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The US Securities and Exchange Commission (SEC) has extended its review period on the launch of crypto asset management company 7RCC’s Bitcoin spot ETF (exchange-traded fund). 

SEC Extends Deadline For 7RCC’s Bitcoin Spot ETF

In a notice published on Thursday, May 2nd, the SEC said it will now decide to approve or disapprove the 7RCC Bitcoin spot and Carbon Credit Futures ETF by June 24, 2024. This represents an almost two-month (45 days) extension from the initial deadline, which was set for May 10.

The financial regulator said in the filing:

The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. 

The application submitted to the SEC in December 2023 shows that 7RCC’s fund is designed to provide direct exposure to Bitcoin alongside carbon credits. The firm’s filing revealed that the ETF will track the changes in the premier cryptocurrency’s price and carbon credit futures based on the Vinter Bitcoin Carbon Credits Index.

The ETF intends to invest 80% of its assets in Bitcoin and 20% in financial instruments, such as swaps, that provide exposure to carbon credit futures contracts tied to emissions allowances. Based on 7RCC’s application, the carbon credits are related to the European Union Emissions Trading System, the California Carbon Allowance, and the Regional Greenhouse Gas Initiative.

Crypto exchange Gemini has been named as the custodian of the Bitcoin Spot ETF. If approved, this fund will offer a new dimension to the ETF market, especially after the launch of 11 Bitcoin spot ETFs in January.

SEC To Deny Ether Spot ETFs: Michael Saylor

Another exchange-traded product awaiting the greenlight of the SEC is the Ether spot ETF. Unfortunately, conversations around the potential approval of the investment product have not been optimistic in the past few weeks.

MicroStrategy Executive Chairman and Co-founder Michael Saylor is the latest personality to dampen any hopes of seeing the ETH spot ETF launch in the United States. Speaking at MicroStrategy’s Bitcoin For Corporations conference, the Bitcoin advocate speculated that the SEC would label Ether as a security.

Saylor mentioned that the financial regulator could also designate other tokens, including BNB, SOL, XRP, and ADA as unregistered crypto asset securities. The MicroStrategy CEO said:

None of [these tokens] will ever be wrapped by a spot ETF, none of them will be accepted by Wall Street, and none of them will be accepted by mainstream institutional investors as crypto assets.

Michael Saylor is a vocal supporter of Bitcoin, as shown by his firm’s consistent BTC acquisition. As Bitcoinist reported on April 30, MicroStrategy holds 214,400 BTC – worth roughly $13.5 billion as of this writing.

About two weeks ago, the crypto space faced another alleged rug pull. This time, the gambling platform and blockchain casino ZKasino was at the center of the accusations, with many investors claiming their money was gone.

Despite the allegations, ZKasino continued to post X updates before disappearing from the public eye with investors’ money. The most recent development shows that a suspect was arrested in the Netherlands by the Dutch authorities, and over $12 million was seized in the process.

Suspected Crypto Scammer Arrested

The Fiscal Information and Investigation Service of the Netherlands (FIOD) revealed on Wednesday that a 26-year-old man had been arrested earlier this week for the ZKasino rug pull.

Per the press release, the Dutch authorities started investigating the $33 million crypto gambling platform’s scam on April 25. The criminal investigation began with the online reports of the crypto community and information from the intelligence departments of the FIOD.

Staff from Binance’s Financial Crime Compliance team aided the FIOD during the investigation, helping “secure millions of euros in cryptocurrencies.” Similarly, the Office of the Public Prosecutor helped the investigation team contact the members of the ZKasino Team.

On April 29, the FIOD arrested a man suspected of “fraud, embezzlement and money laundering.” The suspect’s detention was extended to fourteen days for “investigative purposes” after being brought before a magistrate.

As part of the investigation, the authorities searched the suspect’s house and confiscated around €11.4 million, worth around $12.25 million, in different assets. FIOD seized real estate, luxury cars, and various cryptocurrencies.

Dutch authorities don’t rule out further arrests as the involved scammers’ cooperation will be required to recover and return the victim’s stolen money.

ZKasino, A Scam From The Beginning?

