The Breakdown First Five - Wednesday, April 24, 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. New ETF Holders Disclosed

The latest round of filings has revealed some small wealth management firms are taking a big bet on Bitcoin. Two regional firms with around $300M under management have added $20M worth of Fidelity’s ETF each, representing a 5% and 6% allocation respectively. There’s still plenty more disclosures to roll in over the next month. This could be what Bitcoin adoption looks like, hundreds of small independent RIAs making high conviction moves.

4. ETH ETF Approval Unlikely

Even the biggest bulls are calling it, the ETH ETFs are unlikely to be approved in May. Although asset managers have updated their filings this week, a lack of SEC engagement is a really bad sign. Bloomberg analysts have 25% odds, but say this week’s filings are a “final nudge” to get the SEC’s attention, but likely in vain. Meanwhile a comment letter has raised eyebrows, with a Georgetown professor calling the SEC’s delay tactics “embarrassing”.

3. MT Gox Distribution Inches Closer

After more than a decade of waiting, it looks like this is the month that Mt Gox creditors will finally get their Bitcoin back. K33 is concerned that the $9B distribution could “spook the market” over the coming weeks. We still don’t know whether the distribution is actually coming this time, but creditors have reported updates to their Bitcoin denominated claims. Around 142,000 Bitcoin are expected to be distributed once the process finally gets underway. 

2. Venezuela Adopting Tether

With sanctions leniency set to run out for Venezuela this week, their state-run oil company is reportedly using tether in preparation to evade sanctions. Reuters reporting suggested that some contracts are already being settled in Tether. While it makes for a splashy headline, oil traders noted that Tether won’t pass compliance at any regulated firm, so middle men are being used. Tether says they will work hard to freeze assets in compliance with sanctions.

1. Blockchain Association Sues SEC 

The Blockchain Association and the  Crypto Freedom Alliance of Texas have sued the SEC over the newly introduced dealer rule. The rule requires any institutional liquidity providers that manage over $50M in assets to register with the SEC. Does that apply to DeFi liquidity pools? Probably, but the SEC won’t explain how. The lawsuit claims this rulemaking is “arbitrary and capricious”, adding that it seems that no economic impact study was done for crypto markets.