The Breakdown First Five - Wednesday, May 15, 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. Wisconsin Buys Bitcoin

The Wisconsin State Investment Board has disclosed a $163M position in Bitcoin ETFs. The Board manages state trust funds, with this allocation likely part of the state pension. The Wisconsin Retirement System has around $156B in assets, so this is just a drop in the bucket. Still, the WRS is one of the more highly regarded state pension systems in the US, fully funded and the 10th largest. The purchase should lend credibility to Bitcoin as an investable asset. 

4. Mining Reduction

Bitcoin miners appear to have begun unplugging miners in response to the halving. Hashrate has fallen to a two month low after topping out on halving day. Two older but extremely popular rigs, the S19XP and the M40S++, are both operating at a loss in current conditions. Mining firms have been replacing these rigs and optimizing energy efficiency, but these steps can only go so far. Unless Bitcoin prices rise, it could be a difficult summer for miners. 

3. New Grounds for ETH ETF Rejection?

After digging through piles of paperwork, Scott Johnsson believes the SEC could be up to something regarding the ETH ETFs. A decision on the ETFs is due next Thursday. Johnsson found a question for public comment on whether the ETFs were properly filed as commodity products, implying the SEC might take this opportunity to declare ETH a security. While the rejection is a near certainty, the reasoning will matter for the expected lawsuits. 

2. Powell: Be Patient 

After April PPI inflation came in slightly hot with downward revisions to March data, Chairman Powell said the inflation data was “sort of mixed.” He said that higher than expected inflation data this year meant that “we’ll need to be patient and let restrictive policy do its work”. The stance is still the same, higher for even longer but rate hikes are off the table for now. 

1. Tornado Cash Dev Convicted

Alexey Pertsev has been convicted of money laundering and sentenced to 5 years and four months in prison in the Netherlands. The verdict focused on the lack of controls built into Tornado Cash, which allowed it to be used by criminals. The court found that Pertsev was responsible for money laundering on the platform years after it was launched. Commentators noted that this verdict would have limited application in the US Tornado Cash case.