As reported by Bitcoinist, the crypto gambling platform scam rumors started in March when decentralized exchange (DEX) ZigZag made serious accusations against the project. Per the rivaling crypto exchange, ZKasino had failed to pay developers and other contractors who helped build the platform.

Moreover, ZigZag claimed that the fundraising and the project’s valuation were likely fake. The post added that the previously announced $40 million ecosystem wasn’t real and would likely never be paid out in real currency.

Despite the alarms ringing, trust in the crypto project did not completely crumble until April 20. Users began reporting suspicious activity after the website started to show changes.

One X user pointed out that, previously, the “How does the Brid-To-Earn?” section of the platform stated that the bridged Ethereum would be returned to investors when the chain and its native token, ZKAS, were live. However, this portion of the text was allegedly deleted.

Where is our ETH ? pic.twitter.com/fV3d5iFbq4

— Noé G (@0xNoe) April 20, 2024

It’s worth noting that ZKasino led investors to believe they would get their investments back within 30 days. The team had promised the ability to withdraw their bridged Ethereum 1:1. Instead, users found their funds were locked in ZKAS with a 15-month vesting period.

Concerns grew after the bridge became inaccessible after the chain went live. The team later claimed it was “down for maintenance and will be re-worked in conjunction with this launch.”

The project’s X account continued to post updates until April 24, when it announced that the Bridge was live again. Despite users’ complaints about the stolen funds, the post added that users could “transfer your $ZKAS from the ZKasino chain to Ethereum and likewise.”

After this final post and the lack of addressing the situation, users confirmed their suspicion they had been rugged. FIOD’s investigation pointed out that ZKasino’s promises were never meant to be kept as the smart contract’s setup suggests the fund’s “return was not intended.”

The Dogecoin open interest has seen a massive crash in the last month, leading to concerns about the future prospects of the meme coin. It is now a long way from its March all-time highs and has returned to the low levels of early February.

Dogecoin Open Interest Sees 66.5% Crash

In March, the Dogecoin open interest had risen to a new all-time high of $1.91 billion after a month of steady increase. This was followed by an increase in the DOGE price as investors rushed to join the rally and secure gains. This steady growth would continue into the start of April, but since then, the price has been on a downtrend.

Data from Coinglass shows that on April 1, the total Dogecoin open interest came out to $1.87 billion. But in the space of one week, the open interest had fallen by $600 million. The decline continued through to the end of April and by the end of the month, the open interest was at $763 million.

With the month of May following the bearish trend of April, the decline in the open interest has been constant. At the time of writing, the total Dogecoin open interest is sitting at $625.7 million, a whopping 66.5% crash from its $1.87 billion level just a month ago.

The last time the Dogecoin open interest was this low was toward the end of February. However, the open interest is still a long way from its January lows when it was trending below $300 million. At the same time, the DOGE price is also higher, suggesting the last few months have been quite good for the meme coin.

How Will DOGE Price React?

The reaction to a sharp drop in open interest has always been the same, ending with the price of the cryptocurrency seeing a decline. Dogecoin has stuck to this trend as its price has dumped almost 50% at the same time as bears continue to exert dominance.

If the DOGE open interest continues to decline, then investors can expect the price to follow the same path. Such a crash could send the Dogecoin price below the $0.12 support, which could be the start of a downward spiral.

However, if the open interest does recover, then a reversal in price is expected as well. Mostly, this would depend on how the price of Bitcoin performs from now on, but as interest begins to grow and traders take more positions, it gives room for Dogecoin to grow.

Bitcoin price action might be dicey, undergoing a major corrective phase. However, even as $60,000 looks slippery for upbeat bulls, some analysts are optimistic that the coin is ready for a strong leg up. 

Going by past price action, analysts maintain that the coin will surge above $73,800 and register fresh all-time highs closer to or higher than $100,000 in this projected expansion.

Historical Price Action Places BTC Above $90,000 In Coming Months

One analyst, posting on platform X, offered a bold prediction based on price action from late 2022. Then, Bitcoin spectacularly collapsed to as low as $15,500 before bouncing back sharply throughout 2023 and Q1 2024. 

Therefore, if Bitcoin follows this formation, the coin will soar to $90,000 and even reach $100,000. While the timeframe for this potential surge remains unclear, another analyst on platform Y chimed in with a specific prediction.

