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Cathie Wood’s ARK Invest Files for Another Bitcoin Spot ETF

ARK Investment Management, the firm led by prominent fund manager Cathie Wood, has filed for another spot Bitcoin (BTC) exchange-traded fund – ARK 21Shares Bitcoin ETF. The SEC has until January 24, 2023, to decide whether to approve or reject it.

  • As per the filing with the Securities and Exchange Commission, ARK Invest has included a proposed rule change from the Chicago Board Options Exchange (CBOE) BZX Exchange in its latest application.
  • The main objective of the spot ETF – ARK 21Shares Bitcoin ETF – is to track the performance of Bitcoin as measured by the S&P Bitcoin Index. The applications stated,

“In seeking to achieve its investment objective, the Trust will hold bitcoin and will value the Shares daily based on the Index. The Trust will process all creations and redemptions in-kind in transactions with authorized participants. The Trust is not actively managed.”

  • Despite several physical Bitcoin ETF filings, the SEC is yet to approve even a single one that gives exposure to the price of the cryptocurrency in the spot markets.
  • The latest filing is ARK’s second for a physical Bitcoin ETF. It comes a month after the Commission rejected the investment company’s first attempt.
  • Following the rebuff, Wood asserted that the firm would apply again while adding,

“I find it fascinating they have approved the Bitcoin futures and not the underlying. It just doesn’t make sense to me, especially considering the fees associated with that kind of ETF.”

  • Several other companies, including leading asset manager, Grayscale, have been pressing for a spot bitcoin ETF to be approved, but they are yet to succeed.
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Over $370M Liquidated in a Day as Bitcoin Price Slumps to $28K

The number of liquidated traders has neared 100,000 on a daily scale as the total value of liquidations skyrocketed to over $350 million in the same timeframe. This comes as BTC and the rest of the market have plunged once again.

  • As CryptoPotato reported, the past week or so was quite calm in terms of trading for bitcoin and the altcoins. The primary cryptocurrency stood around the $30,000 mark with a few attempts to overcome that level but to no avail.
  • Each rejection was met with a minor retracement that ultimately drove the asset back down to just under $30,000.
  • However, the situation worsened in the past 24 hours. BTC started dumping hard and just a few hours ago went all the way down to $28,000. This became its lowest price point since the previous massive crash on May 13.
  • The altcoins are suffering even more. Ethereum is 10% down on the day and struggles below $1,800 after touching $2,100 two days ago. Binance Coin is down to $300, while Solana, Polkadot, Avalanche, NEAR Protocol, Chainlink, and quite a few others have declined by double digits.
Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto
  • Somewhat expectedly, this enhanced volatility has caused pain for over-leveraged traders, according to data from Coinglass.
  • The overall liquidations are up to $370 million as of writing these lines on a 24-hour scale. The number of liquidated trades is just shy of 100,000. The most substantial individual loss came on OKX (worth $3 million), and it involved the trading pair – ETH/USDT.
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Turkey Plans a New Bill to Tighten Rules on Crypto (Report)

The Turkish authorities are reportedly working on a draft bill to set up additional control over the local digital asset market. The legislation focuses on crypto exchanges, too, as they should have a minimum of 100 million liras ($6.1 million) in capital to operate on domestic soil.

Regulations on the Way?

Turkey and cryptocurrencies have been a controversial pair in the past few years. On the one hand, the government has displayed a negative stance on digital assets, criticizing their price volatility and their alleged employment in criminal activities. On the other, an increasing proportion of the local population is gradually shifting their focus toward bitcoin and altcoins due to the galloping inflation in the country.

According to a Bloomberg report, the ruling AK Party of President Erdogan will specifically focus on the industry by introducing a crypto regulatory bill in the following weeks. The legislation should grant the officials additional power when monitoring the market. They also contemplate starting taxing individuals who purchase cryptocurrencies. It remains unclear whether this step will be adopted or what the tax percentage will be.

