Crypto Guides, Knowledge & Insights

GrayScale Bitcoin Trust (GBTC) Premium Tanks to -19% As More Competition Weighs In

For the past two months, Grayscale Bitcoin Trust (GBTC) has traded at a negative premium to the net asset value (NAV). GBTC historically traded at a high premium relative to the underlying, averaging a 15% premium since the funds inception. This was largely due to GBTC being the only investment vehicle easily accessible to institutional investors.　　On Thursday, the trust saw its premium plummet to a new all-time low of -18.92%. With Canadian competitors rapidly taking up market share and U.S. ETFs just on the cusp of approval, institutional demand for Grayscales investment product seems to be drying up.　　Canada‘s Purpose Bitcoin ETF, for instance, hit $1.4 billion assets under management (AUM) when Bitcoin surged to its all-time high earlier this month. Despite being dwarfed by GBTC’s much larger $32 billion AUM, the Canadian funds trajectory since inception (2 months) is nonetheless impressive.　　The U.S. Securities Exchange Commission (SEC) also recently began its review of two U.S. Bitcoin ETFs.　　Grayscales Sky High Fees Result in Continuous Fund Outflow　　A major part of Grayscale losing its market dominance is due to its high management fees. With an annual rate of 2%, its simply impossible to keep up with the competition.　　The three available Bitcoin ETFs in Canada

2021-04-26Deep Dive

Bill Miller Says Bitcoin Is Not a Bubble — BTC Entering Mainstream as Demand Grows Fast Than Supply

Bill Miller, the founder and chief investment officer of Miller Value Partners, does not think bitcoin is a bubble. Instead, he said it is at the beginning of mainstream adoption. Remaining bullish on the cryptocurrency, the famed value investor explained that bitcoins price will rise as the demand for the crypto is growing faster than its supply.　　Bill Miller Bullish on Bitcoin　　Longtime value investor Bill Miller is the founder of Miller Value Partners and currently serves as the chairman and chief investment officer. He is also the co-portfolio manager for Opportunity Equity and Income Strategy funds. Prior to Miller Value Partners, he co-founded Legg Mason Capital Management.　　He was asked in an interview with CNBC last week whether there is a lot more upside to the price of bitcoin. Miller replied: “There are many many different ways to look at bitcoin. The simplest way is just the supply and demand.” Emphasizing rising institutional interest in the cryptocurrency as it enters into the mainstream, he elaborated:　　 “Supply is growing 2% a year and demand is growing faster. That‘s all you really need to know, and that means it’s going higher … I dont think this is a bubble at all in bitcoin, I

2021-04-26Deep Dive

The convergence between Tesla, SpaceX, renewable energy and Bitcoin mining

To establish an interplanetary economy, humanity needs a better financial system that decentralized cryptocurrency can offer.　　Tesla — a top 10 company in the Fortune 100 that is run by one of the world‘s wealthiest people, Elon Musk — transferred $1.5 billion of its treasury cash into Bitcoin (BTC) in early February. Musk’s Bitcoin purchase startled traditional investors, who now had to understand how their investment in Tesla would relate to Bitcoin.　　Currently, much of Teslas revenue comes from selling surplus renewable energy credits, or RECs, which will dry up in the next several years as competing automakers produce their own zero-emissions vehicles and build up RECs with states that require them.　　In Teslas filing with the United States Securities and Exchange Commission, the company stated that it updated its investment policy to be more flexible in diversifying and maximizing returns on idle cash. As part of this plan, Tesla said it would invest in certain “alternative reserve assets including digital assets, gold bullion, [and] gold exchange-traded funds.” The statement continues:　　“Thereafter, we invested an aggregate $1.50 billion in Bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting Bitcoin as

