Daily Digest 12/1
Insight on the biggest stories of the day.
Grayscale Prepares to Sue SEC Over Spot Bitcoin ETF
Getting a spot ETF approved in the US has proved to be a challenge for every institution that has applied. The closest we have gotten so far is a futures based BTC ETF from Proshares and a couple of others. The SECs reasoning for not approving a spot ETF is that the price action of BTC is to volatile making it “not safe” for users in the eyes of the SEC.
Grayscale is one of the companies who’s spot ETF was declined and they are taking action by suing the SEC over the decision. Grayscale is also one of the biggest asset managers of digital currencies in the traditional stock market whit a current holding of $38 billion worth of Bitcoin.
“Last night our attorneys at Davis Polk sent a letter to the SEC arguing that approval of Bitcoin futures-based ETFs, but not Bitcoin spot-based ETFs, like $GBTC, is ‘arbitrary and capricious,’ and therefore in violation of the Administrative Procedure Act (APA) VP of Grayscale Craig Salm said.
They are not the first ones in the digital asset space to sue the SEC over misconduct. Founder of Terra, Do Kwon, is also suing the SEC after he was served in what he calls “intimidating and embarrassing manner.” If the SEC does not want to give clear regulation than crypto companies are going to get the answers they want by taking them to court.
Ethereum Is Well On Its Way To Becoming One Of The Most Productive Assets In The World — Here’s Why
With ETH being the second most popular cryptocurrency in the world it may even have a shot a being one of the productive assets in the world based on factors brought up by Crypto analyst Croissant.
The main feature that separates ETH from BTC is that has smart contract capabilities meaning you can build apps off of it and code programs. Ethereum smart contracts now hold 26.86% of the total ETH supply or $143 billion is locked in ETH smart contracts. “These are decentralized applications that power virtual economies, stable coins, and many other things home to Ethereum. of that, 26.86 in smart contracts, 77% is locked in DeFi.”
Another staggering stat is that even with the enormous growth of the Ethereum network in the pas year 50% of the supply has not moved in that same time frame. This for the most part means that buyers are not selling.
If anything the supply on exchange continues to drop further proving that investors have no intent to sell as they move it over to cold storage. “We are very quickly moving from the mindset of “I buy ETH because it appreciates,” to the mindset of “I buy ETH to do things.”
FTX U.S. Now Lists Ethereum NFTs
FTX grows its name almost everyday with a new partnership or advertising deal but today they are trying to attract more users who are already down the rabbit hole with NFTs. You will now be able to trade your Bored Ape, Punks, and any other Ethereum based NFTs on FTX.us.
FTX launched its NFT marketplace in October but until now it only supported Solana based products. With the launch of ETH NFTs they are putting themselves in an even more direct competition with Coinbase than they were before. Coinbase plans on launching their marketplace in the near future and is the biggest crypto exchange in the US currently.
The biggest fish in the NFT marketplace is OpenSea currently but big players like FTX and Coinbase will be trying to eat away at that market share. The main difference between a marketplace like FTX and OpenSea is that FTX will hold custody of each token like they do for other currencies. FTX is also charging a 2% fee as opposed to 2.5% on OpenSea.
Another big advantage that FTX will have in the US market is that they also acquired Ledger X over the summer. This acquisition landed them a broker dealer license and will allow them to offer fully regulated derivatives trading for their users.
It has been a few months now since ETH started burning some of its supply and they have just crossed 1 million ETH burned the other day. Looking at EIP-1559 now it has had its pros and cons but this is proof that the deflationary mechanism is working.
The main purpose of the update was to make gas fees lower and more predictable in price as well but with the growth of the network expanding rapidly it is hard to keep that under control. Since the update gas fees have been either really high or really low depending on the time you’re trying to use it.
The amount of ETH on exchanges is also rapidly decreasing along with tokens being burned from circulation makes it more and more obvious ETH is being bought with conviction.