In a post on X, the analyst said it is imperative that Bitcoin trades above $60,000 so that the uptrend momentum doesn’t fizzle. This resilience will form the base of a leg up that will see Bitcoin roar to as high as $95,000 by August 2024. The timing of this potential peak is because, the analyst explains, price action is fractal and thus tends to rhyme.

Further bolstering this bullish outlook, another analyst noted that after prices sunk to as low as $56,500 this week, it retested a key support trend line. 

Since this trend line is held, the analyst predicts that “it is only a matter of time” before prices shoot higher. However, prices will flip green if there is a close above the current all-time high of $73,800.

Inflation Remains High And M2 Supply In The United States Growing

With the approval of spot Bitcoin exchange-traded funds (ETFs), Bitcoin is now interwoven with global markets. Accordingly, key events in traditional finance will likely impact crypto prices and sentiment. One key metric that investors and analysts have been monitoring is inflation. 

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Inflation has been higher than the benchmark 2% in the United States, an obstacle preventing the Federal Reserve from slashing rates further.

However, even as inflation drops—from the 2021 to 2024 cycle—the M2 money supply has been rising, according to FRED Economic data. The last time it grew, it triggered a bull run that forced the coin to fresh all-time highs of around $70,000.

XRP has largely had a lackluster price movement in recent months, although it continues to show promise for real-world utility. Particularly, the price of XRP was recently rejected at $0.66 after a little surge which saw it falling back down as far as the $0.42 price level. The crypto now finds itself ranging between $0.6 and $0.4, which means it has failed to break over new price territories for the past two years. 

While some analysts see this trend as XRP still being undervalued, others are of a pessimistic outlook. Analyst Josh Olszewicz is part of the latter group of crypto analysts. In a recent analysis, Olszewicz noted the “dead” state of XRP while discussing the current state of altcoins. 

Current State Of XRP And The Crypto Market

XRP has failed to keep up with the gains of other major cryptocurrencies like Bitcoin and Ethereum. While the total crypto market cap has climbed over 50% in the past year, XRP has lagged. Cryptocurrencies like Bitcoin have broken into new all-time highs and others like Solana are on their way to creating new all-time highs.

XRP on the other hand, has failed to break above $1. This poor performance has led many critics to claim that interest in XRP is fading, especially as an investment asset.

The failure of XRP to break into new price levels was brought to the attention of crypto analyst Josh Olszewicz, who pointed out an interesting position regarding the cryptocurrency.  During his presentation on his technical analysis of altcoins, Olszewicz made the observation that XRP is not particularly ideal for investors who want to make a profit. He essentially referred to the cryptocurrency as “dead.”

“I just don’t know why anybody will bother trading this. It’s at the same price it was since 2018. It’s dead. It’s dead money,” the analyst said regarding XRP.

Is XRP Actually Dead?

Recent market dynamics have seen XRP falling in the market cap rankings. At the time of writing, XRP is trading at $0.515 and is the 7th largest cryptocurrency. Some analysts argue that XRP is primed for significant growth. XRP bulls point to Ripple’s partnerships with major banks and payment providers as a sign of future success. 

Despite the lackluster price growth, XRP remains steady in terms of trading activity. Interestingly, Olszewicz noted that XRP will have days when traders can profit. However, holding while waiting for a longer-term bullish outlook doesn’t make sense to him. 

Crypto analyst EGRAG is of a different opinion. According to him, XRP could surge by over 700% and reach the $4 price level over a longer time frame.

On-chain data suggests the Bitcoin short-term holders haven’t been capitulating during the crash, a sign that a shift has occurred in the market.

Bitcoin Short-Term Holders Haven’t Been Doing Much Loss-Selling Recently

As pointed out by analyst James Van Straten in a post on X, the BTC short-term holders haven’t been sending much BTC at a loss recently, despite the plunge the asset’s price has suffered.

The “short-term holders” (STHs) refer to the Bitcoin investors who bought their coins within the past 155 days. These investors make up one of the two main divisions of the BTC market, with the other cohort being known as the “long-term holders” (LTHs).