Local digital asset platforms are the primary focus of the draft bill as the authorities believe they should have at least $6.1 million in capital to execute their businesses. Meanwhile, foreign exchanges should establish branch offices that can be taxed in Turkey.

Subsequently, the authorities might provide domestic investors with the option to store their digital asset holdings within the nation’s banking infrastructure to avoid fraudulent schemes.

The upcoming rules will aim to reinforce Turkey’s crypto ecosystem. Last year, the CEO of Thodex (a local exchange with nearly 400,000 clients) – Faruk Fatih Ozer – ran away with up to $2 billion in users’ funds. The platform remained closed for several days, while some rumors indicated that the executive’s hiding spot might be in Albania.

Could Crypto be a Lifeboat for Turks?

The financial condition of Turkey is quite concerning, to say the least. The country’s national currency keeps weakening against the US dollar as the consumer price inflation surpassed 60% at an annual rate.

As such, it is no wonder that some locals started looking for other alternatives to preserve their wealth during times of monetary crisis.

And while gold remains Turks’ favorite choice, Bitcoin and Tether have also emerged as popular trades against the Lira in the past few years. It is worth noting, though, that the government recently urged people to turn their precious metal savings to support the banking system, which could be another reason why more people could shift towards the crypto universe.

Unsurprisingly, MicroStrategy’s Michael Saylor advised Turks to convert their working capital from Lira to USD if they want to “survive” and distribute all their wealth into bitcoin if they want to “thrive.”

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Miami’s Mayor Continues to Receive His Salary in Bitcoin

The mayor of Miami and an outspoken bitcoin bull – Francis Suarez – revealed he still takes his salary in the primary digital asset. However, he explained this is not his only paycheck as others might be paid in fiat currency.

Salary in BTC Despite the Market Crash

The cryptocurrency market has significantly tumbled in the past few weeks. Bitcoin, for one, currently struggles to maintain $30,000 and sits far away from its all-time high last year.

Nonetheless, the negative trend has not changed Miami’s mayor stance on the asset. During a panel at the World Economic Forum in Switzerland, he asserted that he still takes his salary in BTC. On the other hand, the Republican clarified he receives only one of his paychecks this way:

“I will note, for the record, that it’s not my only salary. It’s a different decision than if a person was deciding to take their salary in Bitcoin if it was the only source of income for them.”

Suarez touched upon the Terra fiasco, noting that the price collapse of LUNA/UST has not reflected on his BTC vision. In his view, investing in crypto or investing in tech stocks could be dangerous due to the enhanced volatility of the assets, but one can not profit without taking risks:

“Government has had a tendency over time to try and protect people against losses, and you can’t protect people against losses. That’s the American system. That’s what makes investing. That’s the risk component to winning as well.”

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Francis Suarez, Source: CNBC

How BTC Looks in Suarez’s Eyes

Miami’s mayor is among the strongest proponents of the asset class. Last summer, he disclosed purchasing both BTC and ETH.

A few months later, he became the first American politician to receive his salary in bitcoin. His current annual income as a political leader of Miami is between $150,000 and $200,000, or between 5 BTC and 6.7 BTC.

At the end of 2021, Suarez argued that the digital asset’s biggest advantage is its ability to create a system of exchange where people are not subjected to the “wild inflation and wild devaluation through oftentimes corrupt actors.” According to him, it could “eradicate” communism and democratize people’s choices.

Last month, the mayor said he wishes to see bitcoin integrated into each level of US society:

“We need to make sure we can go into a convenience store and buy a Snickers with a Satoshi.”

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JPMorgan Maintains Bitcoin’s Fair Value Is at $38,000, Predicts 28% Upside Ahead

JP Morgan – one of the largest investment banks on Wall Street –  sticks to its previous fair-value target for bitcoin at $38,000, meaning that the asset is currently being traded with a discount. The bank believes BTC could recover stronger than other beaten-down assets because it had fallen far deeper amid the correction period.

