Our experts tell how the launch of ETF on Bitcoin by investment giant BlackRock with $9 trillion in assets may affect the global crypto market

One of the world’s largest investment firms, BlackRock, is about to launch an exchange traded fund (ETF) for bitcoin. This is an important step for the market due to BlackRock’s reach. And also because the fund will allow investors to buy Bitcoin as ETF shares from a regular brokerage account.

In a filing with the U.S. Securities and Exchange Commission (SEC), the company asked for permission to sell the currency through a mechanism called the iShares Bitcoin Trust. It will be a spot fund. That is, buying its shares would involve actually buying coins on the market. It will also make it easier for institutional investors, including pension funds, to own cryptocurrency. As of the end of March, BlackRock had more than $9 trillion under management.

Bitcoin Trust and Spot Bitcoin ETF are products that track the real price of Bitcoin. Their point is to give investors access to BTC through a regulated and familiar product. While not actually owning Bitcoin.

Futures-based exchange-traded funds differ from spot funds in that they offer investors access to futures contracts rather than to an asset.

When you buy units of a spot fund, unlike futures products, there is an actual purchase of Bitcoin in the market. If big players show interest in such a product, it may have an impact on the price of the asset.

The document states that the price of the asset on the spot market will be formed based on data from the Nasdaq exchange. This is also potentially critical, as the SEC has so far refused to allow Bitcoin ETFs. In doing so, citing fears of market manipulation. The storage of the underlying Bitcoin as a custodian will be handled by Coinbase, the second largest cryptocurrency exchange. Despite the SEC’s sensational lawsuit against the exchange, the regulator’s charges have nothing to do with its bitcoin storage service Coinbase Custody.

There is still no easy and legal way to invest in Bitcoin in the form of traditional stocks

And it is considered an obstacle for large financial institutions, which by law have restrictions on what assets they can hold on behalf of clients. The best-known solution for buying Bitcoin in the form of stocks is now provided by Grayscale Bitcoin Trust. However, shares of this fund are not allowed to be traded on first-tier stock exchanges. But Grayscale does charge a management fee of about 2% per year. While traditional ETFs have a 0.5% fee.

BlackRock isn’t the first to try to launch a bitcoin spot ETF, the first attempts were made back in 2014 by the Winklevoss twin brothers. Grayscale and a number of funds also asked for permission, but were turned down by the SEC. In all, there have been more than 30 attempts to create a spot exchange-traded fund for bitcoin. But all applications have faced regulatory opposition, citing market problems and a lack of investor protection.

Grayscale is suing the SEC over the rejection, and a decision in the case is due to be released as early as this year. Last year, the SEC approved a cryptocurrency ETF, but only for futures markets. It’s a much more complex and expensive product for investors. After the news about BlackRock, rumors started to appear on social media. That its own Bitcoin ETF could be announced by Fidelity, probably through the purchase of Grayscale.

Attitude of BlackRock towards BTC has been changing and there have been many attempts to open ETF funds

Attitudes of BlackRock towards BTC have been changing. Back in 2017, the head of the company Larry Fink called Bitcoin an “index of money laundering. But a year later, he allowed the launch of ETFs on the condition that cryptocurrencies are legalized. Later in 2021, he said Bitcoin could become a means of saving capital. At the same time, the company bought shares in major publicly traded mining companies. And on behalf of clients, it conducted several trades in cryptocurrency futures on the CME exchange.

In 2022, BlackRock began managing about $24.7 billion in reserve funds for Circle, the issuer of the second most capitalized USD Coin Stablecoin (USDC). The company also announced a partnership with Coinbase. In order to provide institutional investors with access to the cryptocurrency through one of its subsidiary services. At the same time, BlackRock announced the creation of a closed bitcoin trust for institutional investors. However, this story did not develop. The announcement page was removed from the company’s website, but is available to view in the online archive.

