Weiss Crypto Issues XRP Warning

The National Bank of Canada has ventured boldly into the realm of cryptocurrencies. The bank has made $2 million investments in Bitcoin exchange-traded funds (ETFs), changing the way conventional finance views digital assets. This choice emphasizes the evolving scene of controlled crypto investments and the increasing institutional curiosity in Bitcoin.

A Calculated Risk On Bitcoin ETFs

The National Bank of Canada decided on ETFs instead of directly purchasing Bitcoin, following a pattern among financial institutions looking for controlled access to the digital asset.

By means of Bitcoin ETFs, one can invest in Bitcoin free from the complications of direct ownership, including security of private keys or navigating cryptocurrency exchanges. This investment also coincides with a period of erratic BTC prices, which have lately ranged between $95,000-$97k.

Following The Footsteps Of Global Institutions

Regarding the reception of Bitcoin ETF, Canada is setting the benchmark. The action of the National Bank of Canada is in line with those of other big multinational companies like as BlackRock, which lately started the iShares BTC Trust in the US. The growing participation of conventional banks and asset managers suggests that Bitcoin is starting to acquire popularity as a choice of investment.Weighing Opportunity And Risk

Despite the surrounding buzz, detractors of ETFs contend they do not provide the advantages of direct Bitcoin ownership. Although ETFs depend on outside custodians, direct ownership of the cryptocurrencies gives investors total control over their money. ETF investments often come with management fees that could cut possible returns.

Still, the National Bank of Canada seems to consider ETFs as a safer, more readily available way to expose to Bitcoin free from direct ownership and related legal concerns.What This Means For Bitcoin’s Future

Bitcoin’s increasing engagement with the financial sector suggests that digital assets are gradually becoming a part of traditional finance. If additional businesses follow suit, crypto acceptance might increase even more, which would improve its price and market dynamics.

The National Bank of Canada’s $2 million investment, albeit tiny at the moment, reflects a broader trend of mainstream financial actors adopting Bitcoin as a long-term asset.

As interest in Bitcoin ETFs grows, it is uncertain whether other banks will follow suit, potentially bridging the gap between traditional banking and the cryptocurrency market.

Featured image from Gemini Imagen, chart from TradingView

Bitcoin has seen net outflows of $651 million from US spot exchange-traded funds (ETFs) since Feb. 10, raising concerns among traders about a potential drop below the $95,000 support level from the past 30 days. If this trend continues for another week, the spot Bitcoin ETF market could shrink by approximately $1.65 billion.

Despite these outflows, Bitcoin managed to push above $98,000 on Feb. 14, suggesting that bullish momentum is not entirely reliant on institutional investors. However, it remains unclear whether these movements were hedged, meaning that some entities may have simultaneously bought Bitcoin futures to offset the market impact of ETF sales.

To counterbalance ETF outflows, several companies, including Strategy (formerly MicroStrategy), Metaplanet, and KULR Technology, have increased their Bitcoin reserves. Even traditional financial institutions, such as Italy’s Intesa Sanpaolo, have recently added Bitcoin to their holdings. Additionally, the supply held by addresses with less than 1 BTC has been steadily increasing.

Stock analysts raised price targets on Coinbase and Robinhood after the exchanges crushed expectations during fourth-quarter earnings calls, according to equity research notes shared with Cointelegraph.

Soaring crypto trading volumes in the last three months of 2024 drove higher-than-expected revenues and profits for Coinbase and Robinhood — which is best known as a stock trading platform but is investing heavily in crypto.

In Q4, Coinbase posted its strongest quarter of earnings in over a year as crypto prices and trading surged after the election of US President Donald Trump. Robinhood’s Q4 profits beat consensus estimates, with crypto revenue jumping 700% year-on-year.

“The fourth quarter, and we would argue 2024 overall, was a pivotal and consequential period for the crypto ecosystem — market caps exploded, volumes jumped, new participants entered the market, and regulatory confidence completely flipped,” analysts for JPMorgan wrote in a Feb. 14 research note shared with Cointelegraph.

The surge in crypto trading was “fueled by renewed market optimism post-U.S. election,” crypto researcher Coin Metrics said on Feb. 11. Trump has promised to make America “the world’s crypto capital” and has nominated pro-industry leaders to head key agencies.

In the past 12 months, shares of Coinbase and Robinhood have risen by approximately 112% and 365%, respectively, according to JPMorgan.

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

It's Friday! No Valentine's Day plans? No worries, we've got a crypto update you'll absolutely love.

In today's newsletter, an Abu Dhabi sovereign wealth fund discloses $437 million in Bitcoin ETF holdings, President Trump's memecoin surges 50%, the SEC acknowledges proposals for Grayscale's XRP and Dogecoin ETFs and more.

Let's get started.

Abu Dhabi sovereign wealth fund declares $437 million BlackRock Bitcoin ETF investment

Abu Dhabi bought $436.9 million worth of BlackRock's spot Bitcoin ETF IBIT in Q4, according to a 13F filing with the Securities and Exchange Commission on Friday.

