The Weekly Wrap – ETFs, All-time highs, Token burns, MT. Gox and ECB

Oct 22, 2021 - 4 min read

1. Here we go – ETFs for everyone

The Facts:

  • ProShares launched the first U.S. Bitcoin ETF (BITO:US) on October 19th.
  • The fund tracks BTC futures rather than the asset itself.
  • With more than $1bn in volume on its opening day, and after reaching $1bn AuM in a record breaking two days, BITO represents one of the most significant launches of any ETF.

Why it’s important:

  • Many more ETFs are following with Valkyrie’s ETF se to launch on Friday, VanEck getting approval to launch next week and Grayscale applying to convert their GBTC into an ETF.
  • An increasing ETF offering will enable many more institutions to get indirect exposure to Bitcoin and crypto assets.
2. BTC and ETH record new all-time highs

The Facts:

  • On October 20th, BTC recorded a new all-time high at $67’276.79.
  • ETH followed on October 21st with its new all-time high of $4’361.18
  • Fun Fact: BTC briefly flipped the Swiss Franc.

Why it’s important:

  • Aside from the investor narrative for BTC, long-term holders may view BTC also as an independent metric to measure inflation and thus the stability of fiat currencies.
  • New ATHs for ETH can be a double-edged sword. While investors may profit from new ATHs, developers and actual users of the platform’s smart contracts suffer from higher transaction fees, a challenge Ethereum is already struggling with.
3. The 17th BNB burn was completed

The Facts:

  • Binance buys back BNB on a quarterly basis using its profits and then burns them.
  • The exchange has pledged to burn 50% of its BNB token supply, which was fixed at 200’000’000 coins.
  • On Monday, the 17th quarterly burn was completed with BNB 1.3m being burned at a value of $640m, leaving a total supply of BNB 166’801’148 (83%).

Why it’s important:

  • After complaints by clients who lost the utility token in the past, Binance decided to initiate the BNB Pioneer Burn Program in September 2020.
  • The aim is to encourage early adopters to experiment and allow for mistakes.

This is an opportunity for countries to hold part of their reserve in bitcoin as a hedge against inflation and against central banks.

4. Mt. Gox rehabilitation plans approved

The Facts:

  • The infamous hack of the Japanese exchange back in 2014 resulted in a loss of approximately BTC 850’000.
  • On October 21st, creditors approved a compensation plan as communicated by the trustee which is reportedly holding BTC 150’000.
  • Affected customers will have to wait another month until the confirmation order is expected to become final and binding.

Why it’s important:

  • More than seven years after losing their funds, affected customers can hope for compensation. The price of BTC never exceeded $1’000 in 2014.
  • The terms for the compensation plan are yet to be disclosed, with the important question being if it will be denominated in FIAT or BTC.

Number of the week

Ranking of BTC among Top Assets by Market Cap

5. The ECB loses its inflation watchdog

The Facts:

  • The German Bundesbank announced on Wednesday the resignation of its president Jens Weidmann, due to “personal reasons”.
  • After a ten-year tenure and six years before the end of his term, Weidmann wants to open a new chapter for himself and the Bundesbank.
  • Weidmann is a prominent advocate of tight monetary policy on the ECB Governing Council.

Why it’s important:

  • The question is whether the German Government will appoint a similar hawkish person as successor or not. The worry is that a different candidate may be more supportive of a more lose monetary policy.
  • This decision will indirectly influence the monetary policy of the ECB and thus inflation levels over the coming years.

In other news

  • Coinbase lands exclusive NBA sponsoring deal. (via CNBC)
  • Shopify allows merchants to mint and sell NFTs. (via Cryptonomist)
  • The first Decentralized Metaverse Festival takes place this week. (via Metaverse Festival)

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