Grayscale's analysis highlights the potential impact of Bitcoin exchange-traded funds (ETFs) on the cryptocurrency's market dynamics, particularly in relation to the upcoming halving event. Traditionally, Bitcoin halvings have been associated with periods of price appreciation. However, Grayscale suggests that the introduction of ETFs could fundamentally alter the demand-supply equation, mitigating the sell pressure typically exerted by miners post-halving. With the current mining rate yielding approximately $14 billion annually at a Bitcoin price of $43,000, Grayscale notes that maintaining current prices requires substantial buy pressure.
Following the halving, which halves the mining rewards to 3.125 Bitcoin per block, the annual buy pressure needed decreases to $7 billion, easing the sell pressure on the market. The report underscores the role of miners in exerting selling pressure on Bitcoin prices post-halving, as they face reduced mining rewards without necessarily seeing a proportional decrease in mining costs. To maintain profitability, miners often sell more of their Bitcoin holdings, thereby increasing supply and potentially depressing prices. However, Grayscale suggests that the recent introduction of nine Bitcoin ETFs on Wall Street could serve as a counterbalance to this sell pressure.
These ETFs have already garnered significant demand, reaching a combined assets under management (AUM) milestone of $10 billion within their first 20 trading sessions. With the potential to absorb sell pressure and provide a steady source of demand, Grayscale anticipates that Bitcoin ETFs could fundamentally reshape the cryptocurrency's market structure in a positive manner, akin to the effects of another halving event.
FTX, facing bankruptcy proceedings, has opted to sell its subsidiary, Digital Custody, for a significantly reduced price of $500,000. Originally acquired for $10 million, Digital Custody was intended to provide custodial services for FTX US and LedgerX. However, with the lack of integration into FTX's operations and the uncertain future of FTX US, the subsidiary's value to the estate has diminished. FTX's legal team explained that since FTX US has not been restarted and with the sale of LedgerX, Digital Custody is no longer deemed essential to the debtors' business.
Terence Culver, Digital Custody's original CEO and seller, has provided financing for the sale. The decision to sell to CoinList was made after evaluating multiple offers, with consideration given to the ability to swiftly complete the transaction and Culver's beneficial relationship, which is expected to expedite regulatory approval. While the sale has received approval from FTX's legal team, the committee, and the ad hoc committee of non-U.S. customers of FTX.com, FTX retains the right to seek a superior offer until three days before the closing. In the event of the buyer's failure to complete the deal, a reverse termination fee of $50,000 will be imposed. Despite efforts to restructure, FTX clarified in a court hearing that there are no plans to relaunch the firm and instead focuses on repaying customers in full.
Adedeji Owonibi, the Co-founder of A&D Forensics, stresses the urgency for regulatory measures in Nigeria's cryptocurrency sector to mitigate financial crimes, particularly money laundering. Speaking at a training session for cryptocurrency compliance specialists, Owonibi highlighted the lack of regulatory oversight as a loophole allowing various illicit activities to thrive unchecked. He emphasized the necessity for Nigeria to implement comprehensive regulations governing cryptocurrency operations within the country, emphasizing that without proper laws in place, offenses cannot be effectively addressed.
Despite the recent reversal of the cryptocurrency transaction ban by the Central Bank of Nigeria (CBN), which now permits banks to engage with Virtual Assets Service Providers (VASPs), Owonibi explained that the focus of compliance specialist training is to ensure strict adherence to relevant laws during interactions with VASPs. In an interview, Owonibi reiterated the importance for Nigerian financial institutions to enlist the services of compliance specialists to prevent illicit funds from flowing through their platforms, emphasizing the role of compliance laws in thwarting criminal activities and ensuring that banks are not exploited for money laundering or other unlawful purposes.
Moreover, Owonibi underscored the imperative for enhanced training of security officials to effectively combat financial crimes. While acknowledging the efforts of the Nigerian government in training some law enforcement agents as compliance specialists, he emphasized the need for broader initiatives to ensure all security personnel are well-equipped to tackle financial malfeasance. Despite the CBN's decision to allow virtual asset service providers to operate accounts with banks, local crypto analysts advocate for a reassessment of regulatory requirements by the Nigerian Securities and Exchange Commission (SEC) to facilitate licensing for domestic cryptocurrency exchanges, thereby bolstering regulatory oversight in the country's cryptocurrency landscape.