Statistically, the longer an investor holds their coins, the less likely they are to sell at any point. As such, the LTHs are considered the resolute side of the market, while the STHs are considered the weak hands.

Generally, the STHs easily sell whenever a change in the market happens, like a crash or rally. As such, these investors could be expected to have participated in some selling during the latest plummet in the coin as well.

One way to track whether these investors are selling or not is to track their exchange deposits. Holders don’t always deposit to these platforms for selling, as they offer other services as well, but inflows during a rally/crash are more often than not an indication of a selloff.

In the current discussion, the entire exchange transfer volume for this cohort isn’t of interest, but only the part of it that’s being deposited at a loss. As Straten has highlighted in the chart below, a curious pattern has emerged in this loss exchange inflow volume for the STHs.

As displayed in the above graph, the Bitcoin transfer volume from the STHs in loss to exchanges registered a huge spike back in January, as the market downturn following the approval of the spot exchange-traded funds (ETFs) occurred.

In the price decline that followed the top in May, the metric also registered a large spike, although notably smaller in scale than the January one. It would appear that during both of these drawdowns, the STHs had shown a significant capitulation reaction.

During the latest crash, however, the trend doesn’t appear to have been the same. “What is really interesting is that in these past two days, Bitcoin dropped 12%, but STHs sent very little Bitcoin to exchanges at a loss,” notes the analyst.

This would suggest that these weak hands have gained some strength recently. “Lettuce hands are becoming slightly less erratic, signs of a maturing market,” says Straten.

BTC Price

Bitcoin has shown some recovery from the crash during the past 24 hours as its price has now returned back to the $60,700 level.

The recent actions of the US Department of Justice (DOJ) have ignited a fierce debate on the future of financial privacy.

The crackdown on Wasabi Wallet’s service has raised significant concerns among privacy advocates and crypto users alike, spotlighting the tension between regulatory actions and the right to private digital transactions.

A Blow To Privacy: DOJ Targets Wasabi Wallet

Wasabi Wallet, known for its privacy-focused features, recently announced the shutdown of its Coinjoin coordination service. This service was integral to enhancing user anonymity by mixing details of multiple transactions to obscure the trail back to the fund’s original source.

The decision came after heightened scrutiny from the DOJ, which has increasingly focused on privacy tools under the guise of preventing illicit financial activities. This action has not only disrupted service operations but also sparked a broader conversation about privacy rights in the digital realm.

Naomi Brockwell, a vocal cryptocurrency advocate, expressed her dismay on X, emphasizing that financial privacy is fundamental to a free society. Her sentiments echo a growing discomfort among digital users and privacy proponents who view such regulatory measures as “overly intrusive” and “detrimental” to personal freedoms.

This week the DOJ criminalized the devs of an app that restores financial privacy. Financial privacy is essential for a free society. I had a brief chat back in 2020 with @Snowden about the need for privacy in bitcoin.https://t.co/FBDSqqpvXJ pic.twitter.com/X2nNPJYSgc

— Naomi Brockwell (@naomibrockwell) May 3, 2024

The Reaction From The Crypto Community

The response from the crypto community was swift and pointed, with notable figures like Edward Snowden weighing in on the implications for Bitcoin’s future. Snowden, a long-time advocate for privacy rights, criticized the slow progress on enhancing privacy features within the Bitcoin network.

His comments reflect a frustration with the ongoing vulnerability of cryptocurrencies to potential government oversight and interference.

Snowden also underscored the urgency for developers to innovate and implement strong privacy solutions that could withstand governmental pressures.

He pointed out that the technological capability exists but the implementation has lagged, leaving users exposed and the promise of decentralized financial systems unfulfilled. Snowden noted in a post on X:

I’ve been warning Bitcoin developers for ten years that privacy needs to be provided for at the protocol level. This is the final warning. The clock is ticking.

Meanwhile, the implications of the DOJ’s actions extend beyond Wasabi Wallet. So far, the US DOJ appears to be on a trend of increased regulatory interventions in the cryptocurrency space.

Recently, following the enforcement measures against Tornado Cash and Binance, the DOJ recently initiated a lawsuit against KuCoin, a leading cryptocurrency exchange, for multiple regulatory violations, including breaches of anti-money laundering laws in the United States.