2021-04-26Deep Dive

Microsoft, Apple, and MicroStrategy Stock Tokens to Be Listed on Binance

Leading cryptocurrency trading platform Binance has announced that it will list the tokenized shares of Apple, Microsoft, and MicroStrategy by the end of April.　　The exchanges users will be able to get exposure to Bitcoin-heavy MicroStrategy as soon as today. Apple and Microsoft stock tokens will be listed on the exchange on Apr. 28 and Apr. 30, respectively.　　Binance made a foray into tokenized stock trading earlier this month. Elon Musks e-car manufacturer Tesla was the very first company on its list. It has added the fractional shares of rivaling cryptocurrency exchange Coinbase that went public on Apr. 14.　　All tokenized stocks listed on Binance are denominated in the Binance USD (BUSD) stablecoin.　　While similar products are also offered by FTX, Binance offers commission-free stock trading.　　All stock tokens are fully backed by a corresponding portfolio of underlying securities.　　It is worth noting that Binances stock tokens are only tradable during U.S. market hours.　　Regulatory scrutiny　　Binance has come under fresh regulatory scrutiny over its new product that is supposed to democratize stock trading.　　On Apr. 22, the Financial Times reported that the UK‘s Financial Conduct Authority had started working with the exchange to determine whether or not the product falls within the country’s securities laws:　　We cannot comment on

2021-04-26Deep Dive

DeFi Yield Protocol Bridge To Binance Smart Chain Is The Hottest Crypto Connection

High gas fees still plague Ethereum and the plan to upgrade isn‘t fast enough for the pace the industry is moving at. Crypto market participants are demanding more options. Projects such as DeFi Yield Protocol and countless others are moving to Binance Smart Chain. Here’s why the newly launched bridge between DeFi Yield Protocol to Binance Smart Chain has become cryptos hottest connection.　　 DeFi Yield Protocol Launches Bridge To Binance Smart Chain, Boosting Accessibility　　Beginning in February of this year, DeFi Yield Protocol announced the BSC integration, which included the DYP staking and governance dApp. The goal of the bridge is to provide greater liquidity overall for the DYP user base and encourage more innovative developments down the line.　　The DYP ecosystem itself is now more accessible than ever before. For example, DYP liquidity providers have earned more than 7000 ETH worth over $14 million USD since the staking dApp made its debut.　　Total liquidity on Uniswap has grown over 20x, reaching more than $19 million USD. The company also added more than half a million dollars worth of liquidity to PancakeSwap. Users, there will be able to add their liquidity to the various pools, including DYP/BNB, DYP/ETH, and DYP/BUSD, and earn rewards

2021-04-26Deep Dive

Brexit and fintech: A spring stocktake

The United Kingdom no longer has the choice but to adapt to the post-Brexit times, making digital finance one of its priorities.　　It has been four months since the Brexit trade deal came into effect between the United Kingdom and the European Union. The deal, in common with other free trade agreements, does very little to support the export of financial services from the U.K. into the single market. As a result, spring has seen financial services firms, including those in financial technology adjusting to different trading relations with the EU, while also managing the ongoing COVID-19 restrictions.　　Most notably, U.K. financial services have lost their automatic rights to service EU clients from their U.K. base, using the so-called passporting rights that U.K. firms had during the time as a member state. Passporting has been replaced by equivalence decisions. However, this is not a fair replacement. Equivalence is a unilateral decision granted by the EU in areas of finance, where it recognizes the U.K.‘s regulatory framework to be equivalent to its own. These decisions can be withdrawn with 30 days’ notice and do not cover the whole financial services sector. For example, retail bank lending and depositing are not subject to equivalence

2021-04-26Deep Dive

Paxos Becomes Third Federally Regulated Crypto ‘Bank’

Stablecoin issuer and blockchain startup Paxos has become the third crypto-native company to score a federal trust charter through the U.S. Office of the Comptroller of the Currency (OCC).　　The national bank regulator announced Friday it has granted Paxos a preliminary charter, letting the firm bring its new Paxos National Trust entity online as a federally regulated entity offering custody services, stablecoin management, payment, exchange and other services.　　With the approval, Paxos joins Anchorage and Protego in becoming one of the only national trusts that were born in the crypto ecosystem. Kraken and Avanti have also become state-regulated crypto bank entities after securing Special Purpose Depository Institution charters through Wyoming.　　The move is another sign that the global cryptocurrency ecosystem is becoming increasingly acceptable to regulators, who have traditionally been wary of the still-young industry. In particular, the preliminary approval indicates that the OCC is comfortable with Paxos as a custodian, which is significant for an industry prone to hacks or exchange crises.　　Becoming an OCC-regulated trust is one way crypto exchanges can operate nationwide without needing to secure state-level licenses in each of the 49 different U.S. states (Montana doesnt have a licensing requirement).　　“This is a preliminary conditional approval, which means that the