  • JPMorgan maintains bitcoin’s fair value at $38,000, suggesting a potential 28% upside for the primary cryptocurrency, sitting slightly below the $30,000 level.
  • According to the bank’s note published on Wednesday, the Wall Street giant said cryptocurrency is one of its preferred alternative assets over real estate, and it does not fall into the same category as stocks and bonds.
  • The giant’s strategies, led by Nikolaos Panigirtzoglou, consider last month’s market correction similar to what happened in January and February, thus predicting that a relief rally in the crypto market may be just around the corner.
  • As bitcoin is down over 60% from ATH recorded last November, and the total capitalization of all cryptocurrencies plunged from $3 trillion to 1.3 trillion, the bank sees opportunities in the rapidly rising asset class. Since it has been hit harder than traditional assets like private equity and real estate, the bank stated, “there is more room for cryptos to rebound.”
  • Despite the recent catastrophe occurring to Terra’s ecosystem, which may have painted a negative picture of the industry, the strategists, however, noted there is little sign suggesting that VC money has stopped pumping funds into the space.
  • In February, the investment bank set bitcoin’s fair price at $38,000. The figure was based on the premise that BTC is around four times more volatile than gold. Meanwhile, it increased its long-term price target to $150,000 from $146,000.
  • If bitcoin’s volatility could be narrowed three times from its level in February, its fair value could reach $50,000.
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Bitcoin Dormant at $30K While Ethereum Classic (ETC) Pumps 10%: Market Watch

Bitcoin recovered most losses from yesterday’s dip below $29,000 but failed at $30,000 once again. The altcoins have continued to trade sideways with a few notable moves in either direction. Ethereum Classic stands out as the most significant gainer.

Bitcoin Back Below $30K

The primary cryptocurrency has had its issues with the coveted $30,000 line for over a week now. It made several attempts to overcome that line but was met with rejection every single time, which pushed it south by up to a few thousand dollars almost immediately.

The latest such example came earlier this week when BTC pumped to $30,600. The same scenario followed, and the asset plummeted by precisely $2,000 to a low of $28,600.

Nevertheless, the bulls stepped up and drove it upwards once again. For a brief moment, BTC surpassed $30,000 once again but now stands just under it.

As such, its market capitalization has gone back down to $565 billion, while the dominance over the altcoins has increased slightly to 44.7% on CoinMarketCap.

BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

ETC Stands Out

The altcoins have calmed as well recently. Ethereum, for example, has followed bitcoin’s price movements to a large extent. ETH’s major line that it fails to overcome decisively is $2,000.

It jumped above that level two days ago but dipped below it yesterday and has remained there now as well after a minor daily retracement. Ripple, Cardano, Solana, Dogecoin, Avalanche, and Shiba Inu are also slightly in the red.

Binance Coin has sustained above $330 following a minor increase. Tron has jumped the most from the larger-cap altcoins, with a 4.4% pump to $0.08.

While most lower- and mid-cap altcoins are in the red as well, Ethereum Classic has defied the odds with a 10% increase in a day. Consequently, ETC now stands close to $25. The crypto market cap has stalled below $1.3 trillion.

Cryptocurrency Market Overview. Source: Quantify Crypto
Cryptocurrency Market Overview. Source: Quantify Crypto
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Bitcoin’s Bottom Might be Getting Closer According to Analyst

Bitcoin’s price could be getting closer to a local bottom according to at least one on-chain indicator. This comes as the cryptocurrency is trading in a tight range of around $30K for quite a while.