In March, the SEC rejected VanEck’s application for a spot Bitcoin ETF for the third time. In January, the regulator rejected cryptocurrency exchange traded fund issuer 21Shares for the second time. As well as investment company ARK Investment Management to create a similar fund.

What will be the impact on the price of ETF on Bitcoin

Last August, the head of ARK, Kathy Wood, suggested in a video for clients that the entry of large investment companies into the cryptosphere could significantly boost Bitcoin. Companies that want to invest in cryptocurrencies typically allocate about 2.5 percent of their portfolio to them, she said. In the case of BlackRock, this amount could be about $1 trillion, which, she estimates, could lead to at least a two-fold increase in the price of BTC.

Our experts say that taking into account the fact that there are only about 3 million really liquid Bitcoins in the market. Then, given the demand for $ 1 trillion, this rate increase is not the limit. Also Kathy Wood is known for repeated purchases of Coinbase (COIN) shares for millions of dollars. And probably bets on their growth, including due to the partnership of the exchange with BlackRock in the case of approval of the ETF.

Our expert analyzed the situation on the crypto market with BTC and told how it can change in the short term

On Sunday, Bitcoin was trading in plus (+2.38%), and the price reached $26,839. The beginning of last week was not easy for BTC due to worries about lawsuits against cryptocurrency exchanges Binance and Coinbase. However, after the release of U.S. inflation data in May, risk appetite increased in the markets. Investors were estimating a rate hike at the June 14 meeting with more than 90% probability, which was fully justified. The interest rates were left unchanged in the range of 5.00-5.25% per annum.

Despite the noticeable decline in BTC quotes. Which were caused by SEC lawsuits. As well as reduced liquidity in the market, Bitcoin began to strengthen on June 15 in the U.S. session. On Friday (June 16), the BTC/USDt pair rose 2.92% to $26,345. Active growth in stock indices and the collapse of the U.S. dollar at the beginning of the week also supported the growth of Bitcoin and altcoins. On Saturday (June 17), the rise in quotations continued to $26,839.

Technical analysis and conclusions

According to the technical analysis, the upward movement has a truncated formation with three tops. The correction after such a pattern reaches 62% of the growth. And that in this case is $25,600. However, at the beginning of the move, the truncated pattern could become a running correction in the direction of the move. And that could accelerate the rise. To break through the downtrend line and lock in a bullish signal. Then the buyers need to break through $27,500.

Important Events

Our experts note that in the U.S., June 19 is Juneteenth, which is a federal public holiday. Many major exchanges, such as the New York Stock Exchange and NASDAQ, work a reduced schedule on that day. And this could be an opportunity for buyers.

Two speeches are scheduled this week by J. Powell, head of the U.S. Federal Reserve. The FOMC officials will also make speeches. Their thoughts about continued high inflation and a new rate hike in the coming meetings may rock the markets and reduce risk appetite. It is unclear what the SEC’s head of exchanges will say.

Friday’s comments from two Fed officials dampened optimism that an aggressive interest rate hike is over. Fed Governor Christopher Waller said that core inflation is not declining as much as he expected. Richmond Federal Reserve President Thomas Barkin expressed satisfaction with further rate hikes. And that’s given that inflation has not yet reached the obvious level of a return to 2%.

In terms of voters, the spread is roughly as follows: two FOMC members think the current rate level (5.25%) is appropriate for the end of the rate hike cycle. And four officials see another 25 bps increase as appropriate. And the other 12 see at least two more raises of 25 bps.

Fed Chairman Jerome Powell said at a press conference Wednesday that no decision has been made on the upcoming Fed meeting in July. But many investors and analysts expect rate hikes to resume.

Thus, the situation in the cryptocurrency market remains uncertain. And price movements depend on many factors, including regulation, economic data. As well as news from the industry and price movements in the forex and stock market. Therefore, investors should continue to monitor the news and act with caution when making investment decisions.

