago, demand for Bitcoin is expected to rise as various jurisdictions seek to accumulate the limited digital asset. Bitcoin has faced strong resistance around $72,000, leading to a retrace below $68,000. Meanwhile, many traders are shifting their focus to Ethereum, anticipating the approval of spot Ether ETFs.
BlackRock's IBIT saw a surge in inflows on Tuesday, May 21, totaling $290 million. This amount exceeded the combined inflows of the past 21 trading days. The IBIT, accounting for 95% of the total inflows into US spot Bitcoin ETFs, contributed to the $300 million net inflows for these ETFs on the same day.
The inflow into BlackRock's ETF marks the highest since April 5, reversing a trend of minimal inflows observed over the past six weeks. The total inflow over the past four trading days has surpassed $1 billion amid Bitcoin's volatile rally. Despite discrepancies in reported assets under management (AUM), the BlackRock fund has accumulated $16 billion in inflows since its launch.
MicroStrategy founder Michael Saylor has shifted his stance on spot Ether exchange-traded funds (ETFs), now asserting that the recent approval from the U.S. regulator is positive news for Bitcoin as well.
“Is this good for Bitcoin or not? Yeah, I think it’s good for Bitcoin. In fact, I think it may be better for Bitcoin because we are politically much more powerful, supported by the entire crypto industry,” Saylor told Bitcoin podcaster Peter McCormack on the May 25th episode of the "What Bitcoin Did" podcast.
“They serve as another line of defense for Bitcoin,” Saylor added, following the news that the U.S. Securities and Exchange Commission (SEC) approved eight spot Ether ETFs for listing on May 23rd.
Adoption News
In a press release this afternoon, President Trump announced that his campaign for the White House will now accept Bitcoin donations. This move is likely to intensify tensions with President Joseph Biden, who, along with Democrat Senator Elizabeth Warren (D-MA), has been heavily regulating the digital asset space, particularly Bitcoin, during his term.
The announcement stated, "As President, Donald J. Trump reduced regulations and championed innovation in financial technology, while Democrats like Biden and Elizabeth Warren believe government control is the solution. This effort to reduce government control over financial decisions is part of a shift toward freedom. Today’s announcement reflects President Trump’s commitment to an agenda valuing freedom over government control."
It was noted that Trump's appointment of former Coinbase VP Brian Brooks as Comptroller of the Currency was a pivotal Bitcoin-friendly move, allowing banks and financial firms to hold cryptocurrencies. This ruling took effect during the last year of Trump’s first term, and Bitcoin's price surged twentyfold in the following year.
The Bitcoin Policy Institute (BPI) has launched the Peer-to-Peer Rights Fund to protect decentralized Bitcoin tools and their developers from regulatory overreach. The fund's first project is defending Keonne Rodriguez and William Lonergan Hill, founders of Samurai Wallet.
The Peer-to-Peer Rights Fund aims to maintain Bitcoin’s decentralized integrity by supporting legal cases and offering regulatory guidance. BPI emphasizes that Bitcoin's success relies on its peer-to-peer foundation, which sets it apart from other electronic cash systems. Non-custodial tools like multi-signature wallets, Lightning Service Providers, and Coinjoin coordinators are crucial for security, low-cost transactions, and privacy.
However, recent regulatory actions in the U.S. have targeted developers of non-custodial tools such as Tornado Cash, Samurai Wallet, Uniswap, and MetaMask. These actions threaten to set legal precedents that could harm the non-custodial Bitcoin ecosystem. The government’s broad interpretation of regulations could require anyone facilitating fund transmission, regardless of control, to comply with the Bank Secrecy Act. This could impact developers of various non-custodial Bitcoin tools, including hardware wallets and transaction-broadcasting nodes.
The UK's Financial Conduct Authority (FCA) has given the green light to asset manager WisdomTree, allowing them to list Bitcoin and Ethereum exchange-traded products (ETPs) on the London Stock Exchange (LSE). Starting May 28, WisdomTree's Physical Bitcoin ETPs will be available for trading, initially targeting professional investors. This approval follows the FCA's decision in March to no longer oppose Bitcoin ETP listings for professional investors, aligning with similar approvals in the US and Hong Kong earlier this year.
WisdomTree highlighted that it's among the first firms to secure FCA approval for its Bitcoin ETP prospectus, indicating a change in the regulator's stance since banning such offerings in 2020. While the US and Hong Kong have warmed up to regulated Bitcoin funds, the FCA remains cautious and plans to maintain the ban on retail investors. This shift reflects the increasing adoption of Bitcoin ETFs, even among traditional institutions. Recent SEC 13F filings reveal major banks and financial giants have invested heavily in US spot Bitcoin ETFs.
Mining News
Authorities in Paraguay have confiscated nearly 400 Bitcoin mining machines in the city of Sapucai. This operation was a collaborative effort between the police and the National Electricity Administration (ADE), targeting suspected electricity theft.
Previously, the Paraguayan government urged lawmakers to pass a bill imposing up to 10 years of imprisonment on illegal Bitcoin miners to combat the significant electricity theft impacting the National Electricity Administration (ANDE). The proposed legislation grants Paraguayan police and prosecutors the authority to seize and sell illegal mining equipment to safeguard ANDE from substantial economic losses due to energy theft.
This week, Bitcoin (BTC) mining company Marathon Digital (MARA) finalized a deal with Kenya's Ministry of Energy and Petroleum to enhance the country's energy infrastructure through investments exceeding $80 million. The partnership aims to "monetize underutilized energy across Kenya and jointly develop technology projects," stated Marathon CEO Fred Thiel.
Public Bitcoin mining companies bolstered their balance sheets in preparation for the recent halving event in April. BlocksBridge Consulting’s analysis of financial earnings from 12 public miners revealed that ten of these companies collectively raised $2 billion in gross proceeds through equity financing activities, anticipating a post-halving drop in profitability. This same group secured $1.25 billion in the last quarter of 2023.
Marathon Digital, CleanSpark, and Riot Platforms were the leading companies in capital raising during the previous quarter, securing 73% of the total funds. By the end of March, Marathon, CleanSpark, and Riot collectively held $1.33 billion in cash and over 32,200 BTC, valued at more than $2.2 billion.
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