  • The bitcoin price is currently sitting at around 57% below its all-time high reached in November last year.
  • According to one technical indicator – namely, the long-term output profit ratio (LTH-SOPR), the bottom may be getting closer.
  • The LTH SOPR is calculated as the USD value of spent outputs at the spent time divided by the USD value of spent outputs at the created time. In other words – the realized value is divided by the value at the time of creation.
  • Data from CryptoQuant reveals that the current 7-day SMA LTH SOPR sits at 0.72, which means that some of the long-term holders could be selling at a loss.
photo_2022-05-25_07-33-04
Source: CryptoQuant

 

  • The last time the LTH-SOPR dropped to the levels seen recently was back during the COVID crash in March 2020. Back then, however, its value dropped to 0.53, meaning that there might still be some pain ahead.
  • According to the CryptoQuant analyst, this “doesn’t mean the bottom is in but it’s worth observing this metric.”
  • Elsewhere, the cryptocurrency fear and greed index remains in the “extreme fear” territory. The metric is used to gauge the current market sentiment and according to it, investors remain particularly fearful at this time.
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After Adopting Bitcoin, Central African Republic Set to Build a Crypto Hub

A month after adopting Bitcoin as legal tender, the Central African Republic (CAR) announced its first-ever crypto initiative – the Sango Project – designed to attract business and enthusiasts, take the Bitcoin legacy to the next level, and establish a so-called crypto island Sango with the Metaverse-related elements.

An Initiative Set to Attract Investors Worldwide

CAR’s President Faustin-Archange Touadéra tweeted that the new initiative – aiming to turn the country into a crypto hub – carries the potential to reshape its financial system. The president did not provide details regarding when the hub would be made available to investors and how its Bitcoin agenda would be carried out. However, he had reportedly expressed an urgency to launch such a project:

“The formal economy is no longer an option. An impenetrable bureaucracy is keeping us stuck in systems that do not give a chance to be competitive.”

According to the presentation published by the government, the Sango project involves creating a Digital Nation Bank and developing a crypto wallet compatible with layer-two implementations such as the Lightning Network and able to put in use for businesses to accept such payments.

CAR’s “Bitcoin Law” has outlined that all crypto exchanges operating in the country are not subject to taxes. The nation’s legal framework has also ensured that government entities recognize digital identity and ownership. In this way, the government aims to attract crypto investors worldwide.

The initiative stated that the authorities would support crypto firms’ access to the country’s natural resources such as gold, diamonds, and uranium and establish a “citizenship by investment” program with business tax exemptions. Besides, the government will facilitate “land acquisitions in Bitcoin for worldwide investors.”

In addition, the county’s leaders will brand “Sango” as the crypto island, a crypto-economic zone that will link to a virtual metaverse with the same name. The virtual cyberspace – mapped 1:1 to the real-life island – will incorporate functionalities such as NFT mintings and tokenization of assets in the future.

IMF Concerned About CAR’s Bitcoin Adoption

The International Monetary Fund (IMF) previously warned that CAR adopting Bitcoin as its official currency might raise a series of challenges, including financial instability and financial legal uncertainties.

Though CAR claimed its Bitcoin move would spur its economic recovery and growth from the decade-long civil war, it received criticism from crypto experts and domestic lawmakers. Considered one of the world’s poorest countries by the United Nations, CAR has a very low Internet usage rate, with only 11% of its population having access to the technology.

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Investors Shouldn’t Abandon Crypto Because of Terra’s Collapse, Says IMF’s Managing Director

According to Kristalina Georgieva – the Managing Director of the International Monetary Fund (IMF) – the recent fiasco with LUNA and UST should not become a reason for people to turn their backs on the cryptocurrency industry entirely. Unlike her previous statements, she praised the “faster service, much lower costs, and more inclusion” that the asset class provides.

Not all Digital Assets are the Same

Terra’s native token – LUNA – and its algorithmic stablecoin – UST – were undoubtedly the hottest topics in the crypto space this month. The former crashed to almost zero, while the latter lost its peg to the US dollar and is currently trading at about $0.06.

The event, combined with the significant price collapse of many other digital assets, caused a state of panic among investors.

However, the Bulgarian economist and Managing Director of the IMF – Kristalina Georgieva – argued that people should not view Terra’s crash as a reason to abandon the entire crypto sector. In her view, there are numerous blockchain projects that provide certain benefits, and people should not compare them to the fiasco with LUNA and UST:

“I would beg you not to pull out of the importance of this world. It offers us all faster service, much lower costs, and more inclusion, but only if we separate apples from oranges and bananas.”