The head of Binance said that the cryptocurrency exchange will donate $50,000 to support ZachXBT, a famous “detective” in the blockchain community

A famous crypto detective nicknamed ZachXBT collected more than $1 million from subscribers in two days to cover legal expenses. On the evening of June 16, he announced that he had been sued for defamation. And published an address for donations for his legal expenses.

ZachXBT wrote on Twitter that he was being sued by Jeffrey Huang, also known as Machi Big Brother. The plaintiff claims that the crypto detective slandered him in a 2022 article. When the detective claimed that Huang stole 22,000 ETH from the cryptoproject Formosa Financial.

Both contributors are well-known opinion leaders in the English-language cryptocurrency community. ZachXBT has released dozens of investigations into major manipulations by cryptoprojects or Influencers. Who have been seen promoting fraudulent assets. Some of his revelations have formed the basis of law enforcement investigations. And which have led to arrests or fines for proven fraud.

Jeffrey Huang is an NFT Influencer known for multi-million dollar deals to buy images from popular collections. Also according to an investigation from a detective, Huang made a fortune from advertising fraudulent crypto projects. Huang demanded that ZachXBT retract the material and remove it. ZachXBT claimed that “the claim is unfounded and an attempt at censorship, and he intends to fight for freedom of speech.”

ZachXBT compared the case to the story of David and Goliath.

While pointing out that Huang is rich and “uses his capital to silence ZachXBT.” ZachXBT wrote that he himself is not so rich. And asked subscribers to help cover his legal fees, which he said could exceed $1 million.

Also he published an address for donations. On the evening of June 16, it had about $57,000 in cryptocurrency, according to The Block. As of June 19, the amount of cryptocurrency funds sent to the cryptocurrency address over the weekend exceeded $1 million. He began withdrawing them to the Uniswap exchange.

Changpeng Zhao, head of Binance, decided to support ZachXBT and wrote that the cryptocurrency exchange would send him $50,000. Following Zhao in the comments, various cryptoprojects started tagging him, reporting their donations and wishing him good luck. Our experts note that no one should stand aside and should support ZachXBT. As he is doing a very important job that not everyone can do and now at a difficult time the crypto community should give their support.

Amid negative news for the crypto market, decentralized trading platforms are seeing large sales of the leading “stablecoin” USDT from Tether

The largest by market capitalization, Tether’s USDT stablecoin has come under pressure. The coin, which is nominally pegged to the U.S. dollar, temporarily lost parity with it.

The leading stablecoin fell slightly below $1. This came after the Curve decentralized platform’s 3Pool liquidity pool suffered a major asset imbalance. 3Pool is the third largest trading pool of all existing decentralized exchange (DEX) trading platforms (DeFi). And the largest in terms of the amount of stablecoins in it USDT and DAI. At the time of publication, USDT is at $0.999, according to CoinMarketCap.

Curve and Uniswap are the largest decentralized financial protocols for exchanging and trading cryptoassets. Which operate on the basis of software-based smart contracts without a central intermediary (e.g., an exchange).

A liquidity pool is a smart contract containing locked tokens that have been provided by platform users. And acting as an automated market maker on a decentralized exchange

Against the background of the latest news about tough actions of American regulators in relation to major market players, the panic among market participants is quite understandable.

However, the loss of USDT parity with the dollar is caused more by the actions of specific individuals in the liquidity pools of DeFi-platforms.
Our experts note that this happens not for the first time. And earlier it turned out to be a provocation [of market participants] in order to make quick money on opening the necessary position. And manipulations in DeFi were the starting shot.

As Ardoino wrote in a commentary to The Block, “The market as a whole is very tight right now.” He said recent news is pushing big players to exit the cryptocurrency markets. “Tether is a gateway for liquidity, both inbound and outbound. When interest in cryptocurrencies rises, we see an influx. And when the mood in the cryptocurrency market is negative, we see an outflow. But we can’t rule out a direct attack on Tether, as we saw in 2022,” adds Ardoino.

