Crypto News Highlights (19th February to 23rd February 2024)

• Bitcoin ETF Trading Hits Over $50 Billion in Volume
• Retail Investors Drove Crypto Market Rally in February, JPMorgan Report Suggests
• eBay Cuts 30% of Web3 and NFT Staff
• Reddit Reveals Bitcoin and Ether Holdings in IPO Filing
• Do Kwon of Terraform Labs to Face Extradition to the U.S.
  

Bitcoin ETF Trading Hits Over $50 Billion in Volume

The trading volume of new spot Bitcoin exchange-traded funds (ETFs) has surpassed $50 billion as of Thursday, February 22, 2024. This milestone comes six weeks after regulatory approval was granted to ETFs from BlackRock, Fidelity, Bitwise, and others by the Securities and Exchange Commission.

The cumulative trading volume of spot Bitcoin ETFs has risen from $28.3 billion at the beginning of the month to $50.5 billion by the end of trading on the mentioned date. This increase was supported by a high trading volume of over $2.5 billion on Tuesday.

On Thursday, the trading volume for spot Bitcoin ETFs reached $1.2 billion, with BlackRock's IBIT leading at $457.2 million, followed by Grayscale's GBTC and Fidelity's FBTC at $348.8 million and $255.7 million, respectively.

Grayscale's GBTC, which has a higher fee, has seen a decline in market share from 50.5% to 28.6% since the launch of spot Bitcoin ETFs on January 11, with daily outflows contributing to this trend. Meanwhile, BlackRock's IBIT has gained market share from 22.1% to 37.4%, and Fidelity's FBTC holds a 20.9% market share.

After experiencing net outflows on Wednesday for the first time since January 25, spot Bitcoin ETFs recorded net inflows of $251.4 million on Thursday.

Excluding Grayscale's converted GBTC fund, the nine new spot Bitcoin ETFs collectively hold nearly 300,000 BTC, valued at around $14 billion. In contrast, assets held by Grayscale's GBTC have declined by over 25% from around 619,000 BTC on January 11 to 454,660 BTC ($24 billion) as of the mentioned date.

Retail Investors Drove Crypto Market Rally in February, JPMorgan Report Suggests

According to a research report by JPMorgan released on Thursday, retail investors likely played a significant role in the strong rally of the crypto market in February. Over the last 30 days, the world's largest cryptocurrency, bitcoin (BTC), surged by 30%, while the Coindesk 20 index rose by 24%, as per CoinDesk indices data.

JPMorgan identifies the revival of "retail impulse" as a key factor behind this rally, driven by anticipation of three main crypto catalysts in the upcoming months: the bitcoin halving event, the next major upgrade of the Ethereum network, and the potential approval of spot ether ETFs by the SEC in May. While the first two catalysts are already largely factored into the market prices, the bank only sees a 50% likelihood of the third.

The report highlights the increased participation of retail investors, evidenced by larger flows from smaller wallets in on-chain cumulative bitcoin flows, which serve as a proxy for retail investor involvement. Retail-focused platforms such as the Block, PayPal, and Robinhood experienced heightened trading activity and investor flows in the fourth quarter of 2023.

eBay Cuts 30% of Web3 and NFT Staff

Reports suggest that eBay has laid off more than 30% of its staff in the Web3 division, indicating a possible reassessment of its NFT and Web3 strategy.
Sources reveal that employees associated with Web3 operations have departed from eBay recently,

This restructuring follows eBay's acquisition of Manchester-based NFT marketplace KnownOrigin in June 2022, which integrated KnownOrigin's team and technology into eBay's Web3 division. Prior to this acquisition, eBay had partnered with OneOf, a Web3 company focused on music NFTs. Additionally, eBay acquired TCGplayer for $295 million to bolster its digital collectibles business.

The departure of Stef Jay, eBay's business and strategy officer for the Web3 division, and the reported redundancy of David Moore, a founder from KnownOrigin, hint at internal shifts within the company. However, it remains unclear whether Moore's redundancy was an isolated case or part of a broader restructuring.

According to sources, eBay's relationship with KnownOrigin soured, leading to eBay halting its plans for NFTs and other digital collectibles on its platform.

While the NFT market has seen fluctuations due to the crypto bear market, recent collections like Pudgy Penguins, Mutant Ape Yacht Club, and others have sparked renewed interest. Bitcoin Ordinals introduced in mid-December have also gained traction. Forbes data indicates that the global NFT market cap has reached approximately $50 billion, with a $46 million trading volume this week

Reddit Reveals Bitcoin and Ether Holdings in IPO Filing

In its filing with the U.S. Securities and Exchange Commission (SEC) to go public on the New York Stock Exchange under the ticker symbol “RDDT,” Reddit disclosed that it has invested some of its excess cash in bitcoin (BTC) and ether (ETH), joining the ranks of companies like MicroStrategy and Tesla.

The social media platform also mentioned that it acquired ether and Polygon (MATIC) as payment for certain virtual goods sales. Reddit hinted at continuing this strategy in the future but did not specify the quantity of tokens it holds, stating that the net carrying value of the digital assets was "immaterial."

The decision to invest in cryptocurrencies and experiment with blockchain technology was highlighted in the filing, with Reddit acknowledging potential exchange risks and additional tax, legal, and regulatory requirements associated with these assets.

After a lengthy process with regulators, Reddit expects to start trading publicly in March, with co-founder Steve Huffman emphasizing the company's mission to empower its users and strengthen its community-driven platform. The filing revealed that Reddit recorded $804 million in sales in 2023, a significant increase from the previous year, and currently holds $1.6 billion in assets, including $1.3 billion in cash.

Do Kwon of Terraform Labs to Face Extradition to the U.S.

Terraform Labs' co-founder, Do Kwon, is set to be extradited to the U.S. to face fraud charges related to significant losses suffered by U.S. investors associated with the Terra stablecoin.

The decision to extradite Kwon to the U.S. was made by the High Court in Montenegro, rejecting South Korea's extradition request for the former executive. This decision was reported by the local media site Pobjeda.

Kwon's extradition was initially approved by a court in Podgorica late last year. He was arrested in Montenegro in March 2023 for using a counterfeit passport while attempting to leave the country. At that time, Kwon had agreed to be extradited to South Korea.

In June, a Montenegro court sentenced Kwon to four months in prison for document forgery. Despite appealing this decision, Kwon lost the appeal and was sentenced to serve four months in jail.

Kwon also faces civil charges from the Securities and Exchange Commission (SEC), alleging that he and his company raised billions from investors through the sale of crypto asset securities, many of which were conducted without proper registration.

The jury trial for the fraud claims against Kwon was postponed from January 29 to late March after his lawyer cited difficulties in securing his release from Montenegro.

Disclaimer:  The information provided in this crypto news round-up is for informational purposes only and should not be considered financial or investment advice. Obiex will not be held liable for your investment decisions.