Wednesday, 6 March 2024

Market Summary

Market Summary 6 March 2024

Bitcoin Price: US$63,724.01 (-6.63%)
Ethereum Price: US$ 3,553.65 (-2.04%)

Millions in BTC and XMR are potentially stolen following reports of an exit scam from the major darknet marketplace Incognito Market, where users have been unable to withdraw their cryptocurrencies amidst accusations against the administrators. Despite assurances from the administrator “Pharoah” that issues were due to system upgrades, subsequent reports have seemingly confirmed the exit scam, coinciding with a Bitcoin rally. In a separate development, the U.S. Securities and Exchange Commission (SEC) accuses Binance.US of being uncooperative in an ongoing investigation, alleging failure to provide information regarding customer assets. Binance.US refutes these claims, asserting compliance with requests and accusing the SEC of unfounded allegations. Meanwhile, Astar Network launches Astar zxEVM on Polygon’s AggLayer, facilitating cross-chain transactions and enhancing web3 expansion in Japan’s enterprise, retail, and government sectors. This integration marks a significant milestone in enabling a seamless multichain ecosystem, according to Polygon co-founder Sandeep Nailwal.

On March 5, United States spot Bitcoin exchange-traded funds (ETFs) reached a historic milestone with a record-breaking $10 billion in trading volume, despite Bitcoin’s subsequent 12% decline. Notably, BlackRock’s iShares Bitcoin ETF (IBIT) led in volume, followed by the Grayscale Bitcoin Trust (GBTC) and the Fidelity Wise Origin Bitcoin Fund (FBTC). Concurrently, the team behind cross-chain bridging protocol OrdiZK (OZK) allegedly executed a rug pull, absconding with $1.4 million worth of investors’ cryptocurrency, as reported by CertiK. Moreover, Bitcoin briefly surged to its all-time high above $69,000, sparking enthusiasm in the crypto industry and driving gains in memecoins like Floki and Baby Doge, which saw returns of up to 289% in the past week alone. This surge in Bitcoin’s price also prompted development activity within the ecosystem, exemplified by projects like Bitmap introducing a BRC-420 metaverse protocol native to the network, indicating ongoing innovation and growth in the cryptocurrency space.

Bitcoin surged to a new all-time high of approximately $69,324, marking the culmination of an 846-day journey from peak to trough and back again. Beginning in 2021 with remarkable highs, Bitcoin’s price plummeted to $15,460 in 2022 before gradually recovering. By June 2023, positive momentum began, with Bitcoin reaching $30,709, and by January 2024, it surpassed $46,000. However, the approval of spot Bitcoin ETFs by the SEC in January prompted a brief decline. Yet, by February 2024, Bitcoin experienced a resurgence, reaching $69,324 on March 5. This milestone was driven by factors distinct from the 2021 rally, including institutional investment spurred by the ETF approval. As Bitcoin eyes mid-April and the impending halving event, the future remains uncertain, but optimism persists regarding its potential for further growth. Concurrently, spot Bitcoin ETFs saw significant inflows, with BlackRock’s iShares Bitcoin Trust leading the way, while Tether introduced a recovery tool amid USDT’s $100 billion market capitalisation, signalling continued evolution and adoption in the cryptocurrency market.

Since its conversion to an exchange-traded fund (ETF) in mid-January, Grayscale’s Bitcoin holdings in its Grayscale Bitcoin Trust (GBTC) have decreased by nearly 33%, with approximately 5,450 Bitcoin, valued at around $368 million, leaving the trust on March 4 alone. This brings the total outflows since the conversion to $9.26 billion. Before the conversion, Grayscale held about 620,000 BTC. The launch of Grayscale’s spot Bitcoin ETF allowed investors to redeem their shares for Bitcoin, contributing to the outflows. Additionally, GBTC’s higher fees compared to other ETFs like BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund have likely played a role in the continued outflows. GBTC currently holds 420,682 BTC, worth an estimated $28.8 billion, but market observers speculate on when the “Bitcoin bleed” will end. Despite GBTC’s struggles, other spot Bitcoin ETFs have exceeded expectations, with March 4 marking the second-largest volume day for the 10 spot Bitcoin ETFs, indicating continued interest and investment in the cryptocurrency market. Meanwhile, Stanford University’s student-run Blyth Fund allocated around 7% of its portfolio to Bitcoin investments following a pitch by a computer science major, signalling growing institutional interest in cryptocurrencies. Additionally, asset manager BlackRock filed an amendment to incorporate Bitcoin exposure in its Strategic Income Opportunities Fund (BSIIX), stating that it may purchase shares in funds with direct exposure to Bitcoin, reflecting the increasing acceptance and integration of cryptocurrencies into traditional finance. Finally, announced a $100 million infrastructure program, Fetch Compute, aimed at expanding computing capabilities for developers, with GPU rewards for tokenholders starting on March 7, highlighting the intersection of artificial intelligence and blockchain technology in the crypto space.


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