BlackRock Investment Company decided to create a spot exchange product based on cryptocurrency. And this despite numerous refusals by the regulator to register such funds

iShares, a division of BlackRock Investment Company, filed documents with the U.S. Securities and Exchange Commission (SEC) to register the iShares Bitcoin Trust. The trust’s units, if approved, will trade on NASDAQ.

BlackRock is one of the largest investment firms in the world and the largest in terms of assets. And it manages about 1,000 funds with assets totaling more than $9 trillion (as of the end of March). The company also manages about $24.7 billion in reserve funds for Circle, the issuer of the second most capitalized USD Coin Stablecoin (USDC).

Bitcoin Trust and Spot Bitcoin ETFs are products that track the real price of Bitcoin. Their point is to give investors access to BTC through a regulated and familiar product. And without actually owning Bitcoin.

Futures-based exchange-traded funds differ from spot funds in that they offer investors access to futures contracts rather than to an asset.

When you buy units of a spot fund, unlike futures products, there is an actual purchase of Bitcoin in the market. If big players show interest in such a product, it may have an impact on the price of the asset.

The assets of iShares Bitcoin Trust consist mainly of Bitcoins. And the custodian of which will be Coinbase, the company said in a statement. The Bank of New York Mellon will hold the trust’s cash.

The trust could be the first Bitcoin-based spot exchange product in the U.S. According to Bloomberg, this is at least the 33rd attempt by issuers to create a spot product based on VTCs. Previously, all applications were rejected by regulators. And which cited, among other things, the problems of the crypto market and the lack of investor protection.

In January, the SEC rejected cryptocurrency exchange traded fund issuer 21Shares and Katie Wood’s investment firm ARK Investment Management for the second time to create a spot bitcoin ETF. In March, regulators rejected VanEck’s application for a spot bitcoin-ETF for the third time.

At the same time, exchange-traded funds (ETFs) based on Bitcoin futures were getting SEC approval. The first was the Bitcoin Strategy ETF from ProShares. And its shares became available to investors on the New York Stock Exchange in October 2021.

Our experts note that back in 2022, SEC head Gary Gensler explained. That applications for spot funds do not meet the standards of the Securities Act, so they are rejected by the commission.

The most expensive NFT piece of art The Golden Goose from a bankrupt hedge fund’s collected tokens went under the hammer for twice as much as expected

An NFT called Ringers #879, or The Golden Goose, from the GRAILS collection of the bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC) was sold at a Sotheby’s auction for $6.2 million.

The digital piece by Canadian Dmitry Chernyak was bought by hedge fund 3AC for 1.8 thousand ETN ($5.6 million at the time of purchase) in August 2021. It was the most expensive NFT in the fund’s collection.

The auction house expected the Golden  Goose to sell for $2-3 million. But the NFT went under the hammer for $5.4 million. Including commissions, the total was over $6.2 million.

NFT’s collection, assembled by 3AC, is up for sale as the fund’s liquidators try to raise funds to reimburse creditors. Hedge fund Three Arrows Capital filed for bankruptcy last July. It suffered losses during the collapse of the Terra ecosystem. And it ran into problems after the closure of cryptocurrency lender Celsius Network.

Other famous NFTs from the GRAILS collection sold at auction were Autoglyph #218 by Larva Labs. Which sold for $330k, Tyler Hobbs’ Fidenza #479 went for $622k. As well as Fidenza #216 – for $609 thousand Chromie Squiggle #1780. Eric Calderon, founder of Art Blocks, sold for $635,000, more than three times its estimate before the auction.

Our experts note that earlier Sotheby’s announced that the series of sales of GRAILS will begin in May and will continue throughout 2023. The collection will be released in pieces that will be displayed in several locations around the world.

The dominance of Bitcoin has increased as investors avoid investing in altcoins due to pressure from U.S. regulators

The Bitcoin stake in the cryptocurrency market has reached its highest point since October 2021. According to CoinGecko, Bitcoin Market Cap Dominance increased to 46% for the first time in 20 months. This suggests investors are being more cautious about other cryptocurrencies.