Georgieva added that stablecoins backed by cash or other assets are a less risky investment option than those that rely on algorithms to maintain their valuation (like UST):

“The less there is backing it, the more you should be prepared to take the risk of this thing blowing up in your face.”

Earlier this year, she was not so kind to the cryptocurrency industry, claiming digital assets are “unbacked” and “inherently volatile.” On the other hand, she praised CBDCs as safer and cheaper financial products that could support the financial system while also reducing transaction costs.

Kristalina_Georgieva
Kristalina Georgieva, Source: dw

Speaking alongside IMF’s executive was also the governor of Banque de France – Francois Villeroy de Galhau. He believes society has lost some of its faith in cryptocurrencies and decentralized finance (DeFi) due to the market crash while putting more trust in central banks.

The IMF and Bitcoin

It is worth noting that the primary cryptocurrency has received a severe backlash over the past few months from the IMF. At the beginning of the year, the entity described BTC as a threat to the financial market integrity, monetary stability, and consumer protection. As such, it urged El Salvador to remove the legal tender on the asset.

True to his style, the President of the country – Nayib Bukele – asserted that “no international organization is going to make us do anything, anything at all.”

Last month, the Central African Republic (CAR) became the second nation to adopt bitcoin as an official means of payment. Unsurprisingly, the IMF criticized the move, arguing it might cause financial instability and further problems for the state.

Featured Image Courtesy of Euroactiv

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After Predicting $400K Bitcoin, Guggenheim Now Sees a Crash to $8K

With the price of bitcoin currently below $30,000, Scott Minerd, the chief investment officer of global investment giant Guggenheim Partners, believes BTC’s value could further dip to $8,000.

Bitcoin Price Could Bottom at $8,000

Minerd made the bearish prediction on Monday (May 23, 2022), during an interview on CNBC’s Squawk Box at the World Economic Forum (WEF) annual meeting in Davos, Switzerland.

According to the Guggenheim executive, bitcoin’s constant slip below the $30,000 level could cause the cryptocurrency to fall to $8,000, which signals a fall of more than 70%. Minerd said:

“When you break below 30,000 [dollars] consistently, 8,000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside, especially with the Fed being restrictive”.

According to a recent report by CryptoPotato, bitcoin has continued to close the weekly candle in red for eight consecutive weeks. The cryptocurrency’s price decline has led to the BTC Fear and Greed Index to remain at “extreme fear.”

Meanwhile, this is not the first time the Guggenheim CIO has predicted bitcoin’s price dip. Back in July 2021, Minerd said that BTC could plunge to $15,000. In April of the same year, the executive predicted bitcoin’s price could correct to $20,000, at the time when the asset was at $65,000, before retracing to around $55,000.

However, Minerd earlier made bullish predictions stating that bitcoin could reach between $400,000 and $600,000. It’s worth noting that he has seen little-to-no success with his previous forecasts.

MicroStrategy CEO and founder Michael Saylor, on the other hand, continues to make bold predictions for bitcoin despite the crypto price descent. According to Saylor, who has remained unfazed in the ongoing cryptocurrency market bloodbath, he expects BTC to “go into the millions.”

No Dominant Player in Crypto Yet

Despite the Guggenheim CIO’s recent bearish BTC price prediction, the executive said that only bitcoin and ethereum, two of the largest cryptocurrencies by market capitalization, will survive long term. Minerd noted that most crypto assets are “junk” rather than currencies.

Even with BTC and ETH dominating the market, the CIO believes that crypto is yet to have a dominant player. Minerd went on to add that there is no “right prototype yet for crypto.”

According to the executive, the ideal cryptocurrency will need to be a medium of exchange, a store of value, and a unit of account. However, Minerd believes most of the existing crypto tokens fail to pass any of the criteria.