Featured image from Unsplash, Chart from TradingView

Shiba Inu marketing lead, Lucie has announced plans that would see ShibaSwap, a Decentralized Exchange (DEX) on the Ethereum blockchain expanding to a new chain. This new development could significantly transform the Shibarium ecosystem, potentially fueling a price leap for Shiba Inu’s native token, SHIB and Shibarium’s BONE.

ShibaSwap Is Going Multi-Chain

While the Shiba Inu ecosystem is still celebrating the completion of the Shibarium hardfork, Lucie has dropped a new mega development, announcing that ShibaSwap will be going multichain, operating on both the Ethereum network and the Shibarium Layer 2 network.

According to a new edition of The Shib Magazine, the integration of ShibaSwap on two prominent chains will represent a significant milestone for the Shiba Inu ecosystem, as ShibaSwap will be “enhancing rather than replacing its foundational Ethereum connections.” The decentralized exchange had initially operated solely on the Ethereum blockchain, however with the upcoming transition, ShibaSwap will be accessible on both chains, potentially improving its overall functionality and drastically reducing gas fees.

This new integration will also enable ShibaSwap to overcome the limitations of a single blockchain network, ensuring a seamless and more reliable trading experience for its growing community. Additionally, the expansion into Shibarium’s L2 network will have immense benefits on Shibarium’s ecosystem token, BONE.

Maximus, a seasoned moderator at Shiba Inu’s Tech disclosed that ShibaSwap’s integration into Shibarium will potentially reduce BONE’s substantial supply, totaling more than 249.9 million, with a circulating supply of 229.9 million.

He further clarified how the planned transition will supposedly decrease BONE’s supply, explaining that “both builders and users will need some BONE to use Shibarium while projects will acquire BONE to add liquidity for their tokens, and lock this liquidity, or even burn the liquidity tokens, locking BONE forever.” This reduction in the token’s supply is expected to improve the value of BONE, and possibly SHIB over time.

Shiba Inu Token Set For New Gains

Following the completion of Shibarium’s hard fork on April 29, the price of SHIB witnessed significant gains, surging by approximately 3.78% in the past 24 hours. The cryptocurrency is currently trading at $0.000022, according to CoinMarketCap.

The announcement of ShibaSwap’s upcoming expansion into the Shibarium network alongside the conclusion of Shibarium’s upgrade could potentially drive new adoption and interest into the Shiba Inu ecosystem. This in turn could fuel a price increase for SHIB, enabling the popular meme coin to soar to new highs.

While speaking to The Shib Magazine, Maximus disclosed that he expects a significant increase in volume in BONE, as the transition is a change that most community members have been excited for. He revealed that Shiba Inu ecosystem tokens could potentially experience a price increase, concluding that a favorable price action will benefit the community and the ecosystem in the long run.

According to a recent survey by Fidelity Digital Assets, institutional investors, including US pension plans, are increasingly inclined to invest in crypto assets, including Bitcoin. 

The survey covered various institutional investor segments, including financial advisors, family offices, hedge funds, endowments, foundations, and pension funds. 

Institutional Investors Dominate Crypto Adoption

The survey findings indicate a significant surge in institutional interest in crypto assets. Of the total respondents, 74% expressed their intention to buy or invest in digital assets in the future, a slight increase from 71% in the previous year. 

Notably, US high-net-worth investors showcased a substantial rise in their preference for crypto assets, with future interest surging from 31% to 74% year over year.

Despite the positive sentiment, the survey also illuminated the concerns and barriers faced by institutional investors. Price volatility emerged as the most significant obstacle, with 50% of respondents citing it as their primary concern. 

Other key concerns included the lack of fundamentals to gauge appropriate value (37%), security issues (35%), market manipulation (35%), and regulatory classification of certain coins as “unregistered securities” (33%).

The survey highlighted a notable shift in perception among institutional investors. Investors in the US and Europe reported increased familiarity, improved perception, and a higher number of crypto asset investments. Europe has caught up with Asia in terms of overall adoption and positive perception, while the US still lags behind.

