An ongoing source of frustration for many members of the U.S. cryptocurrency and exchange traded fund (ETF) communities is the lack of a bitcoin ETF. The Securities and Exchange Commission (SEC) has continuously blocked efforts from the ETF community to bring products based on the largest digital currency to market, but some market observers believe a bitcoin ETF can still become a reality.
“I would have thought we were not going to see anything here in 2018 on bitcoin ETPs, but if [the SEC] is out there asking for some comments around the ProShares filing, they are not wasting time, I know that,” said Amplify ETFs CEO Christian Magoon in an interview with WealthManagement.com.
Earlier this year, Amplify introduced the Amplify Transformational Data Sharing ETF (BLOK), an actively managed ETF dedicated to companies with exposure to blockchain technology. BLOK, which is almost four months old, has over $177 million in assets under management, a decent figure for an ETF of that age.
Many ETF issuers expected the launch of bitcoin futures, which debuted on two U.S. exchanges in December, would help facilitate the debut of ETFs related to the cryptocurrency. Following the launch of bitcoin futures on Cboe and CME, a slew of ETF sponsors reapplied to launch bitcoin funds, but were still rebuffed by the SEC.
While the Securities and Exchange Commission (SEC) opened a comment period on bitcoin ETFs in early January, soon thereafter the commission told ETF sponsors to withdraw their applications for funds related to the largest cryptocurrency.
“But, maybe they are getting a little bit more serious. Maybe it’s because the market has cooled off in terms of cryptos. That would be a big coup for ProShares, and, of course, they’re not a stranger to controversy given all of their inverse and leverage products,” said Magoon. “My guess is their user base is pretty hedge fund-y, trader-y, and would probably love bitcoin and exchange traded products (ETPs).”
Recently, the SEC said it is evaluating whether or not to let ProShares, a major issuer of ETFs, list the ProShares Bitcoin ETF and the ProShares Short ETF. ProShares orignally filed plans for those products in September.
Assuming a bitcoin ETF or ETFs come to market in the U.S., that could significantly increase investor adoption of the digital currency because while many investors have signaled interest in digital assets, they are reluctant to buy and hold alt-coins over exchanges and in digital wallets. The ETF wrapper would ameliorate those problems.
Coinbase Will Reward You For Holding Your Crypto
Coinbase is for the first time allowing general users to earn rewards by simply holding cryptocurrency, starting with the Tezos (XTZ) token.
Tezos uses an alternative consensus mechanism to proof-of-work mining – the system built into the largest cryptocurrency by market cap, bitcoin. Called proof-of-stake, the alternative mechanism rewards network users for holding onto its coins and thereby helping protect the network.
Coinbase’s 5 percent estimate is based on Tezos’ last 90 days of staking returns. The firm also notes that there’s an initial holding period of 35–40 days, after which stakers will start to see rewards appear in their accounts every three days.
The exchange has also added Tezos to Coinbase Earn, a program aimed at educating the public about crypto, and will give out XTZ to participants completing educational videos.
Coinbase soft-launched staking for both Tezos and decentralized finance token Maker (MKR) this March on Coinbase Custody.
As Coinbase wrote at the time, Coinbase Custody primarily serves institutional clients holding large amounts of crypto. This latest initiative brings staking to even the smallest of Tezos holdings, however.
Coinbase also recently rolled out 1.25 percent interest on users’ holdings of the dollar-pegged stablecoin USDC.
$19 million worth of Bitcoin (BTC) seized in dark web drug probe
The U.S. government has seized $19 million worth of BTC from a drug trafficker, who allegedly laundered funds through the cryptocurrency on the original dark web marketplace known as “Silk Road.”
The U.S. Attorney’s Office for the Southern District of New York announced the news on Thursday, saying that the trafficker, Hugh Brian Haney, 60, was arrested near Columbus, Ohio. In 2017 and 2018, Haney allegedly transferred bitcoins representing drug proceeds he had earned through Silk Road to an account held at a company involved in the exchange of bitcoin and other cryptocurrencies. He claimed falsely that the source of these bitcoins was from mining.
Haney is charged with one count of concealment money laundering and one count of engaging in a financial transaction in a criminally derived property. The former count carries a maximum jail term of 20 years, while the latter a maximum term of 10 years.
Homeland Security Investigations (HSI) special agent-in-charge Angel M. Melendez said:
“HSI special agents employed blockchain analytics to uncover and seize bitcoins valued at $19 million and usher Haney out of the dark web shadows to face justice in the Southern District of New York.”
“Cryptocurrency is a great idea” – Ron Paul
During a recent “Squawk Alley” interview, Former Republican congressman and presidential candidate, Ron Paul- discusses how he is in favor of cryptocurrencies as well as block change technology. Apparently, he enjoys competing currencies and believes they are a good idea.
He also believes that the governments only have the right to step in to prevent fraud from taking place. In the interview, Paul states that, “the government has a role. And if somebody has a case that there is fraud, I think it should be investigated.” Paul then goes on to state that what he wants to do “is legalize the freedom of choice, absent blatant fraud.” Agreeably so, this is exactly the type of perspective that the crypto world needs.
Throughout the interview, Paul compares crypto to gold in many ways. He points out how both assets are competing with traditional fiat money. He discusses how our government has never been “very tolerant of competition, and they’re not even tolerant with using the Constitution to compete with the fiat dollar. Because gold and silver, you can’t use it.”
This isn’t the first time that Ron Paul has discussed his views on crypto. Back in 2014, the Former Republican Congressman displayed his concerns about the foundation of crypto and Bitcoin. However, he acquired a bearish pro-crypto outlook on the future of fiat money. Paul believes that the dollar won’t last long as “they all self-destruct.” According to Paul, the only competition for the dollar is the euro and yen- which “isn’t any good.”
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