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Following in Grayscale’s footsteps, new Bitcoin trust goes public in Canada

Following in Grayscale’s footsteps, new Bitcoin trust goes public in Canada

Canada-based investment manager Ninepoint Partners has launched trading for shares of the firm’s Bitcoin Trust on the Toronto Stock Exchange.

According to an announcement today, Ninepoint has completed an initial public offering, or IPO, for its Bitcoin Trust for CAD$230 million, or roughly $180 million. The investment firm said that it would be issuing three different classes of 17,990,491 units at a price of $10, more than 7 million of which are available for trading on the Toronto Stock Exchange under the ticker symbols BITC.U and BITC.UN for U.S. and Canadian dollars, respectively.

Ninepoint Co-CEO and managing partner John Wilson referred to the move as the “largest initial public offering of a Bitcoin investment fund in Canada to date.“ The firm said the trust would have an annual management fee of 0.70% of its net asset value, calculated daily and paid monthly.

“We believe our institutional quality trust structure and lowest management fee of any listed Bitcoin investment fund in Canada will be a winning combination for continued investor interest,” Wilsonsaid. “With this initial offering, we are laying the foundation for the success and growth of our Digital Asset Group.”

Like Grayscale’s crypto funds in the United States, Ninepoint said its objective was to expose new investors to digital currencies like Bitcoin (BTC). A fraction of the size of Grayscale with a reported CAD$7 billion in assets under management — $5.5 billion — the investment firm said it would not be exploring selling shares of the trust in the U.S.

Bitcoin price drops under $30K as ‘moment of truth’ arrives, says trader

Bitcoin (BTC) retested the $30,000 support on Jan. 27 as a day of losses culminated in violation of the psychologically significant price level.

BTC/USD 1-minute candle chart (Bitstamp). Source: Tradingview

BTC price spooks amid GameStop row

Data from Cointelegraph Markets and Tradingview showed any bullish momentum left in Bitcoin dissipate on Wednesday after rejection at highs near $33,000.

“Another $30,000 retest for #Bitcoin,” Cointelegraph Markets analyst Michaël van de Poppe summarized.

Despite aiming for another test of monthly lows, Bitcoin’s price action hardly surprised regular market participants. For fellow trader Scott Melker, it was a case of “wait and see” until the longer time frames completed.

“6 hour looks the same as 4 hour. 12 hour needs 10 more hours, so barely worth watching. But the potential is there. Bottom line: no clear signal yet, but worth keeping an eye if they can build up,” he wrote in part of a series of tweets on Wednesday.

The resolution of current price action would, nonetheless, be a “moment of truth” for BTC/USD, he said.

As Cointelegraph reported, attention was broadly focused on GameStop stock throughout the day, after its 700% fortnightly gains caught the attention of both the media and regulators.

Likewise defying expectations was movie theater chain AMC, which gained 240% in a day after avoiding bankruptcy.

Hodl on, Redditors vow

Bitcoin, despite being a more cost-effective buy-in than at almost any time since Christmas, failed to hold the limelight.

“People have maximum interest at $40,000 per #Bitcoin, but almost zero interest at $30,000 per #Bitcoin. Interesting,” Van de Poppe added.

Data from on-chain monitoring resource Whalemap highlighted an area at $29,300 as likely support in the event of a $30,000 breakdown.

Wallet inflows giving likely support and resistance levels for BTC/USD. Source: Whalemap

Also worth noting is the Dollar Currency Index (DXY) showing its traditional inverse correlation with BTC as the markets opened on Wednesday. The DXY rebounded to its highest level in nearly two weeks while BTC and stocks pulled back. 

Dollar currency index (DXY). Source: Tradingview

Cryptocurrency skeptics meanwhile used the GameStop debacle to pour scorn on Bitcoin and those who argued that decentralized investment was a beneficial phenomenon.

“Attention #Bitcoin HODLers: The only people who will walk away with any real winnings from the #GameStop short-squeeze will be those smart enough to sell. Those who HODL will likely lose it all. Bitcoin HODLers will meet the same fate if they fail to realize their paper profits,” gold bug Peter Schiff tweeted.

A glance at the subreddit used for stocks plays, r/Wallstreetbets, meanwhile showed that user strategies focused on hodling, not selling, their newly profitable stock — at the expense of unprepared hedge funds.