In early June, the U.S. Securities and Exchange Commission (SEC) named a number of cryptocurrencies as unregistered securities in lawsuits against crypto exchanges Binance and Coinbase. The decision led to a sell-off of these assets by market participants.

The SEC named several cryptocurrencies as securities in its lawsuits.

In the first case they were Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS) and COTI (COTI).

In the second lawsuit Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP), NEAR Protocol (NEAR), Voyager VGX (VGX), Dash (DASH) and NEXO (NEXO) were added to them.

BTC is treated as a commodity by U.S. regulators. And that has helped it not drop in value as much as the altcoins that have been labeled as securities have.

Our experts note that BTC rate fluctuates around the mark of $25,000+ , the first cryptocurrency lost 5.7% in price last week. Altcoins fell in price more: Solana fell in price by 22.9% in 7 days, Polygon – by 23.3%, Cardano – by 20.9%.

However, the price of Bitcoin a few days ago fell below $25,000

Bitcoin price on June 14 fell below $25 thousand and updated the minimum for 3 months. BTC within an hour fell by $1 thousand – from $25.87 thousand to $24.87 thousand. The last time the first cryptocurrency was traded at this level on March 16.

The Fear & Greed Index also fell from 46 to 41 out of 100, moving deeper into the fear zone. This index also updated to a three-month low. And the last time it was below 41 on March 12 (33 points).

Our experts have analyzed the cryptocurrency market and named profitable assets for long term investments

Neither the stock market, much less the cryptocurrency market, can grow when liquidity is withdrawn from the system. As of this week, the U.S. Treasury Department has begun to withdraw liquidity. And the U.S. Federal Reserve (Fed) continues to clear the balance sheet as part of QT (quantitative tapering).

When the U.S. Treasury Department raises the public debt ceiling. Then the government can borrow more money in the financial markets to cover its spending. As a result, the volume of government bonds increases. And other debt instruments issued by the Treasury Department.

The U.S. Federal Reserve (Fed) clears its balance sheet by conducting open market operations. This means. That the Fed sells financial assets, mostly government bonds and mortgage-backed securities.

It turns out that liquidity in the markets is decreasing. And that means assets like stocks and cryptocurrencies simply have nothing to grow on. Add to this the negative news related to the SEC’s fight against cryptocurrencies. And also answer yourself the question after that: “What should the crypto market grow with right now?”

So the best thing a crypto investor can do is to buy Stablecoins and wait for more interesting entry points into the market. It is equally important to keep a close eye on the further actions of the Fed and the U.S. Treasury.

Additional idea of long-term investments

All of the above provides excellent opportunities for long-term purchases of time-honored assets such as Dash (DASH).

Dash is a decentralized payment system with support for private and fast transactions. Dash is a modified fork of Bitcoin. And it uses both mining and stacking to issue new coins.

Unlike popular “memcoins” and outright scam tokens. Dash cryptocurrency has been around since 2014. And its developers have never been caught in any suspicious activity. And unlike the vast majority of coins on the market. Dash, judging by its metrics, has a real decentralized management. For example, only 15% of existing tokens are held by the top 100 holders. But the main reason to buy this coin is revealed by technical analysis (chart).

chart

The coin broke through a historically strong support block order. And that has kept the price from falling lower for more than five years.

Order block in trading is a grouped set of buy or sell orders in a certain price range. That is, it is an area where a large proportion of market participants are interested in buying or selling an asset.

A great amount of liquidity has accumulated under this support and the price has followed it. The whole fall occurs at a very low volume and oversold indicators.

Our experts say that the price is likely to wiggle below this support zone for a couple of months. In order to shake out all the long-term holders of the coin. And then it will break through the long term downtrend (green line) and the price maximum of 2021. Therefore, this coin is worth buying into your portfolio and forgetting for a couple of years.