In terms of specific investor groups, high-net-worth investors, crypto hedge funds/venture capital firms, and financial advisors exhibited the highest adoption rates and consideration of digital assets. 

This higher adoption may be attributed to the organizational structures and investment decision-making policies of these groups. On the other hand, family offices, pensions/defined benefit plans, traditional hedge funds, and endowments and foundations showed lower levels of adoption.

Bitcoin ETFs Garner Strong Interest

The survey also explored the features of digital assets that institutional investors find most appealing. The potential for high upside, the opportunity for innovative tech investments, and the enablement of decentralization were cited as the most attractive aspects. 

Additionally, participation in decentralized finance (DeFi) and yield opportunities gained more attention compared to the previous year, while concerns about lack of correlation decreased.

The study suggests that institutional investors in Europe and Asia are more accepting of digital assets in their portfolios than their US counterparts.

Ultimately, Bitcoin exchange-traded funds (ETFs) and multi-digital asset funds, both actively and passively managed, emerged as the most appealing products among surveyed investors. European respondents also expressed interest in digital asset interest accrual offerings. Fidelity Digital Assets also expressed the following: 

The increased adoption reflected in the data speaks to a strong first half of the year for the digital assets industry. While the markets have faced many headwinds in recent months, we believe that digital assets fundamentals remain strong and that the institutionalization of the market over the past several years has positioned it to weather recent events. Institutional investors are experienced in managing through cycles, and the largely inherent factors that they cited as appealing in this study will likely remain as the market emerges from this period.

As of now, the largest cryptocurrency on the market, Bitcoin, has regained the $60,500 threshold after a steep drop of almost 20% from its all-time high of $73,700 on March 14 to $56,000 on Wednesday.

Featured image from Shutterstock, chart from TradingView.com 

Edward Snowden, the well-known whistleblower, reiterated his long standing concerns about Bitcoin’s privacy features, or the lack thereof in a recent post on X. Snowden’s latest comments emerge in the wake of a significant announcement by the Wasabi Wallet team concerning their decision to discontinue their coinjoin coordination service, a cornerstone for enhancing user privacy on the Bitcoin network.

‘The Clock Is Ticking’ For Bitcoin, Says Snowden

Snowden expressed his frustration with the slow pace of privacy enhancements within Bitcoin’s protocol. “I’ve been warning Bitcoin developers for ten years that privacy needs to be provided for at the protocol level. This is the final warning. The clock is ticking,” Snowden posted on X, commenting on Wasabi Wallet’s announcement from yesterday.

I've been warning Bitcoin developers for ten years that privacy needs to be provided for at the protocol level. This is the final warning. The clock is ticking. https://t.co/r7w7gdrHRp

— Edward Snowden (@Snowden) May 2, 2024

Wasabi Wallet, developed by zkSNACKs, has been a pioneering solution aimed at enhancing privacy for Bitcoin transactions through its coinjoin coordination service. However, a recent blog post by the Wasabi Wallet team detailed their decision to halt this service as of June 1, 2024.

“After years of relentless dedication to improve Bitcoin’s privacy, zkSNACKs, the company pioneering the development of Wasabi Wallet, is shutting down its coinjoin coordination service,” the post read. The developers highlighted ongoing regulatory pressures and the need for legal clarity as key reasons behind their decision.

Despite discontinuing the coinjoin service, Wasabi Wallet will continue to operate as a conventional BTC wallet. The team assured users of continued privacy enhancements through other features like client-side filtering, Tor integration, and custom coin selection, though they acknowledged these measures do not ensure complete privacy on their own.

This development arrives amid increasing scrutiny and legal challenges facing crypto privacy tools. Notably, New York federal prosecutors recently charged the founders of another privacy-focused wallet, Samourai Wallet, with facilitating illegal transactions worth over $2 billion. This action is part of a broader crackdown by US authorities on wallets and mixers associated with illicit activities.

While Snowden has lauded Bitcoin in February as the “most significant monetary advance since the creation of coinage,” his concerns about BTC built-in privacy have been consistent. In November 2021, he lauded the advancements made by Zcash, another cryptocurrency known for its strong privacy features.