“Retail reflexivity in action in traditional markets,” commented trader Philip Swift, adding: 

“Never underestimate the power of the masses.”

Quotes in this article taken from previously published sources have been lightly edited.


Bitmain’s Antminer says Bitcoin rig sales won’t be affected by CEO departure

Bitcoin (BTC) mining rig manufacturer Bitmain has issued a notice to customers stating that business operations will resume as normal in light of former chairman and CEO Jihan Wu’s departure from the company.

Orders of Bitmain’s ASIC mining rigs were previously halted temporarily in 2020 during an internal power struggle at the Beijing-based hardware company.

In a dramatic saga that saw Bitmain’s two co-founders, Micree Zhan and Wu, attempt to oust one another from the leadership of the company, Zhan temporarily stopped a Shenzen subsidiary from shipping products to customers, as reported by local outlet The Block Beats at the time.

On Wednesday, hours after Wu amicably left the company (after buying $600 million worth of shares from Zhan and other shareholders), the team behind Bitmain’s flagship Antminer product released a statement telling customers to expect business as normal:

“Antminer is here to inform you that product delivery and sales services will not be affected by Bitmain’s internal changes. Our sales policy for customers remains unchanged, and all signed contracts will continue to perform in accordance with the terms and conditions.”

Bitmain was founded in 2013 by Zhan and Wu, and by 2018, it had become the largest manufacturer of ASIC machines for Bitcoin mining in the world. The company also runs two mining pools, Antpool and BTC.com, which collectively account for around 20% of all Bitcoin mining and 30% of Bitcoin Cash (BCH) mining.

The company’s influence has seen it at the forefront of several Bitcoin-related dramas over the years, not least during the 2017 hard fork that saw Bitcoin Cash break away from Bitcoin. Bitmain sided with Bitcoin Cash during the hard fork, which arose as a result of ideological disagreements over aspects of Bitcoin’s design — specifically, the size of blocks.

Despite uncertainty regarding the leadership of the company, Bitmain secured a contract for 15,000 of its Antminer S19 series machines from Riot Blockchain, a Nasdaq-listed cryptocurrency mining firm, in December 2020 in a deal worth $35 million.

Concerns about stockpiles of unsold merchandise may have been silenced somewhat over the New Year period as Bitcoin mining profitability increased by over 330%, according to the latest data from BitInfoCharts.

Top Ethereum conference Devcon is delayed again

Devcon, one of the biggest conferences for the Ethereum community and developers, has been delayed again due to uncertainty around the coronavirus pandemic.

According to a Tuesday announcement, the Ethereum Foundation decided to hold off on the conference in Bogota instead of going ahead with its previously announced August target.

“We want to make sure we do this responsibly and that as many people as possible are able to make the trip from all around the world, which seems unlikely by early August,” the blog post reads.

The Devcon team said that it expects to announce a new date for the event soon:

“While nothing is guaranteed given the ongoing pandemic, we’re hopeful that a new date announcement is possible soon with the availability of COVID-19 vaccines ramping up now, and updated pandemic-related trends improving.”

The Ethereum Foundation added that the community still expects other Ethereum-themed events in the summer, including the Ethereum France-hosted EthCC event that is now scheduled to take place in July. The foundation promised to provide more information like ticketing and speaker applications as soon as it is able to make date-related announcements.

Devcon has been on hold since the Ethereum Foundation postponed Devcon VI in May 2020. The last Devcon V conference took place in October 2019 in Osaka. In 2018, the Devcon event was attended by 3,000 people from all over the world.

Tokenized agriculture could provide economic relief to Argentine farmers

Argentina’s brittle economy — stricken by endemic problems that have only worsened amid the COVID-19 pandemic — has sparked rising unrest in the country’s agricultural sector. Earlier this month, representatives of the bulk of national producers rejected President Alberto Fernandez’s government’s decision to suspend all exports of corn as part of its efforts to stem inflation and exert downward pressure on domestic corn prices. 

The farmers’ strike followed a similar wave of resistance in the oilseed and soy industries in December 2020. The rise in labor unrest poses a challenge for the stewards of the national economy, given that agriculture contributes 60% of national exports and roughly 10% of Argentina’s gross domestic product. 