Disclaimer:

Crypto-Upvotes does not provide investment advice. This material is for information purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.

Thodex exchange founder Faruk Fatih Ozer, who fled Turkey to Albania the day before the crypto platform stopped operating in 2021. Now claims to have traveled to meet with investors

The founder of the now defunct Turkish cryptocurrency exchange Thodex, Faruk Fatih Ozer. Who is accused of embezzling millions of dollars from customer funds, said at a court hearing on July 13. That he is not guilty of fraud. On the contrary, according to Ozer, “he was set up,” reports the Turkish publication Sabah.

Thodex is a Turkish cryptocurrency exchange founded in 2017. In April 2021, its founder Ozer suddenly left the country. And the platform ceased operations. More than 2,000 Thodex customers sued it, alleging fraud and theft of millions of dollars.

The indictment said total losses due to the exchange’s collapse amounted to 356 million Turkish liras ($24 million). As reported by the Turkish news agency DHA, Ozer fled Turkey with about $2 billion worth of customers’ cryptocurrency.

During the investigation, Turkish law enforcement authorities detained 21 people. Also including Ozer’s brother and sister. Employees of the crypto exchange accused of fraud faced prison terms of up to 40,500 years each.

Ozer himself was detained in Albania in August 2022 and extradited to Turkey.

On June 13, he appeared in court, where he said the media allegations and court charges were unfounded and he had not deceived anyone.

“This situation puts a heavy burden on me. The allegations in the media and the indictment are unfounded. I didn’t deceive anyone, I was set up,” Ozer said.

He also said his sister and brother had been illegally imprisoned. Ozer said he was the only one at Thodex who had the right to make decisions.

The defendant also pointed out that the user agreement spelled out. That he was not liable in the event of any damage. And his platform customers were aware of this.

Ozer said he left Turkey to negotiate with investors because he wanted to sell Thodex after losses of 16 million Turkish liras ($677,000) incurred as a result of the hacks of the exchange.

He said he talked to investors – one in Italy and one in the Balkans. But because he was “hampered by panic requests” from exchange customers to buy and sell cryptoassets. So he decided to temporarily freeze the work of the site and put an article on the site about the maintenance of the service.

Our experts note that as a result of the proceedings, the court ruled to cancel the judicial review measures for seven detainees. As well as to continue the detention of the remaining defendants in custody. And to refer the case to the prosecutor of the Republic of Turkey.

In the attack on the account of a cryptotrader on Coinbase, scammers used his personal data. And which they could only get through leaked information

Famous cryptotrader Jacob Canfield became a victim of a complex scam scheme. And with the help of which fraudsters tried to gain access to his account on Coinbase. Suspecting a data breach, he warned other exchange users to change their passwords.

Canfield wrote on Twitter that he first received a text message. And which said that his Coinbase two-factor authentication (2FA) had been changed. Shortly thereafter, he received three phone calls purportedly from Coinbase’s customer support line.

The scammers asked Canfield if he had traveled outside the U.S. and if he had requested a 2FA and email change. He replied that he hadn’t. And then he received a text message canceling the change request.

Canfield’s call was then transferred to “Coinbase security” to verify his account. In order to avoid a 48-hour suspension of transactions. The scammers asked him for a verification code. But Canfield refused to provide it. The cryptotrader’s interlocutor warned that the account would then be blocked for seven days. But he ended up getting angry and hanging up.

“They had my name, my email address and my location, and they sent an email with a confirmation code from help@coinbase.com to my personal email,” Canfield wrote.

He also added that the code the hackers sent was real. And they sent it from their email and logged into Canfield’s account while the conversation was taking place over the phone.

Our experts note that Coinbase responded to the situation and stated that there was no data leak from the exchange. At the same time, crypto detective ZachXBT wrote that other customers of the exchange have been victims of a similar scam before.

“It’s better to reassure yourself and change passwords if you’re a Coinbase customer than regret it later,” Canfield warned users.