Market Update & Industry News - Week ending 27 December 2024

🔷.BlackRock’s iShares Bitcoin Trust ETF (IBIT) remained ahead of its own iShares Gold Trust (IAU) in net assets value despite a week of outflows and profit-taking. The fund’s AUM now stands at around $52Bn with the total spot Bitcoin ETF market cap at approximately $110bn.

Appold view: The ETF has been a considerable success for BlackRock this year. It now has double the AUM of its closest rivals, Fidelity Wise Origin Bitcoin Fund and Grayscale Bitcoin Trust (Btc) ETF, which have a market cap of around $19bn each. This will remain the dominant Bitcoin ETF for a long time.

🔷 ETF issuer Bitwise Asset Management filed a US SEC filing for an ETF designed to track large-cap companies holding at least 1,000 Bitcoin on their balance sheets. The initiative aims to provide investors with indirect exposure to Bitcoin through equities, focusing on businesses that are significant digital asset holders.

Appold view: With the spot BTC market saturated with competition, ETF issuers are looking for niche products to attract AUM. How effective this will be in tracking BTC market beta is questionable, as most of these companies are not adopting a MicroStrategy-type BTC accumulation strategy but are focused on running a product business. It will be interesting to see the actual market interest in this.

🔷 Stablecoin issuer Tether.io announced its first digital asset venture capital investment by contributing $2 million to Arcanum Capital’s Emerging Technologies Fund II, a tokenised vehicle focusing on decentralised Web3 projects. This move allegedly aligns with Tether’s strategy to support technologies that enhance financial freedom and resist censorship. 

Appold view: A small investment based on their wealth, but it highlights a potential strategic push to diversify into decentralised technologies. If Arcanum can deliver, it will put them in good stead for a potentially more significant investment. 

🔷 The co-founder of Terraform Labs has been approved to be extradited from Montenegro to the United States over allegedly orchestrating a multi-billion-dollar digital asset fraud involving TerraUSD and Luna Tokens. This follows accusations that Mr Do Kwon misled investors about the stability of the tokens, which collapsed in 2022, triggering significant losses in global digital asset markets.

Appold view: Tens of billions were reported to have been lost following the collapse in 2022, accompanied by allegations of fraud and the disappearance of the Do Kwon. It caused much negative press for the industry, although it helped accelerate regulatory oversight and transparency. A trial will follow, and justice will be served. 

#Marketwatch #Blockchain #Investments