• One of Abu Dhabi's sovereign wealth funds, the Mubadala Investment Company, acquired the shares on behalf of the city's government, which serves as the capital of the United Arab Emirates.
• The purchase(s) came in the same quarter that BlackRock secured a commercial license to operate in Abu Dhabi.
• IBIT currently dominates the U.S. spot Bitcoin ETF market, attracting over $41 billion in net inflows since launching in January 2024, with $56 billion in assets under management, according to The Block's Bitcoin ETF Tracker Page.
• This marks one of the largest crypto-related investments ever made on behalf of Abu Dhabi.
• The Abu Dhabi government also invested in Bitcoin mining in 2023, including a partnership to develop a large infrastructure complex.

Official Trump memecoin surges 50%

President Trump's official memecoin surged nearly 50% over the last 24 hours to $23.93 — its highest level in two weeks — generating $3.4 billion in trading volume.

• The TRUMP token was listed for trading Thursday on South Korea's Upbit and also received bullish commentary from former BitMEX CEO Arthur Hayes, trumpeting its potential.
• Only 20% of TRUMP (200 million tokens) are unlocked, while 80% are allocated to a company linked to President Trump and the project's team.
• Other Solana-based tokens, such as Jupiter (20%) and Jito (15%), also outperformed on Friday, with Solana itself up over 5%.

SEC weighs proposals for Grayscale's XRP and Dogecoin ETFs

The SEC acknowledged NYSE Arca's 19b-4 filings for Grayscale's proposed conversion of its XRP and Dogecoin Trusts into spot ETFs late Thursday.

• The agency asked for public comments on the ETFs to be filed 21 days after being published in the Federal Register, after which the SEC could decide to approve, disapprove or "institute proceedings."
• A 19b-4 filing is the second part of the two-step process for proposing a spot crypto ETF, and its acknowledgment triggers the SEC's approval process.
• Grayscale launched the Dogecoin Trust in January, promoting DOGE as a tool for "financial inclusion and activism." The crypto asset manager initially launched its XRP Trust in 2020.
• Multiple firms have proposed various crypto ETFs from Litecoin to Solana in recent weeks, following perceived regulatory shifts since former Chair Gary Gensler's departure last month.

Crypto Task Force meets with Jito and Multicoin to discuss ETF staking

The SEC's Crypto Task Force met with Solana infrastructure company Jito Labs and VC firm Multicoin Capital to discuss integrating staking into ETFs, according to meeting notes from the regulator published Friday.

• The task force explored models to allow staking features currently restricted in spot Ethereum ETFs, for example, aiming to enhance investor returns and boost blockchain network security.
• Staking in crypto ETFs is seen as beneficial but faces challenges like unbonding periods and tax complexities, which the SEC is reviewing.
• The agency is apparently considering two viable paths: staking a portion of assets via service providers or using liquid staking tokens to represent staked assets.

'Make Juventus Great Again'

The investment arm of USDT stablecoin issuer Tether has acquired a minority stake in Italian football (soccer) giant Juventus, aligning with its goal of bringing digital assets mainstream.

• "Tether is looking at its strategic investments in sports franchises worldwide and integrating its digital assets, payments and newly acquired AI and biotech expertise into the sports industry," the firm said in a statement.
• "Make Juventus Great Again," Tether CEO Paolo Ardoino, who is also Italian, said on X in response to the announcement.

Looking ahead to next week

• U.S. markets are closed on Monday for Presidents' Day. UK CPI data and the latest U.S. FOMC meeting minutes are released on Wednesday. U.S. jobless claims figures are out on Thursday.
• Bank of England Governor Andrew Bailey will speak on Tuesday.
• Starknet, Sei, Avalanche and Arbitrum are all set for token unlocks over the next seven days.
• Consensus Hong Kong kicks off on Tuesday.

Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.

Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The US Securities and Exchange Commission’s Crypto Task Force met with several representatives from the cryptocurrency and traditional finance sectors to discuss regulatory issues impacting digital assets in early February. Key themes included staking, clear guidelines for exchange-traded products (ETPs) and a new framework for policing the emerging asset class.

According to memoranda available on the SEC’s website, the Crypto Task Force met with the Blockchain Association, an industry lobby group, on Feb. 4.

The lobby group suggested six priority areas the task force should focus on to “tackle issues that impact the digital asset industry.”

In addition to establishing regulatory principles and clearer guidelines, the SEC was requested to adopt a pro-innovation approach to broker-dealers, custodians and exchanges, establish uniform ETP standards, and ensure protocol staking is not classified as a security.

The Blockchain Association also called on the SEC to “review and correct erroneous interpretations of law” made by the previous administration. This “retroactive” review process was outlined by SEC Commissioner Hester Peirce earlier this month.

A federal judge in Washington D.C. has granted a joint motion to put on hold the Securities and Exchange Commission's case against cryptocurrency exchange Binance for 60 days. The order came after the SEC made the request in a joint motion filed earlier this week with the crypto exchange. It proposed a 60-day stay while a new task force, set up by President Trump's acting SEC Chairman Mark Uyeda, works on a regulatory framework for cryptocurrencies. The judge ordered the two parties to file a status report by April 14. (mengqi.sun@wsj.com; @_MengqiSun)