Daily News | Grayscale's Selling Pressure Intensified Yesterday; BlackRock Will Allocate More BTC; ERC-404 Concept Generally Rose; PANDORA Broke Through $28K

2024-02-09, 02:32

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## Crypto Daily Digest: Grayscale's selling pressure intensified yesterday, BlackRock will allocate more Bitcoin
According to Bloomberg, a new regulation that passed on Thursday requires hedge funds to provide more details to US regulators, including investment, borrowing, and counterparty risk exposure. The new regulations mainly apply to hedge funds with net assets exceeding $500 million. They need to provide more information about operations and strategy, and must report each component of the fund separately.

In addition, hedge funds must disclose details of their crypto investment strategies. Regulatory authorities have defined the digital assets included in the proposed rules but require fund companies to exclude cryptocurrencies when reporting cash and cash equivalents.

According to The Block, US Treasury Secretary Yellen stated at a Senate Banking Committee hearing on Thursday that the Treasury can use more power to combat the use of cryptocurrency by terrorist organizations. Yellen said, "We do have a lot of power to take action, but we have identified some loopholes and put forward a series of suggestions on how to strengthen the power of the Ministry of Finance."

Senator Mark Warner asked Yellen if he believed the Terrorist Financing Prevention Act was necessary, and Yellen responded, "I acknowledge that the Treasury Department is facing some restrictions, and of course we support the goals of the bill. This will help empower us to better respond to a very significant threat."

The Hong Kong government announced a legislative proposal to establish a licensing system for virtual asset over-the-counter trading service providers for public consultation. The key points include: anyone who provides any virtual asset and money spot trading services in the form of business in Hong Kong must apply for a license from the Director of Customs and Excise; Enable the chief of customs to supervise the compliance of licensed persons in combating money laundering and terrorist fundraising; Provide transitional arrangements to effectively implement regulatory systems.

According to Arkham monitoring, at 22:34 Beijing time, approximately 3,932 BTCs were transferred by Grayscale to Coinbase Prime deposit addresses and two new addresses.

According to The Wall Street Journal, BlackRock's investment portfolio may receive more <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> in the coming years. Rick Rieder, Chief Investment Officer and Head of Global Allocation at BlackRock Global Fixed Income, said, "BlackRock's funds currently have very little exposure to Bitcoin, but this situation may change with changes in public attitudes. Time will prove whether Bitcoin will become an important component of asset allocation frameworks. I believe that over time, people will become more accustomed to it."

It is reported that BlackRock's Bitcoin Spot ETF (IBIT) now holds over $3 billion in Bitcoin.

According to The Block and data from JPMorgan Chase, BlackRock and Fidelity's spot Bitcoin ETFs have already surpassed the grayscale GBTC in at least two liquidity indicators. The first indicator is JPMorgan Chase's market breadth indicator based on the Hui Heubel ratio. JPMorgan analysts led by Nikolaos Panigrtzoglou wrote in a report on Wednesday that the indicators for BlackRock and Fidelity ETFs are about four times lower, stipulating that the market breadth of these two ETFs is significantly greater than that of GBTC.

The second indicator is based on measuring the average deviation between the closing price of an ETF and its net asset value. Analysts say that this indicator specifies that in the past week, the deviation between the ETF prices and net asset value of Fidelity and BlackRock spot Bitcoin ETFs is close to that of SPDR gold stock ETFs, indicating a significant improvement in liquidity. Meanwhile, analysts added that the deviation of GBTC ETFs remains high, indicating low liquidity.

Analysts point out that although these two indicators do not cover all dimensions of market liquidity—especially market depth—there is evidence that BlackRock and Fidelity's Bitcoin ETFs have advantages over GBTC in certain liquidity indicators related to market breadth. Analysts also pointed out that if GBTC fees do not decrease, the fund may experience more capital outflows and lose funds to other ETFs, especially BlackRock and Fidelity's Bitcoin ETFs.

According to Glassnode data, Bitcoin's computing power (14-day moving average) has reached a historic high of 566 EH/s. Previously, on February 2, the difficulty of Bitcoin mining was raised to 75.5 T. In the past three weeks, Bitcoin's computing power has surged by 12% since the low point caused by severe freezing in Texas, USA. If computing power grows at this rate, the next mining difficulty adjustment (scheduled around February 15) is expected to increase by 7% to 12%.