With the peso in freefall, some overseas entrepreneurs are seeing an opportunity for the uptake of a technology-driven solution that could provide an alternative to help farmers weather Argentina’s prolonged economic distress. In particular, CoreLedger and tech firm Abakus intend to launch a peer-to-peer marketplace that would establish a digital, blockchain-based “barter economy” between agricultural producers in Argentina.

Tokenizing agricultural assets, the partners claim, would help farmers to hedge against inflation and access liquidity both nationally and internationally. Such a marketplace would enable the exchange of tokenized titles by farmers for any other tokenized asset on the platform — essentially establishing a form of parallel, asset-backed currency for local producers.

Abakus CEO Martin Furst contended that this setup would bring “greater agency to farmers,” whereas the CEO of CoreLedger, Johannes Schweifer, claimed that the approach could offer critical relief. Unlike cash and stock-based saving plans, their argument is that agricultural-backed tokens functionally become stablecoins, backed by physical assets, and are therefore well-suited to a domestic context stricken by currency devaluation. Schweifer argued:

“In an inflation-stricken country, access to physically-backed assets can be the difference between surviving and thriving for these farmers.”

In the aftermath of a 3.8% rise in consumer prices in October 2020, persistent peso volatility and tensions in government amid the country’s ongoing, fraught negotiations with the International Monetary Fund, local producers may indeed be more receptive to trying alternative fintech strategies that can help them to escape the ruinous economic dynamics in the country.  

Alongside blockchain entrepreneurs, cryptocurrency exchanges also appear to be alert to a market opportunity in the region’s struggling economies, with Brazil’s largest Bitcoin (BTC) exchange —Mercado Bitcoin — recently announcing plans to expand across Latin America, including Argentina. Data from Useful Tulips suggests that Argentina currently ranks seventh in the region in terms of peer-to-peer Bitcoin trade volume.

Major payments firm SIA to launch DLT-based secondary credit marketplace

SIA, an Italian company specialized in e-payment services, is working on a blockchain-based system to enable secondary credit trading.

The upcoming platform will allow banks, funds, and financial operators to negotiate secondary credit transactions via blockchain, SIA announced on Jan. 26.

A spokesperson for SIA told Cointelegraph that the company plans to pilot the platform in Q2 2021, while the full-scale launch is expected in the second half of this year.

SIA’s new credit trading platform is being developed in collaboration with fintech startup WizKey. The Milan-based firm is building financial solutions with a focus on structured finance products and the management and transfer of credit.

By implementing blockchain, SIA intends to provide financial operators with instant and secure access to credit portfolios as well as the underlying data and documentation. “The certification of information and workflow via blockchain provides to all secondary market purchasers the trust necessary to know that the data is consistent and certified, increasing the speed of transaction and the liquidity of the market,” a representative of SIA said.

WizKey CEO and founder Marco Pagani said that the blockchain-powered project aims to create a “transparent, liquid and efficient secondary market for NPLs thus benefiting the entire country system.” Daniele Savarè, director of innovation and business solutions at SIA, also noted that the project will be developed in a standardized in line with European regulations.

SIA has been working with blockchain-related developments previously. In June 2020, SIA completed a project on cross-chain interoperability targeting services for banks and financial institutions.

Australian payments giant Eftpos becomes Hedera node operator

Australia’s top national debit infrastructure operator, Efptos, has been announced as the newest member of Hedera’s Governing Council. 

Alongside becoming the 17th council member, Eftpos will also become Hedera’s first network node operator in Australia. Other council members include Google, IBM, Boeing, and Deutsche Telekom.

While Electronic Funds Transfers at Point of Sale (EFTPOS) is a type of payments technology used around the world, it’s also the brand of a specific system used for such payments in Australia and New Zealand.

Eftpos CEO, Stephen Benton, described its increasing engagement with Hedera as a core component of its digital payments innovation strategy, predicting that crypto-powered micropayments will drive positive disruption across Australia’s economy:

“We are excited to participate in the development of next-generation micropayments technology that has the potential to open up entirely new ways of conducting business for Australian enterprises and enable compelling new experiences for Australian consumers,” he said.

