Five things that happened in crypto this week: Bitcoin ETFs, BofA Research, Musk, Shiba Inu, and Soros
The week in Kryptos was full of activity, with interesting discussions at the personal conference in London, Token2049.
Most notable was the conversation between leaders in the digital asset space, including Coinbase and Galaxy Digital, about moving crypto adoption to Europe. And there’s more to come with a war for crypto talent.
In addition, the US regulator has taken a step to approve an ETF tracking company with Bitcoin exposure. Check out this section to see if the Securities and Exchange Commission says more about whether these existing frameworks can be used to provide regulated products for investors to access crypto.
Meanwhile, George Soros’ family office confirmed his interest in digital assets, and Bank of America launched its digital asset research in the form of an introductory report.
The closest thing to a Bitcoin ETF now has SEC approval
The US Securities and Exchange Commission has given the go-ahead for an ETF made up of companies that have high bitcoin exposure on their balance sheets.
The portfolio should include around 30 companies, including PayPal and Tesla.
Regulatory authority approval of the Volt Crypto Revolution and Tech ETF comes as the broader market awaits approval for a Bitcoin-only ETF.
In its June 7 SEC filing, Volt said it defines companies with an exposure to Bitcoin as “Bitcoin Revolution Companies.”
These companies hold or have held Bitcoin on their balance sheets “for treasury management purposes” or for other reasons. These can also be companies that are actively using, investing, developing, mining or have products that are ready to benefit from Bitcoin and Bitcoin’s blockchain technology and / or the potential for increased efficiency that it offers for various business processes.
The ETF would also include companies that develop, produce or provide technologies and / or cloud services or equipment that facilitate or support the creation or transmission of bitcoin or blockchain technology, or otherwise benefit from bitcoin, blockchain technology, transactional innovations or rely on it, and cryptocurrency.
It was also advised that the fund would invest 25% in assets of Virginia-based software company MicroStrategy Incorporated.
“MicroStrategy is generally optimistic about Bitcoin and, given its willingness to convert free cash to Bitcoin, it could be positioned to benefit from an increase in Bitcoin value. MicroStrategy is also leading the way in promoting the benefits of Bitcoin to the world, ”states the Volt file.
Bank of America joins the digital asset insights package
Bank of America has released new research on digital assets and cryptocurrencies.
The digital asset universe is “too big to ignore,” with a market value of more than $ 2 trillion and more than 200 million users, said the US lender.
The note, first published by Bloomberg, highlighted that the digital asset ecosystem is “so much more” than Bitcoin, including the development of tokens, decentralized applications, central bank digital currencies and non-fungible tokens.
And while the space is crowded, a new generation of digital asset trading companies is rapidly evolving, offering cross-industry applications like finance, said Alkesh Shah and Andrew Moss, BofA’s crypto and digital asset analysts.
Decentralized applications and NFTs were hailed as the most innovative, an ecosystem that enables users to take advantage of financial products and services such as lending, borrowing, insurance and trading without relying on a traditional financial institution, Shah and Moss said.
The key takeaway is that the next 30 years will see big changes in what is currently just the start of the first innings, BofA analysts said based on cryptocurrency trading adoption of 221 million users worldwide as of June 2021 had, up from 66 million at the end of May 2020. Companies that do not take this into account or are preparing to use decentralized software with distributed ledgers and blockchain at their heart could be forced to exit.
BofA warns that companies too have to keep pace as digital asset owners are getting younger.
“These generations grew up with the Internet and expect native Internet transactions to run smoothly and digitally – without multiple steps and middlemen,” the press release said.
How a DeFi update mistakenly sent $ 90 million in comp coins to users
The founder of Compound, a popular staking protocol for decentralized finance, took to Twitter this week to ask for the return of $ 90 million worth of tokens accidentally sent to users during an upgrade.
“Keep 10% as a white hat. Otherwise, it will be reported as income to the IRS and most of you will be poached, ”Robert Leshner, founder of Compound Labs, said in a tweet on Oct. 7.
DeFi Llama, which is tracking DeFi protocols, finds that Compound’s total value of $ 9.65 billion is the fifth largest DeFi protocol in the world. Compound’s native token, comp, fell 13% on the day of the news.
Protocols like Compound aim to provide blockchain-powered traditional banking and exchange systems. But Compound’s update appeared to have a bug that resulted in users being accidentally issued Comp tokens.
This isn’t the first time a DeFi log has been lost with this type of problem – Alchemix had a similar run-in a few months ago, according to blockchain security researcher Mudit Gupta. He told CNBC that the exchange only lost $ 4.8 million in that encounter.
There is no legal obligation for users to return the tokens. And Leshner’s threat of “Dox” – releasing the information about who owns the tokens – could be difficult from a public relations perspective.
Regardless, the U.S. tax authorities would consider the amount erroneously received as income and therefore likely to be taxable.
Shiba Inu became the twelfth largest crypto in the world
Shiba Inu’s Shib token rose 42% in 24 hours this week, reaching a market cap of $ 15.4 billion.
The crypto, inspired by memes with the Japanese dog breed Shiba Inu, made the leap after Tesla boss Elon Musk tweeted about his new pup.
After helping Dogecoin, Musk bought a Shiba-Inu puppy named Floki.
A tweet with a picture of the dog on October 4th kicked off Shib’s latest bull run and propelled the coin’s value by about 370% over the past week.
But unlike Dogecoin, Musk didn’t say if he owned a Shib. Nor did he say whether he is or would like to be associated with the project behind the token.
George Soros’ family office owns Bitcoin
Soros Fund Management, the family office named after the billionaire investor, announced this week that it is trading in Bitcoin.
At a Bloomberg summit on October 5, Dawn Fitzpatrick, the fund’s chief investment officer, said that “we have some coins again, not many, and the coins themselves are less interesting than the use cases of DeFi and the like.”
The fund also invests in crypto firms like Lukka and NYDIG, Blockchain News reported, but this is the first public confirmation of the move to digital assets.
Bitcoin rose nearly 10% shortly after the news, reaching around $ 55,000.
In addition to institutional investors, the world’s richest individuals are also increasingly engaging in crypto holdings. British billionaire Simon Nixon’s family office, Seek Ventures, also said it had agreed to a move to increase cryptocurrency interests, Blockchain News reported.
To contact the author of this story with feedback or news, email Penny Sukhraj