He stated, “Zcash meaningfully advanced what cryptocurrency could DO, and that’s what I admired about it. And my primary criticism of Bitcoin is still, so many years later, that they haven’t addressed its enormous on-chain privacy problem.”

In contrast, Samson Mow, a prominent figure in promoting nation-state adoption of Bitcoin, downplayed the significance of Wasabi’s announcement. Mow argued, “I don’t get why everyone is crying about this. Wasabi is open-source. You can run your own coordinator too. This is like the Pirate Bay saying they won’t seed torrents anymore. Yes, good and smart move.”

At press time, BTC traded at $61,900.

Ripple has filed a new court document supporting its motion to strike new evidence in its long-running legal battle against the Securities and Exchange Commission (SEC). The crypto firm filed the initial motion on April 22, seeking to strike Andrea Fox, an accountant at the Commission, as one of the claimant’s witnesses. 

Ripple Makes A Case For Its Latest Request

In the letter addressed to Judge Sarah Netburn, Ripple argued that the SEC has failed to show that Andrea Fox’s declaration is “summary evidence rather than expert testimony or that it was under the court’s scheduling order.” In line with this, they requested that her testimony be struck out. 

Ripple initially raised this motion in opposition to the SEC’s motion for remedies and entry of final judgment. They argued that the SEC erred in relying on Fox’s testimony, as she was never disclosed as a fact or expert witness and was not deposed during the initial discovery or supplemental remedies discovery.

In reply to Ripple’s initial motion, the SEC tried to paint Fox as a summary witness rather than an expert witness, which Ripple had classified her testimony as. The Commission argued that “Ripple incorrectly claims this declaration constitutes expert testimony.” It further stated that this wasn’t the case, claiming that Fox’s declaration was a “standard summary evidence permissible” under the law. 

This was what made Ripple pivot in its latest court filing. It argued that even if Fox was a summary witness (and not an expert witness, as believed), the SEC hasn’t done enough to prove this. The crypto firm noted that the Commission has also failed to explain why Fox’s declaration highlighted her qualification as an accountant if they weren’t trying to paint her as an expert witness. 

Usually, a witness’s qualification would only matter if the witness in question was meant to give expert testimony. As such, although the SEC argues that Fox isn’t, everything points to her being an expert rather than a summary witness. 

Another Argument On Why Fox Is An Expert Witness

In its reply, the SEC claimed that Fox was a summary witness because her declaration only applied “basic arithmetic to Ripple’s financial records.” However, Ripple refuted this argument, noting that Fox’s actions suggested she was acting as an expert witness. They stated how the accountant used her specialized knowledge to analyze not only Ripple’s records but also third-party evidence and expert reports. 

She then used her analysis to draw inferences and conclusions about the documents she reviewed. Ripple also claimed that she calculated the disgorgement, prejudgement interest, and discount amounts based on her analysis. Basically, the crypto firm was hinting at the fact that the SEC stipulated its proposed fine of almost $2 billion based on Fox’s judgment.

Ripple also alluded to how the SEC had cited one of Fox’s inferences in its remedies memorandum. According to the crypto firm, “a layperson could not “infer” what entries “appear to” mean by doing basic math.”

London-based CF Benchmarks, a unit of crypto exchange Kraken, is positioning itself as a notable beneficiary of the surge in spot Bitcoin ETFs this year and shares an increasingly bullish outlook for the ETF market in Hong Kong and the US through 2024. 

According to Bloomberg, with the recent debut of these ETFs in the US in January and their subsequent launch in Hong Kong, CF Benchmarks has become a key reference data provider for approximately $24 billion of cryptocurrency ETFs. This figure is dominated by Bitcoin funds, including the $15.9 billion vehicle offered by BlackRock in the US.

Bitcoin ETFs Set To Shine In Hong Kong

CF Benchmarks licenses its benchmarks to the ETFs and earns fees based on assets under management. The company currently represents around half of the crypto benchmarking market and is actively collaborating with the new Bitcoin ETFs in Hong Kong. 

Sui Chung, the CEO of CF Benchmarks, told Bloomberg that he envisions expanding crypto ETFs into other markets such as South Korea and Israel. Chung notes that South Korea, in particular, has seen ETFs become the preferred option for long-term savings and has shown a high level of adoption of digital assets.

