BITCOIN ETFs

Grayscale Hints at Bitcoin ETF Approval as GBTC Discount Hits Lowest Level in Years

The Scoop: Grayscale CEO Michael Sonnenshein seemed to hint at confidence in the approval of their flagship fund's conversion into a spot Bitcoin ETF.

Gloating in Public: Sonnenshein remarked, "it's been a ten year dress rehearsal. we're ready for the main event," referring to Grayscale's decade-long preparation for converting its flagship fund into a spot Bitcoin ETF.

In Retrospect, It Was Inevitable: The likelihood of the SEC approving a spot Bitcoin ETF seems high, especially after Grayscale's legal success against the SEC earlier this year. Industry voices, including Grayscale's chief legal officer and JPMorgan, suggest approval is now a matter of 'when', not 'if'.

Discount Dwindling: Amidst approval speculations, Bitcoin's price surged by 122% this year. Speculation around the U.S.'s first spot ETF approval and the 2024 halving contributes to this rise. Concurrently, Grayscale's GBTC experienced its lowest discount in years, dropping below 10% yesterday, reflecting growing market confidence in an approval as well.

💰 Digital Assets inflows for the year just surpassed US$1bn so far, with Bitcoin accounting for 96.5% of the total as market sentiment continues to improve.

🚨 Crypto Exchange Poloniex suffered a security breach with over $114 million worth of cryptocurrency stolen. Owner Justin Sun pledged full reimbursement and offered a bounty for the stolen funds' return.

🏦 CME overtook Binance for the largest share of Bitcoin futures open interest contracts. The SEC has cited a lack of a substantial US-based regulated futures exchange for Bitcoin as a reason not to use futures markets as a basis to approve a spot Bitcoin ETF.

🔒 Singapore's Hodlnaut will be liquidated after incurring major losses and having assets frozen on FTX, as decided by the High Court of Singapore and its creditors.

⚖️ In other crypto lending news, Celsius has been given the all-clear from U.S. Bankruptcy Court to exit bankruptcy and begin paying out customers using existing assets and to start a Bitcoin mining business with its existing mining equipment.

💱 Singapore's dtcpay, in collaboration with China-based PlatON and Allinpay, is launching a payment system integrating fiat and crypto like USDT and BTC, highlighting a contrast with China's general ban on crypto transactions.

Cboe to Offer First Spot and Leveraged Derivatives BTC on Same Platform

The Scoop: Cboe Digital announces it will start offering margin futures for Bitcoin from January 11, 2024. This move makes it the first in the U.S. to combine spot trading (buying and selling Bitcoin directly) and leveraged derivatives on one platform.

Innovating Bitcoin Trading: Cboe Digital will introduce margined contracts and leveraged derivatives, allowing traders to bet on Bitcoin's future price without needing to pay the full price upfront. This approach is more efficient for traders who want to increase their exposure to Bitcoin with less cash on hand.

Expanding Bitcoin Market Options: Alongside existing Bitcoin trading, these new futures will add more variety to how people can invest in Bitcoin. Cboe Digital plans to provide detailed margin requirements and risk management information on its website, making these complex financial products more accessible and understandable.

Strong Industry Backing: Major players in traditional finance and crypto markets, like B2C2, Marex, and Wedbush, are supporting this initiative.

Do you think the new IRS rules will happen?

Yes - 24%

No - 76%

👍 Yes: “The blob is becoming more desperate each day. Bitcoin is only the beginning. They want it all.” - Yuri

👎 No: “All of these rules are incredibly unpopular and they probably won’t stand up in court.” - Martin

🇦🇷 Argentina, South America’s second-largest economy, just posted annualized inflation numbers of 142.7% for October. Two-fifths of Argentinians now live in poverty and a recession looms near.

🗳️ Also in Argentinian news, Libertarian Party candidate Javier Milei has edged out Economy Minister Sergio Massa in polling ahead of Sunday’s Presidential runoff election. Milei has promised to abolish the central bank and dollarize the economy.

🇺🇸 Moody's downgraded US credit outlook from stable to negative citing large fiscal deficits and a decline in debt affordability.

📈 Bitcoin Fear and Greed Index hit 72, down from 73 a couple days ago. The index measures how greedy and fearful the market is on a 100-point scale with 100 meaning maximum greed. One month ago, the index was at a fearful 47.

Today’s newsletter was written by Colin and edited by Jordan.