Ep. 124 ETF Rising
On this episode of the Unhashed Podcast, we are again joined by Mags, the loud librarian herself, to cover bcash delistings, microstrategy doubling down, Cryptopia's hacks (yes, that's plural), bull market company valuations, Nigeria's bitcoin ban, and the ins and outs of North America's first ETF launch. It gets a little gossipy at the end...we blame Mags for that.
OKCoin is delisting bitcoin cash (BCH), a fork or “clone” of bitcoin, as well as its own fork, bitcoin sv (BSV), both as a way to protect neophyte clients who are trying to buy bitcoin and as a statement of principle. The exchange’s higher-ups decided to scuttle the markets for either coin because they created confusion for new clients who joined OKCoin to buy bitcoin. On top of that, the routine lawsuits and legal threats from Bitcoin SV creator Craig Wright played a hand in the exchange decision to delist both BCH and BSV.
MicroStrategy CEO Michael Saylor said Friday the firm had completed a $1.05 billion debt offering, a raise that will allow the business intelligence company to buy another $1 billion in bitcoin. The raise is part of MicroStrategy’s dual business strategy of developing business intelligence software and also literally just buying as much bitcoin (BTC, -6.63%) as it possibly can. MicroStrategy already has 71,039 of the coins.“MicroStrategy estimates that the net proceeds from the sale of the notes will be approximately $1.03 billion, after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by MicroStrategy,” the company said.
The Cryptopia exchange has reportedly been hacked again, even as it is being liquidated following a previous breach that stole$15.5 million. According to a Stuff report Thursday, a creditor, U.S. firm Stakenet, has been told that about $45,000 in the XSN cryptocurrency had been transferred out of its cold wallet on Feb. 1. Unused since the first Cryptopia hack in January 2019, the wallet is reported to contain crypto assets worth US$1.97 million in total. Liquidator Grant Thornton New Zealand said it hadn't authorized the movement of funds and that it is investigating the incident, according to an email seen by Stuff. Stakenet had not lost funds in the 2019 hack and had been hoping to eventually receive all its assets back. “If this unauthorized transaction has happened under Grant Thornton’s watch then they need to explain to the users why they failed to secure ... [the] assets like they were supposed to do and how someone was able to access them,” the company told Stuff. The news comes soon after Grant Thornton finally started allowing former users of the exchange to enter claims to retrieve their assets.
High-end bitcoin brokerage River Financial raised $17.3 million in a recent equity sale, according to documents filed with the U.S. Securities and Exchange Commission (SEC) Thursday. Form D filings reveal two-year-old River aims to raise nearly $500,000 in additional funding for a total of nearly $17.8 million. The firm reported 34 backers in its latest filing but none of them were known at press time. It was not immediately clear if the $17 million figure includes funds from the $5.7 million seed round River completed last July with backing from Castle Island Ventures, Slow Ventures and a slew of other VCs. Partners at those firms did not respond to multiple CoinDesk inquiries. Software job postings indicate River intends to build new services for its iOS app, and is considering taking steps to bolster account security and develop “novel performance reporting features,” projects it offers as examples to prospective hires. River serves deep-pocketed bitcoin investors and has in the past insisted it manages a “brokerage” service, not an exchange. It is seeking to refine that white-glove offering already available 32 U.S. states, as evidenced by the client operations analyst position.
The first bitcoin exchange-traded fund (ETF) to receive regulatory approval in North America has already demonstrated the market’s huge appetite for such a product. The Purpose Bitcoin ETF (ticker: BTCC), brought to market by Purpose Investments earlier this week, traded $80 million worth of shares in its first hour and $200 million in its first day — a figure that’s ten times greater than that of the average ETF and broke records in Canada, according to Bloomberg senior ETF analyst Eric Balchunas. In its second day on the market, BTCC traded $350 million in shares, which was three times more than any other ETF. Typically and ETF has a drop off on the second day of trading. While BTCC is the first bitcoin ETF to hit the North American market, it will not be the last. Ontario regulators approved a second bitcoin ETF from Evolve Funds Group this week. And bitcoin custodian NYDIG recently submitted a regulatory approval filing to offer a similar bitcoin ETF product in the United States.
Last Tuesday, Shenzhen, China-based sports lottery site 500.com announced the acquisition of major Bitcoin mining pool BTC.com from Blockchain Alliance Technologies Holding Company via a share-swap agreement. Blockchain Alliance is operated by BitDeer, which itself is chaired by Jihan Wu, the co-founder of bitcoin mining giant Bitmain. The terms of this purchase agreement include 500.com using 10 percent of its own outstanding shares to execute it, according to the announcement. The terms also outlined additional share issuances based on the performance of BTC.com businesses. According to BTC.com mining pool data, it is currently the fourth-largest pool by block validation, contributing just over 10 percent of the total network hash rate over the last three days. As of the time of this writing, BTC.com maintains a hash rate of 15.36 exhahashes per second across that timeframe. This news comes hot off the heels of 500.com’s announcement in early February that it is purchasing 15,900 bitcoin mining rigs. This is rapid advancement for the online gambling company, which only just announced its intention to enter the blockchain space in January.
As reported by Ahyke Otutubuike on Bitcoin Magazine: “You have probably heard the news about the Central Bank of Nigeria (CBN) imposing a ban on financial services for cryptocurrency exchange operators, as well as the incongruent excuses for its action. You may have also heard of several connected controversies, like how it’s linked to the #endSARS protests, aid for which was partly funded in bitcoin. What you probably don’t know, though, is how this is related to the economic shock from the COVID-19 pandemic, the huge arbitrage gap in the naira (NGN) prices across the Nigerian currency market, the decline in Nigeria’s inflow remittances and the emotional tension of individuals whose funds are sadly trapped in all of this.” Ahyke Otutubuike goes on to report how after 12 years of steady increases of remittance inflows, “diaspora remittances declined by 97.3 pe3rcent between January 2020 and September 2020. Coincidentally, cryptocurrency volumes in the country were at their highest during this period.” Ahyke Otutubuike then explains how cryptocurrencies on the black market had been traded at a 20-30% premium compared to official regulated cryptocurrency markets, incentivizing remittances to go through unofficial channels. With the current ban, the main effect will likely be the continued operation of the well-established black markets for cryptocurrency, and Ahyke Otutubuike finishes out the article by pointing out that “what may be most affected is the growth of the blockchain innovation that we were beginning to see in the country before this ban was recirculated.” Ahyke Otutubuike. Ahyke Otutubuike. Ahyke Otutubuike