Notably, while CF Benchmarks initially anticipated $5 billion in assets for the US spot-Bitcoin ETFs utilizing its indexes, the actual amount has exceeded four times that figure. 

Looking ahead, Chung expects the Hong Kong products to accumulate as much as $1 billion in funds under management by the end of 2024.

Contrasting Trends

The introduction of ETFs in the US sparked a significant rally, propelling Bitcoin to an all-time high of nearly $74,000 in March. However, since then, the token has experienced a decline, shedding approximately 20%, to a current trading price of $59,000 as investor demand for the funds waned. 

On Wednesday, the group of nearly a dozen US products faced its largest daily net outflow, resulting in assets under management standing at approximately $47 billion.

On the other hand, Hong Kong’s emerging market recorded a trading volume of HK$48.91 million (approximately US$6.26 million) for six Hong Kong-based ETFs on May 3. 

Among the six Hong Kong spot ETFs for virtual assets, the Bitcoin ETF commanded the lion’s share of trading volume, accounting for HK$43.41 million. Additionally, the Ethereum ETF recorded a trading volume of HK$5.5 million.

In contrast to the Hong Kong market, the trading volume of US-based Bitcoin ETFs soared to an impressive $1.72 billion on May 2.

Featured image from Shutterstock, chart from TradingView.com

Following a successful first-day trade of Bitcoin Spot ETFs in Hong Kong, popular Bloomberg Intelligence expert Eric Balchunas has taken center stage to analyze the historical introduction of the products in the country.

Hong Kong’s Bitcoin Spot ETFs Attract Notable Inflows

On Tuesday, Eric Balchunas called Hong Kong Spot Bitcoin ETFs a market for ants, as it is just 1/168th the size of the funds in the United States. He further highlighted that the debut of HK spot ETFs coincided well with the US slowdown, so their inflows will more than offset the marginally negative US flows.

Given the notable inflows seen on the first day, the Human and Machine channel called out the analyst noting that after raising more than HK$11.2 million on their first day of operation, Hong Kong’s Bitcoin and Ethereum Spot ETFs countered net outflows from the US market.

Responding to the channel’s post, Balchunas stated that he and his team recently released a memo including the final data regarding HK’s spot ETFs, which is not as timely as in the US. According to the expert, he previously projected the products would garner a $1 billion inflow in two years. However, with Hong Kong witnessing $292 million in assets on day 1, he believes his predictions might be way ahead of schedule and corrections can derail plans, as seen in the US market.

During the first day of trading, Ethereum spot ETFs took up 15% of the market, and investors seemed to be drawn to larger funds rather than lower fees. The ChinaAMC BTC spot ETF (3042 HK) with higher fees saw the highest inflow valued at $124 million on the first day. Meanwhile, other funds with lesser fees like the Harvest Bitcoin Spot ETF (3439 HK) and Bosera Hashkey Bitcoin ETF (3008 HK) saw a net inflow of $63 million and $61 million respectively on day one.

Eric Balchunas’s emphasis seemed to have fueled confusion among community members, as a pseudonymous X user questioned the analyst on the difference between the $292 million in assets and the HK$11.2 million of inflows. 

Balchunas responded saying that the exact $292 million in assets that were contributed as seed money just prior to launch are not included in the volume calculation. Meanwhile, in the US, seed money is withheld until the first day to make the volume appear larger, which aids in marketing.

The Funds Sees Massive Outflows In US

The Bloomberg expert’s review came in light of the massive outflows witnessed in the US market surpassing $500 million in a day. Wednesday saw the fastest-ever selloff of US BTC spot ETFs by investors, recording a cumulative net outflow of $563.7 million.

According to data from Farside Investors, this marks the biggest outflow since the funds started trading early this year. Of the 10 Spot Bitcoin ETFs, Fidelity Wise Origin Bitcoin Fund (FBTC) saw the largest withdrawals, totaling $191.1 million.

Grayscale Bitcoin Trust ETF (GBTC) had withdrawals of about $167.4 million, while Blackrock iShares Bitcoin Trust (IBIT) saw a whopping $36.9 million withdrawn, marking its first day of outflows since its inception.