The news follows a successful proof-of-concept last year conducted by Eftpos and Hedera into micropayments, with the initiative piloting frictionless sub-cent transfers using Eftpos’ API and Hedera’s AUD stablecoin. Eftpos Entrepreneur in Residence, Rob Allen, said:

“By combining the new Eftpos API infrastructure with a consumer wallet-based experience, digital identity, and an AUD-based stablecoin using Hedera’s superfast, secure and low-cost distributed network, the PoC’s objective was demonstrably achieved.”

“Use cases like this simply are not possible on other public blockchains. Along with several partners, we are now exploring a variety of use cases that this combination of technologies enables and the options to commercialize them,” Allen added. 

Mance Harmon, Hedera Hashgraph’s CEO and co-founder, predicted collaboration between Eftpos and the other council members will mak “micropayments and other innovative financial models a reality for millions of consumers and billions of IOT devices” in Australia.

Hedera has expanded its Australian presence over the past year, with a government-backed supply chain traceability platform launching on Hedera’s Hashgraph in September.

FTX lists GameStop after Reddit-fueled 200% rally in two days

Crypto exchange FTX has listed GameStop, the global videogames retail chain, after the stock became by far the most popular choice on Reddit’s infamous Wall Street Bets, a community dedicated to trading stock market options.

The FTX listing on Wednesday morning allows crypto traders to get in on the action as well. The offering comes as part of FTX’s tokenized stocks program, which features both spot and futures markets for popular stocks and indices. This allows crypto traders to get exposure to stocks using crypto and stablecoins, in addition to fiat options.

The GameStop stock, trading under the ticker GME, has generated massive media attention after a dramatic rally resulted in more than ten-fold gains since Jan. 12.

The rally is largely attributed to Wall Street Bets, a subreddit for stock market traders. GameStop has long been one of the favorites of the community, though it shared the spotlight with other high growth stocks like Tesla or Nio.

GameStop itself has been in rough financial shape for a long time, as digital video game delivery steadily eroded its brick and mortar business in the past few years. The COVID-19 closures further depressed the company’s prospects.

These factors likely contributed to Melvin Capital Management’s decision to enter a short position in the stock, betting that its price would go down. Unfortunately for the company, someone at Wall Street Bets discovered this short position due to mandatory disclosures with the Securities and Exchange Commission.

The subreddit then rallied behind the stock in a concerted effort to squeeze the short out — force the price to go up so much that the short position must be liquidated. After GME topped out at $320 in pre-market trading, it appears the Redditors were successful in their mission as the hedge fund announced it closed its position.

The unfortunate trade reportedly caused a $3.75 billion dollar loss for the fund since the start of 2021, amounting to more than 30% of its capital. Other hedge funds “bailed out” Melvin Capital Management with a $2.75 billion investment. Still, some details of the story remain unclear. For example, the initial short position discovered by Redditors was just $55 million in put options. The losses from buying options are limited to 100% of their value, which could suggest that other positions had a strong contribution to the supposed multi-billion dollar loss.

The story has a very similar analog within the crypto space. In the summer of 2020, the Chainlink community rallied against an announced short position opened by a company named Zeus Capital. The details of that event led many to question the true motives of announcing the supposed short position.

As of writing, GME fell by over 33% since getting listed on FTX.

Dutch Bitcoin exchange drags central bank to court over wallet KYC rule

Dutch Bitcoin exchange platform, Bitonic, has filed a preliminary injunction at a Rotterdam court seeking the suspension of a wallet verification rule enacted by the central bank.

Back in November 2019, De Nederlandsche Bank, or DNB, mandated crypto exchanges to ensure their users comply with stringent Know Your Customer protocols. These rules included verification steps for withdrawal wallets, which Bitonic called a nuisance.

At the time, Bitonic was only one of three licenses granted by the DNB out of 38 applications to the central banks by crypto exchanges. Indeed, 25 out of 38 applicants also sent a joint letter to the DNB asking for greater clarity about the need for such stringent compliance protocols.

According to the company’s announcement, the DNB has reportedly failed to address concerns raised by Bitonic over the controversial KYC rule. The exchange also revealed that an independent compliance firm recently provided expert advice on the matter stating that the central bank’s actions lacked any legal merit.