According to Clarkmoody.com, the increase in computing power may advance the expected halving date (as of April 19 according to the publication), and there are approximately 10,629 blocks left in the Bitcoin network to halve.

In terms of data churn, the supply of <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> (ETH) staked on the Ethereum network has reached 25% of its total supply. This milestone occurred nearly a year after the upgrade of Ethereum Shapella, which currently exceeds 30.1 million ETH, is worth approximately $73 billion, and has been staked. Since the upgrade of Shapella, the number of staked Ethereum has surged, with a total of over 942,023 validators staked. However, as the number of participants in staking increased, the staking reward decreased from the highest 8.6% to less than 4% at present.

Market data shows us that the concept of ERC-404 has generally risen.

Among them, PANDORA is currently quoting $28,694.20, with a 24-hour increase of 69.8%; DEFROGS is currently quoting $2,078.86, with a 24-hour increase of 509%; and ROCK is currently quoting $53,720.85, with a 24-hour increase of 20044%.

It is also recognized that Pandora, the ERC-404 project in the experimental stage, posted airdrop related pictures on social media and stated that the airdrop season is approaching. Interested users can follow.

## Macro: Unemployment benefits data exceeded expectations, Fed's Barkin believes there is no need to rush to cut interest rates
On Thursday, the United States announced the number of initial claims for unemployment benefits last week. It is reported that the number of initial claims for unemployment benefits in the United States for the week ending February 3 recorded 218,000, with an expected 220,000, a previous value of 224,000. Last week, the decline in initial jobless claims in the United States was greater than expected, indicating that despite the recent surge in layoffs, the job market remains strong.

Due to the continued suppression of market expectations for recent interest rate cuts by speeches from Federal Reserve officials, coupled with a larger than expected decrease in initial jobless claims in the United States last week, the belief that it is impossible to cut interest rates in the near future has been strengthened, and US bond yields have further rebounded. The benchmark 10-year US Treasury yield once approached Monday's over a week high of 4.17%, while the interest rate sensitive 2-year US Treasury yield began to approach Monday's one month high of 4.48%. The US dollar index rebounded and closed 0.08% higher at 104.14. After the expected rate cut by the Federal Reserve was countered, money market assets reached a record high of $6.02 trillion.

Spot gold fell towards the 2020 level, then rebounded and returned above 2030, ultimately closing down 0.04% at $2,034.21 per ounce; Spot silver rose 1.66% to close at $22.58 per ounce.

After the decline in US fuel inventories last week and Israel's rejection of Hamas's proposed ceasefire conditions in Gaza, oil prices continued to rise. WTI crude oil rose 3.24% to $76.41 per barrel; Brent crude oil rose 3% to $81.7 per barrel.

The trend of the US stock market is complex, with inconsistent opening performances. It has experienced a decline during the day, but ultimately closed slightly higher. The Dow Jones Industrial Average rose 0.13%, the S&P 500 Index rose 0.07%, and briefly broke through the 5000 point mark for the first time in history. The Nasdaq rose 0.24%.

Goldman Sachs predicts that the likelihood of the US economy falling into recession in the next year is less than 15%.

Economist Eliza Winger said, "The initial application data shows a relatively low layoff rate. Unadjusted data indicates that, except for some weather related disturbances, the recent trend in the number of applications is similar to last year. However, due to a series of recent layoff news, the number of unemployment benefits applications is still likely to increase in the coming weeks."

Last month, the Federal Reserve kept interest rates unchanged for the fourth consecutive time. Powell and other officials have downplayed market expectations for a rate cut in March, stating that the policy-making committee hopes to see more data to boost confidence and confirm that inflation is steadily moving towards the target level of 2%.

On Thursday, Richmond Fed Chairman Barkin reiterated that policymakers can remain patient when considering the timing of interest rate cuts, and pointed out the current strong labor market and sustained slowdown in inflation.

As a member of the Federal Reserve's voting committee this year, Barkin said they will wait for "a few more months" of inflation data, and he "really wants to see the trend of slowing inflation continue and expand." He pointed out that commodity prices have played a huge role in slowing inflation.

<div class="blog-details-info">
<div>Author:**Byron B.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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