The Breakdown First Five - Thursday, February 8, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. ARK Proposes ETH Staking ETF

ARK & 21 Shares have updated their Ethereum ETF S1 filing. The product will now use a cash creation and redemption mechanism and has proposed to stake the underlying Ethereum. There’s no indication that the SEC has engaged with issuers at this stage to direct these revisions. The staking proposal seems particularly speculative, but at least ARK is opening the discussion by making the request. 

4. CoinLedger: Bitcoiners HODLed 

Tax reporting platform CoinLedger released their data analysis for last year, finding that Bitcoiners held onto their coins throughout 2023. The average investor realized less than $1000 in gains despite Bitcoin ripping by 150%. Ethereum was the most sold coin even though Bitcoin was present in far more portfolios, supporting the narrative that “Bitcoin holders are less likely to dispose of their coins.”

3. Bakkt Warns of Shutdown

One time crypto darling Bakkt has warned it could shut down as they are almost out of runway. The firm said it might not have enough cash to last the next 12 months. Bakkt launched in 2018 in collaboration with the Intercontinental Exchange, which owns the New York Stock Exchange. It promised institutional access to crypto as well as payment rails for everyday purchases. They struggled to obtain licensing to bring that plan to fruition. 

2. Bitcoin’s Round Trip Completed

With a 3.6% bump on Wednesday Bitcoin has now filled in the drawdown following the ETF launch. Bitcoin is back trading above $44,500, the same place it was before the ETF news was sold. With GBTC outflows slowing, ETFs hitting 9 days straight of net inflows and miners easing up on sales, it seems like the January headwinds are subsiding.

1. Prometheum Says ETH is a Security

The SEC’s favorite crypto exchange, Prometheum, is set to launch ETH custody in March. Some are suggesting this would compel the SEC to decide whether or not ETH is a security. Prometheum began as the only registered exchange and became the only firm approved to clear and settle crypto securities in January. Prometheum seems set on proving that SEC registration is viable, but will they actually be able to bring their first product to market? 

Thanks for reading -NLW