For Bitonic, the introduction of sweeping wallet verification protocol violates existing customer privacy laws. “We believe it is of crucial importance that a judge considers DNB’s position so that it becomes clear whether the requirements are legitimate,” the company added in its announcement.

Commenting on the goal of the lawsuit, the Bitonic announcement reads:

“Our objective is to be able to quickly halt the comprehensive processing of personal data imposed on us. We want to return to the situation where we ourselves determine, on a risk-based basis, whether we ask the customer to prove his management of the wallet.”

A spokesperson for Bitonic told Cointelegraph that the company regrets being forced to seek redress with the courts but the action was necessary given the DNB’s reticence to engage in dialogue over the issues. The Bitonic representative also revealed that other exchanges have expressed support for legal action:

“We do not know if similar proceedings are prepared by other parties, but trust that the court will recognize the broader relevance for not just the crypto-industry but also its customers.”

As previously reported by Cointelegraph, the additional KYC requirements are causing dissatisfaction among some crypto traders in the country. Bitstamp has come in for some criticism over the exchange’s perceived lack of pushback against the DNB’s policies.

The DNB did not reply immediately to Cointelegraph’s request for comment. 

Bitcoin held by public companies has surged 400% in 12 months to $3.6 billion

Technology researcher Kevin Rooke has been tracking the Bitcoin (BTC) holdings of public companies throughout the past two years. According to Rooke, public firms now hold over $3.6 billion worth of BTC.

In 2019, public companies had merely 20,000 BTC on their books. This figure has increased to 105,837 BTC in 12 months. Rooke said:

“Last year, public companies held fewer than 20,000 BTC on their balance sheets. Today, 19 public companies hold 105,837 BTC on their balance sheets, valued at over $3.6 billion.”

Bitcoin holdings of public companies. Source: Kevin Rooke

Today, MicroStrategy is the biggest Bitcoin holder with 70,784 BTC with GalaxyDigital Holdings a distant second with over 16,400 BTC. Square Inc., meanwhile, is the largest company by market cap among public company holders by with roughly 4,700 BTC. 

Why is institutional demand for bitcoin surging?

In a year, public companies alone accumulated around 85,000 BTC, which is equivalent to $2.67 billion.

This trend is indicative of the rapidly growing institutional demand for Bitcoin, as portrayed by the surging trading activity on Grayscale and CME.

Grayscale BTC holdings vs. BTC price. Source: Bybt.com

Grayscale’s products and the CME Bitcoin futures market both primarily cater to institutions, and they have seen a massive uptick in volume since mid-2020.

Institutions are growing their exposure to Bitcoin because of the expectations that BTC would eventually evolve into an established alternative to gold.

Amid rising inflation and liquidity injections from central banks, investors and corporations are seeking ways to hedge their holdings and portfolios. Winklevoss said:

“Inflation robs you of your life’s work. The Argentine peso has lost 50% of its value against USD in the past 3 years. And that’s saying a lot given the current state of the U.S. dollar. No wonder search interest in #Bitcoin is going through the roof.”

If the Biden administration aggressively introduces more stimulus and efforts to ease financial conditions, it would likely create a more favorable environment for Bitcoin and gold to rally.

What analysts expect in BTC in the near term

In the foreseeable future, despite the compelling macro environment, analysts are slightly cautious.

Still, in the bigger picture, macro analysts say that they lean towards the bullish scenario for Bitcoin. Alex Krüger, an economist and Bitcoin trader, said:

“$BTC is stuck in a range within a range: 29K-35K. It can break either way. The key reason I lean bullish is interest rates. Exuberance has rinsed off the system dramatically, as relected in falling rates. This is a bull market, and traders are now bearish. That’s bullish.”

There are also expectations that more institutions would accumulate Bitcoin in the coming weeks, due to brightening market sentiment.

Weekly BTC perpetual futures funding rates. Source: Digital Assets Data

On top of this, the derivatives market has reset, with the futures market becoming less crowded. The trader further noted:

“Funding is either flat or negative. Perpetuals are trading below spot. The perp-spot basis has not been negative for this long since pre Nov elections, And the annualized quarterly basis has dropped from 25%-28% a week ago to 7-10% now. All sings of a healthy cool-down.”