Crypto ETFs: What is it all about?

Institutions have been buying large amounts of BTC over the past few months

GM, frens!

Ambire here with our weekly newsletter. Today we’ll talk about crypto ETFs, Mastercard crypto card program, why Ethereum still dominates the decentralized market, MakerDAO expanding their asset portfolio with $700m U.S. treasury bond investment, and a UK civil servant that got caught mining crypto at a nuclear research facility. Let’s get down to it:

Big players and crypto ETFs. What's the deal here?

Crypto is having an unprecedented inflow of capital thanks to the recent market dynamics. With investors still seeing crypto as a safe haven asset, BTC and the top cryptocurrencies are reaping the benefits.

Institutions like Fidelity, MicroStrategy, Grayscale, and Square have been buying large amounts of BTC over the past few months, pushing up its price to new highs. Over the past 24 hours, BTC reached $30,000 a high not seen in more than a year.

The emergence of crypto ETFs has further fuelled this influx of capital into the market. ETFs are investment funds that track the performance of an underlying basket of assets, such as stocks, bonds or commodities. They are a way for investors to get exposure to the asset without having to own it directly. Normally, an ETF holds assets and is backed by a trust company or financial institution, which allows for the fund to be traded on markets.

BlackRock, one of the world’s largest asset managers, recently filed for a Bitcoin ETF which was approved by the U.S Securities and Exchange Commission (SEC). This ETF is expected to bring more institutional investors into the crypto market and drive even more capital into the ecosystem.

With the increasing interest from large investors and institutions, it is expected that crypto assets will continue to move higher in 2023, as they become more widely accepted and integrated into traditional finance. As such, many investors are looking to make the most of this bullish period by investing in the burgeoning crypto markets. With so much capital pouring into the space, it is becoming increasingly clear that we're getting closer to a bullrun, with the potential for massive profits in the coming years.

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Mastercard expands crypto card program to streamline market access

Mastercard is expanding its Engage program, a platform that links potential card issuers with partners to provide technical expertise, in order to bring crypto card programs to the market. Through this program, crypto firms can take advantage of Mastercard's global network and access their credit card services.

The initiative builds on the company's previous crypto credentials program, which aimed to bridge the gap between traditional finance firms and digital currency firms. This program is intended to simplify the card issuance process and provide a secure, trusted platform for users who want to transact with cryptocurrencies.

An interesting development to say the least, the program is just another example of how Mastercard is embracing crypto and the digital age. With many other financial institutions beginning to explore new ways to integrate crypto, it's likely that the landscape of digital currency will change drastically in the near future. These programs could be a major step towards making crypto mainstream and giving users more options to transact with digital currency.

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Why Ethereum still dominates the decentralized market

Ethereum’s dominance in the decentralized finance (DeFi) market is evident when examining its marketcap, TVL on its smart contracts, and total number of DApps. While other networks have seen an emergence of decentralized applications, Ether’s market share of over 40% is still the highest. Ethereum’s leadership has been largely attributed to its first mover advantage and the network effect that it has created over time, but in reality there are many more factors that have led to its success.

Ethereum ecosystem has the highest number of active developers. This allows the network to continuously improve its technology and create new products, processes, and features faster than its competitors.

More than 700,000 validators also support the Ethereum network, with staking participation at an all time high. The 32 ETH threshold limit per validator has helped drive more users to the network.

Trading Ethereum’s futures is also easier compared to its competitors. Ether’s future contracts are essential for institutional trading practices like hedging and trading with leverage. Ether’s cash-settled futures were added to the Chicago Mercantile Exchange in February 2021, making it the only cryptocurrency, apart from Bitcoin, that has reached the world’s largest derivatives exchange. With Ether’s aggregated open interest standing at $5.4 billion, it is clear that the demand for Ethereum is high and growing.

Ethereum is also still a leader in NFTs, despite the emergence of other networks. Ethereum still accounts for more than 90% of the global NFT market share with sales totaling around $400 million in the past 30 days. This is largely due to its infrastructure that facilitates interoperability, support for smart contracts, and scalability solutions like layer two protocols. Ethereum’s infrastructure, mature developer community and high liquidity are all key factors that contribute to its sustained supremacy in the decentralized finance (DeFi) market.

The Ethereum network is an ever-evolving platform that will continue to be the most popular choice for many developers and users. And that is not going to change anytime soon.

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MakerDAO expands asset portfolio with $700m U.S. treasury bond investment

MakerDAO, the issuer of DAI stablecoin, has taken steps to further diversify its asset portfolio, purchasing an additional $700 million in U.S. Treasury bonds. This brings its total bond holdings to $1.2 billion, and increases its exposure to low-risk, liquid assets.

The purchase was made through Monetalis Clydesdale Vault, a digital asset manager that is part of the DeFi lender Monetalis Group. According to the statement, the purchase was completed successfully and MakerDAO is now positioned to benefit from strong returns on its investments.

This move is part of MakerDAO's broader strategy to diversify its asset holdings in order to provide more security for its users. MakerDAO seems to be trying to play it safe by investing in government bonds, while also trying to increase its profitability through a diversified portfolio. The DAO has also proposed to raise the DAI Savings Rate to 3.33%, which could further increase its market capitalization by increasing the demand for holding DAI if approved.

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Controversy at UK nuclear research facility: civil servant forced to resign after mining crypto on the premises

A UK civil servant has been forced to resign after a lengthy investigation into crypto mining activity conducted on the premises of a British nuclear research facility. Karl Beacham was found to have mined Litecoin at his nuclear research workplace during the height of the COVID-19 pandemic.

The investigation, which began after UK Atomic Energy Authority’s (UKAEA) chief operating officer received an anonymous tip, revealed that Beacham had been mining Litecoin between December 2019 and June 2020. The UKAEA stated that Beacham had not obtained the necessary authorization to conduct such activity and that his actions put the security of the facility at risk.

The fella himself claimed that he had been previously granted permission to mine crypto, but apparently, the permission was withdrawn later. It's not clear how much crypto he mined during that period and if he was successful in this endeavor.

While this incident involving has sparked controversy and raised concerns about security breaches, it is worth noting that mining cryptocurrencies can hold potential benefits for certain individuals in poverty-stricken regions. Cryptomining, when conducted responsibly and within legal boundaries, has the potential to provide an alternative source of income for those in need.

In impoverished areas where access to stable jobs and financial services is limited, the ability to mine crypto can offer a glimmer of hope and economic empowerment. By harnessing the computational power of their devices, individuals can participate in mining networks and earn digital currencies as a form of compensation for verifying transactions on the blockchain. This presents an opportunity for financial inclusion, enabling individuals to generate income and potentially escape the cycle of poverty.

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Other worthy reads:

Interesting thread from Red Phone:

A good article on macro from Kuppy:

A thread on crypto narratives from Louis:

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Fun page: our weekly meme collection

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That's all for now, frens.

We'll see you next week. And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

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