Hodler’s Digest, Jan. 7-13 – Cointelegraph Magazine

Spot Bitcoin ETF receives official approval from the SEC

The U.S. Securities and Exchange Commission has officially approved the United States’ first regulated spot Bitcoin exchange-traded funds. On Jan. 10, the regulator approved applications from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, and Franklin Templeton — just one day after a false announcement posted from the SEC’s official Twitter account wreaked havoc on markets. The first day of trading reached more than $4.5 billion in total volume across ten ETFs, with Grayscale Bitcoin Trust as a top performer, handling $2.3 billion in volume on day one.

SEC did not have 2FA enabled: X safety team on fake Bitcoin ETF post

The U.S. SEC did not have two-factor authentication enabled on its main X account, allowing a hacker to gain access to it and publish a false approval of a spot Bitcoin exchange-traded fund (ETF). According to X (formerly Twitter), an unidentified actor gained control of the phone number associated with the account and used that to gain access to the SEC’s official X page. This type of hack is commonly known as a SIM swap. The security breach was followed by requests from senators calling on the SEC to provide a report to Congress within the next few days. The Federal Bureau of Investigation is investigating the security incident.

Venezuela’s unlucky petro coin to shut down Jan. 15 after 6 years: Report

Venezuelan national cryptocurrency the Petro will cease to operate on Jan. 15, according to press reports. The coin was created in 2018 to help the country evade United States sanctions but was never widely used. The state-run, oil-backed crypto was launched after the country’s fiat currency, the bolivar, declined sharply under pressure from United States sanctions and after Bitcoin had already gained a firm foothold in the country. The Petro was not a central bank digital currency (CBDC). The Central Bank of Venezuela announced plans to create a CBDC in 2021, but those plans never came to fruition.

Sam Bankman-Fried retains new counsel ahead of sentencing hearing

Former FTX CEO Sam “SBF” Bankman-Fried has filed notice in federal court that he has retained a new counsel before his sentencing hearing for seven criminal charges. In a Jan. 9 filing, Torrey Young and Marc Mukasey of Mukasey Young LLP said they represented Bankman-Fried. SBF’s legal team also filed a sealed document, which could suggest a possible appeal to his November conviction. A jury found Bankman-Fried guilty on seven charges of fraud, conspiracy to commit fraud and conspiracy to commit money laundering last October. His sentencing is scheduled for March 28, overseen by Judge Lewis Kaplan in New York.

USDC issuer Circle files for IPO in the United States: Report

Circle Internet Financial, the issuer of USD Coin, has filed for an initial public offering (IPO) in the United States, according to Reuters. The company expects the IPO to proceed after the U.S. Securities and Exchange Commission completes the review process, adding that this is still subject to market conditions. In 2021, Circle announced plans to go public through a merger with blank-check company Concord Acquisition Corp, initially valued at $4.5 billion. The transaction was later called off.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $43,619, Ether (ETH) at $2,528 and XRP at $0.57. The total market cap is at $1.7 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Ethereum Name Service (ENS) at 72.21%, Ethereum Classic (ETC) at 45.25% and Sui (SUI) at 37.28%.

The top three altcoin losers of the week are Klaytn (KLAY) at -20.20%, THORChain (RUNE) at -10.88% and SATS (100SATS) at -10.64%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“’Order granting [spot Bitcoin ETFs] accelerated approval’ it’s over. Thank God.”

Eric Balchunas, ETF analyst at Bloomberg

“Our bull case, and we think the probability of the bull case has increased with this SEC approval, our bull case is $1.5 million by 2030.”

Cathie Wood, CEO of ARK Invest

“While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin.”

Gary Gensler, chairman of the U.S. Securities and Exchange Commission

“We believe that tokenisation has the potential to revolutionise the way investments are managed and traded.”

Victor Jung, head of digital assets at Hamilton Lane

“The steps taken today are a significant improvement over the SEC’s track record of regulation by enforcement.”

Patrick McHenry, U.S. representative

“We believe crypto values are American values. Blockchain technology has demonstrated the potential to enhance financial inclusion […] and provide new wealth-building opportunities outside of Wall Street.”

Kristin Smith, CEO of the Blockchain Association

Prediction of the week

Bitcoin price sells-off after ETF approval — Have investors turned bearish?

Bitcoin price dropped by 6.8% between Jan. 11 and Jan. 12, confirming bears’ theory of a sell-the-news-style event occurring after the approval of a spot Bitcoin exchange-traded fund (ETF). The much-anticipated event ensued after a 75% rally in the 90 days leading to the initial trading on Jan. 11. This partially explains the lack of excitement and the subsequent price correction down to $43,180.iN

Traders are now questioning whether investors are becoming bearish after multiple failed attempts to break above $47,000 in the last week. On one hand, there is some rationale behind the fear, meaning market makers and whales that tried to front-run the spot ETF issuers by buying ahead of the launch might be forced to sell at a loss — if this hypothesis is valid. Furthermore, Bitcoin miners might feel pressured to sell some of their holdings given that the halving is less than 100 days away.

There’s uncertainty about how spot Bitcoin ETFs will perform after weekends due to possible market volatility. Inadequate information about how the ETFs work might lead to panic sell, contributing to recent price declines in the cryptocurrency market.

FUD of the Week

Apple India blocks Binance, 9 other crypto exchanges weeks after FIU notice

Apple’s App Store in India has blocked Binance, KuCoin, Bitget, Huobi, OKX, Gate.io and MEXC crypto exchange apps weeks after the Indian government issued a noncompliance notice against nearly a dozen off-shore crypto exchanges. These exchange applications are no longer accessible to new users in India. The Indian Ministry of Finance’s Financial Intelligence Unit issued a notice to the exchanges in late December for illegally operating in the country.

Vanguard users threaten to close accounts after firm blocks spot Bitcoin ETFs

Asset manager Vanguard said it won’t offer the new spot Bitcoin ETFs on its brokerage platform as they do not align with its traditional offerings, pushing some customers toward the exit door. “Spot bitcoin ETFs will not be available for purchase on the Vanguard platform,” it said in a statement to The Wall Street Journal. The company, however, has significant indirect exposure to Bitcoin as it is one of the largest shareholders of MicroStrategy. The stock is also available through at least five mutual funds offered by Vanguard.

Ethereum devs air concern over Vitalik’s plan to increase gas limit

Ethereum co-founder Vitalik Buterin is advocating for a “modest” 33% gas limit increase to potentially improve network throughput. His proposal includes increasing the gas limit to 40 million from the current 30 million, claiming it would allow more transactions for each block, theoretically increasing the overall throughput and capacity of the network. Ethereum developers, node operators and users, however, have yet to agree on that suggestion, which may have adverse effects on the network.