The Breakdown First Five - Monday, April 22, 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. Tax Forms Unworkable

The IRS has released a draft version of a crypto tax form that would foist reporting requirements on unhosted wallets. Despite the overwhelming public response that defining wallets as brokers would be unworkable and makes little sense, the form suggests that proposed rules will remain unchanged. At best, this reporting would create a database of wallet owners. At worst it could crush wallet startups with a massive compliance burden. 

4. Saylor Done Selling

Michael Saylor is winding up his sale of Microstrategy stock. The sales were announced in November and surrounded the maturity of a huge stock option. Saylor has unloaded around 400,000 shares, netting a tidy $370M payday. The sales will reportedly conclude later this week and could relieve some overhang on the highly volatile stock.  

3. Mini-GBTC Undercuts on Fees

Grayscale’s spin off Bitcoin ETF has announced rock bottom fees of 0.15%. The mini-GBTC product is aimed at stopping the bleeding by competing on costs. The 0.15% fee comes in under all rival products and will be the lowest fee ETF once launched. 10% of existing GBTC holdings will automatically be transferred into the new product. The fund is still awaiting approval from the SEC. 

2. Record Fees

The halving saw record fees paid to miners. The halving block was the most profitable in history with $2.4M in fees spent. High fees continued throughout the halving day, driven by a frenzy of memecoin activity. Fees exceeded the block reward for more than 100 blocks, with the day bringing in $78M in total. That made Saturday the most lucrative day ever for Bitcoin miners, more than triple the previous best. Fees have now subsided, back to an average of $10. 

1. Block Reward Halved

Bitcoin has completed the quadrennial halving, reducing issuance to 3.125 BTC per block. Almost 95% of all Bitcoin that will ever exist have now been mined, with the annual inflation rate falling to just 1.5%. This halving has made Bitcoin harder money than gold, which sees around 3% of supply mined each year. There was no ‘sell the news’ effect, but will this halving usher in a renewed bull run as we’ve seen in previous cycles?