SEC Selects Funding System for BTC ETF, Base Gains Traction and more
The United States Securities and Exchange Commission has opted for a cash creation and redemption mechanism to address concerns about market manipulation when it approved the launch of a spot bitcoin (BTC) exchange-traded fund (ETF).
Using cash creations means that new shares of a Bitcoin ETF are created or released only through cash transactions, unlike traditional stock and commodity-based ETFs, which typically use a model where market participants hold the underlying assets directly.
Originally proposed by Hashdex — one of the asset managers seeking regulatory approval for its investment vehicle — the strategy was designed to prevent intraday price manipulation, according to Hashdex's initial filing from August.
At the regulator's request, other asset managers – including BlackRock, ARK Invest and Greyscale – have incorporated the strategy in recent weeks.
Some speculate that the SEC's next move could target demand for a large-scale regulated market, possibly requiring applicants to include the Chicago Mercantile Exchange for physical transactions. However, this may not be the case.
In a recent meeting with applicants, the SEC set a Dec. 29 deadline for filing final S-1 amendments, warning that applicants who miss the deadline will not be considered for January certifications.
The latest hurdle on the road to approval involves the resignation of Barry Silbert of the digital currency team – detailed below. This week's CryptoBiz also explores the continued growth of the Base network, the rise of microstrategy stock, and more.
As Barry Silbert leaves, Grayscale is restocking the Bitcoin ETF app
Crypto asset manager Grayscale filed an amended S-3 filing with U.S. securities regulators on the same day Silbert — the CEO of parent company Digital Currency Group — announced his resignation from Grayscale's board of directors. Some crypto market analysts speculate that Silbert's release could greatly increase the chances of Greyscale successfully converting the Greyscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
Barry's release was @Sonnenshein's X-Mas present.
What does @bsilbert have to do with leaving grayscale?
Grayscale held 9 meetings with the SEC, as shown in the table below (h/t @JSeyff)
Today, there are only pending cases against DCG in court… pic.twitter.com/NjjdWq0F3a
— Ram Ahluwalia CFA, Lumida (@ramahluwalia) December 26;
The base network sees steady growth, exceeding $735 million in TVL
Coinbase's Base network has been showing steady growth, although its volume has slowed since its initial peak. As of December 24, Base Total Value Locked (TVL) reached nearly $735 million, a 4 percent increase from the previous week. Over 6.97 million transactions have been completed on the network in the last 30 days, with a daily rate of 3.45 transactions per second.
China's Web3 VC to launch $10 billion accelerator fund: Report
Chinese venture capital firm GBA Capital has announced a $10 billion commitment to set up a Web3 fund. According to local news reports, the fund will invest in virtual reality-focused startups, seeking to transform the Guangdong-Hong Kong-Macao economic zone into the world's “meta-property capital.” Since the beginning of the year, the region has been experiencing an influx of Web3 startups and overseas migration. GBA Capital was established in Hong Kong by China Europe International Financial Group.
MicroStrategy shares soar 350% on 2023 Bitcoin ETF boost
MicroStrategy sees its share price rise more than 350% in 2023, largely on expectations following the approval of a spot Bitcoin ETF in the United States. The company's massive exposure to Bitcoin is supporting the stock's performance. MicroStrategy and its subsidiaries hold 189,150 BTC, representing a total purchase price of approximately $5.9 billion and an average purchase price of $31,168 per coin. Its exposure to cryptocurrency is leading some analysts to label the stock “essentially a leveraged Bitcoin ETF.”
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