The Breakdown First Five - Friday, March 1, 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. Merrill Lynch to Allow Bitcoin ETFs

Merrill Lynch alongside Wells Fargo will shortly allow their customers to access Bitcoin ETFs according to Bloomberg sources. The large wirehouses have been a bottleneck for the new products, but you wouldn’t know it from how they are trading. Most financial advisors use one of the big platforms and are currently not allowed to offer the ETFs to their clients. The dam appears to be breaking, with rumors that most broker dealers are preparing to give the green light. 

4. House Committee Rebukes SEC Accounting Guidance

The House Finance Services committee has approved a resolution that would rescind the SEC’s SAB 121 guidance. The accounting note functionally prohibits banks from offering crypto custody by forcing customer assets to be held on balance sheet. Tom Emmer called SAB 121 illegal due to it circumventing the usual public comment and oversight process. The resolution will still need to pass a vote in the House and Senate before becoming effective.

3. Citron Advises Coinbase Short

Notorious short-selling firm Citron has put out a public call to short Coinbase against a Bitcoin long after the exchange shut down due to excessive traffic. Citron referred to Coinbase as “bloated” and called “one of the most compelling trades in the crypto market.” Their last confident crypto call was to short Ethereum at the November 2022 bottom, claiming the network has “as many common sense flaws” as FTX. Crypto twitter is ready to squeeze the short. 

2. Massive GBTC Outflows

Almost $600M rushed out of GBTC yesterday, the largest day of outflows in more than a month. Blackrock inflows more than made up for it as the ETF put its second straight day seeing more than $600M added to the fund. Analysts expect the outsized sales of GBTC are related to the Genesis bankruptcy after the firm was approved to liquidate $1.9B of GBTC shares two weeks ago. 

1. February Hottest Month Ever

February was the best month ever for Bitcoin with an $18,000 gain. The largest ever green candle closed up 44%, similar to the performance of November and December 2020. Bitcoin is around a 12% move from all-time highs roughly 7 weeks out from the halving, a truly unprecedented position for this stage in the cycle.