Crypto Daily News from ZBG Exchange
1. Crypto Long & Short: Interest in DeFi Is Surging. You Can Thank GameStop
This week’s congressional hearings, as well as the appearance of new institutional onramps, point to growing investor interest in a new type of capital market.
One of the most iconic moments of the past week was when Keith Gill, otherwise known as Reddit trader DeepF**kingValue, testified in front of the House Financial Services Committee: “I am not a cat.” All who enjoyed the video of the meeting in which a frustrated lawyer struggled with Zoom settings (who among us hasn’t experienced Zoom awkwardness?) immediately knew what he was referring to, and some of us may or may not have spluttered coffee all over our keyboard.
It wasn’t so much the power of memes that made his remark feel important, nor was it just the humor that made us sit up. It was more the deadpan delivery, staring at the screen, addressing some of the most powerful people in the world. To me, it synthesized a loud shift in attitudes toward authority. With that throwaway remark, Mr. Gill demonstrated loyalty to his tribe rather than to the establishment, a sentiment we see playing out not only across social media but also in classrooms, culture, startups and even in the intimidating world of finance.
The surge in value of “anti-establishment” bitcoin (BTC, +0.82%), which broke $1 trillion this week, as well as of meme coins such as Dogecoin, are to a large extent an extension of this. The lack of trust in the establishment’s judgement, and the visible weakening of its influence, make alternatives more viable.
2. Bitcoin Scales $58K for First Time; YTD Gain Over 98%
Another day, another all-time high for the leading cryptocurrency.
Bitcoin (BTC (+0.61%)) on Sunday set a new high water mark of $58,332.36, bringing the leading cryptocurrency’s year-to-date gain to over 100% less than two months into the year. For all of 2020, BTC rose 305%.
At press time, the price settled back to $58,148.31, up 2.3% over the last 24 hours, and cutting the YTD gain to over 98%.
Some are attributing the eye-popping rise to tremendous demand from buyers looking to hedge against inflation as governments keep spending and central banks keep printing money in a desperate effort to keep their economies afloat during the pandemic. Yet despite all the printing and spending of fiat money, the key indicators aren’t reflecting inflation at all
“Through the insatiable buy-side pressure from exchange-traded fund (ETF) issuers, closed-end funds and large public corporations adding bitcoin to their positions, demand is massively outstripping supply,” said John Willock, chief executive at digital asset exchange Blocktane.
The current ramp-up in the price of BTC was ignited earlier this month by Tesla, when the electric-automobile manufacturer said it had purchased $1.5 billion of the cryptocurrency for its treasury. This sparked a round of playing “who’s next?” in terms of investing treasury funds in BTC and the resulting hype helped focus the attention of main street investors on the sector overall.
Some have speculated that the series of all-time highs reached over the last several days is at least partly due to BTC-hungry MicroStrategy, which on Friday morning said it had raised more than $1 billion of debt in order to fund even more purchases of the cryptocurrency. The price of BTC has risen more than $5,000 since the company’s announcement.
3. CI Global Files to Issue North America’s Third Bitcoin ETF
A subsidiary of a firm overseeing more than $230 billion in assets will work with Galaxy Digital on what could be the third bitcoin ETF in Canada.
There could soon be a third Canadian bitcoin exchange-traded fund (ETF). CI Global Asset Management, a subsidiary of a firm overseeing more than $230 billion in assets, filed a preliminary prospectus for the financial instrument, the company announced Friday.
The so-called CI Galaxy Bitcoin ETF (BTCX) would be managed by CI and advised by merchant bank Galaxy Digital. The two firms have previously partnered on the CI Galaxy Bitcoin Fund, a closed-end investment product.
Two bitcoin (BTC, +0.89%) ETFs went live this week, offering investors a way to gain exposure to bitcoin by buying stock, rather than the asset itself. ETF managers purchase an underlying asset on behalf of investors trading on the stock market, for a fee.
The first bitcoin ETF in North America hoovered up $421.8 million worth of assets in its first two days trading, including over 6,000 BTC. BTCX will invest directly in bitcoin, with Galaxy handling that end of the trade and Gemini acting as custodian.
Canadian firm 3iQ also filed a preliminary prospectus for a bitcoin ETF last week.
4. Canada’s First Bitcoin ETF Hits $421.8M AUM in Two Days
One analyst said the ETF could reach $1 billion in assets under management by the end of next week.
The first publicly traded bitcoin exchange-traded fund (ETF) in North America has collected $421.8 million in assets under management (AUM) in two days.
Purpose Investment’s bitcoin (BTC, +0.71%) ETF officially started trading on the Toronto Stock Exchange (TSX) under the ticker “BTCC” on Thursday.
The fund has seen huge interest, trading well over $100 million shares on its first day, and by the end of Friday it had collected $421.8 million AUM.
Bloomberg Intelligence ETFs analyst Eric Balchunas tweeted the Purpose Investment’s bitcoin ETF could reach $1 billion in assets by the end of next week.
On Friday, another bitcoin ETF, the Evolve ETF, started trading on the TSX under the ticker “EBIT” and has $1.271 million AUM.
Both Evolve and Purpose Investment’s bitcoin ETFs have a management fee of 1%.
5. Stripe Names Digital Currency Advocate, Former BoE Governor Carney to Board
Carney has argued for a digital replacement to fiat, amid the U.S. dollar’s waning hegemony.
Former Bank of England governor Mark Carney has joined the board of Stripe, a U.S.-based digital payments company. Carney stepped down from the regulatory perch last year after opening the door for central bank innovation in digital currencies.
“The very nature of commerce has changed over the past decade,” Carney said in a press release. “I look forward to supporting Stripe over the coming years as they build the global infrastructure that enables the internet to become the engine for strong and inclusive economic growth.”
Following the announcement of the Facebook-led Libra stablecoin initiative, since rebranded as Diem, in 2019 Carney called for global leaders to study digital replacements for cash. He noted that the U.S. dollar’s hegemony was waning, though didn’t entirely discount the idea of private currency replacements.
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February 22, 2021