2021-04-26Deep Dive

How Bitcoin and DeFi are Completely Different Phenomena

Decentralized finance (DeFi) applications, specifically on Ethereum (ETH), have exploded in popularity over the past couple of years. While bitcoin appears to be here to stay as a global, apolitical store of value, the basic idea behind DeFi is to go beyond the creation of a new, base monetary asset and bring a greater degree of decentralization to other areas of finance (or at least the appearance of decentralization).　　While bitcoins key value proposition is built around the removal of trusted third parties in the realm of digital money, it is much more difficult to completely remove counterparty risk in other areas of the traditional financial system.　　Sure, some people are making fortunes by earning yields on the speculative tokens found in the DeFi ecosystem, but with greater yield comes greater risk.　　Its vital for anyone involved in the cryptoasset market to understand that Bitcoin and DeFi are not at all the same when it comes to risk profiles.　　 Bitcoin is a savings technology　　Bitcoin is often referred to as a speculative investment, but the reality is it is a new type of savings technology. A key difference between savings and investment is that savings does not generate yield and should not involve potential

2021-04-26Deep Dive

UK Banks Getting Tough on Bitcoin, But AML Rules Are The Real Problem

NatWest, the UK retail bank, has announced it will not engage with business customers who accept payment in bitcoin or other cryptocurrencies. It follows recent announcements from HSBC that it won‘t allow transfers from digital wallets and won’t enable customers to buy shares in companies associated with cryptocurrencies, such as Coinbase or MicroStrategy.　　The feeling from both banks is that cryptocurrencies are high risk and therefore justify a cautious approach, though they note that their stance could change if and when regulation evolves.　　Interestingly, this is not a view shared by institutions across the Atlantic. Both Morgan Stanley and Goldman Sachs are now offering their wealth management clients the opportunity to invest in bitcoin. Indeed, the initial uptake has been strong, with Morgan Stanley alone drawing in nearly USD 30m of investment in two weeks.　　Why the caution？　　The cautious approach of NatWest and HSBC stems from the 2012 recommendations of the Financial Action Task Force, a G7 initiative geared towards defeating money laundering. These recommendations mandate each member state to implement measures requiring their banks to scrutinize customers transactions for the purposes of money laundering and terrorist financing.　　Under recommendation one, the anti-money laundering (AML) framework is to be applied on the basis of

2021-04-26Deep Dive

Discovering financial literacy: Crypto leads retail investment charge

Momentum trading driven by retail investors seems to have taken on a new life since the onset of the global standstill occasioned by the ongoing coronavirus pandemic. Where celebrity challenges used to dominate viral trends on social media, issues relating to personal finance and investments seem to be as popular these days.　　This increasing interest in the financial markets from workaday folks has also spread to the crypto space as digital currencies posted sharp price recoveries from the slumps that characterized the Black Thursday crash of March 12, 2020.　　While interest is palpable, some gatekeepers question whether the new generation of retail investors is sufficiently knowledgeable to be investing in risky assets. But has the management of personal finances and investing become a new fashionable trend？　　COVID-19: Challenge and opportunity　　Trading apps like Robinhood and Coinbase have recently become the most downloaded on Apples App Store, ahead of popular social media services such as TikTok and Instagram. Given the sway held by social media over popular culture in the last decade, investment apps seeing the most downloads could point to a pivot in interests especially among the younger demographic.　　According to a survey published by U.S. investment giant Charles Schwab, 15% of the current retail

2021-04-26Deep Dive

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