Grayscale

Cardano pares most of its Q1 losses as ADA rebounds 60% in a month — What’s next?

March 25, 2022 Coin Telegraph

ada

ADA price is now in a notorious selloff area that coincided with the price crashing by 40% in January 2022.

Cardano (ADA) inched higher on March 25, putting itself on course recoup a great portion of losses that it had incurred in the first two months of this year.

Cardano: not so bullish yet?

ADA's price jumped by around 7.5% in trading Friday, reaching $1.19 over a month after bottoming out at around $0.75. The Cardano token's huge rebound move netted around 60% in gains. Nonetheless, it remained at the risk of losing its upside momentum in the coming weeks.

At the core of this bearish analogy is a multi-month descending channel pattern, with a reliable track record of causing and limiting ADA's rebound attempts simultaneously since September 2021.

The channel's upper trendline particularly has served as an ideal selloff zone, now being tested again as resistance, as shown in the chart below.

*ADA/USD daily price chart. Source: TradingView*

ADA's daily relative strength index, now at 71.80, also alerts about its "overbought" nature. In a perfect scenario, an RSI reading above 70 leads to selloffs in an attempt to neutralize the underlying asset's excessive valuation. That puts the Cardano token at an imminent pullback risk toward the descending channel's lower trendline.

More signs of ADA's potential pullback move come from its weekly charts. Notably, the Cardano token's rebound has been having it test its 20-week (near $1.21) and 50-week (near $1.31) exponential moving averages (EMA) as resistances. They were instrumental in capping ADA's gains in January 2022.

*ADA/USD weekly price chart. Source: TradingView*

Alex Benfield, analyst at Weiss Ratings, said ADA needs to reclaim $1.20 as support, a level that kept its bullish bias intact multiple times in 2021. He noted that if the Cardano token manages to do so, its likelihood of seeing a medium-term rally will be higher, adding:

"Until it clears that resistance, this move is in danger of losing momentum,"

ADA "fundamentally bullish"

Alexander Mamasidikov, co-founder of crypto wallet service MinePlex, believes Cardano's interim outlook is bullish despite its overbought risks.

The executive believes that ADA's ongoing growth momentum is more fundamental than technical, noting that the token started spiking after it became one of the assets included in the Grayscale Investment's new altcoin fund, dubbed Smart Contract Platform ex Ethereum fund (GSCPxE).

BREAKING: Grayscale launches 'Smart Contract Fund' for $ETH Competitors

Fund's Weighting:$ADA: 24.63%$SOL: 24.27%$AVAX: 16.96%$DOT: 16.16%$MATIC: 9.65%$ALGO: 4.27%$XLM: 4.06%
— Altcoin Daily (@AltcoinDailyio) March 22, 2022

"The growth is proof of how impressed investors are with respect to the revolutionary role of the Cardano blockchain in the fast-growing smart contract-powered evolution of Web3.0," Mamasidikov asserted, albeit agreeing that levels near $1.50 could play spoilers to ADA's upside move. Excerpts:

"Drawing from ADA’s growth trajectory, the $1 price level remains the crucial support level while the coin’s resistance is pegged at $1.5 in the short to medium term."

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Grayscale Launches Fund Consisting of Cardano (ADA), Solana (SOL), Polkadot (DOT) and Four Additional Altcoins

March 24, 2022 The Daily Hodl

Cardano Rallies 16%, Breaking Months-Long Downtrend

March 24, 2022 The Crypto Briefing

Grayscale Investments Launches Smart Contract-Focused Diversified Fund

March 22, 2022 Bitcoin.com

Grayscale’s New Fund Focuses on Ethereum Competitors

March 22, 2022 The Crypto Briefing

Institutions increase exposure to Grayscale Bitcoin Trust as GBTC discount nears 30%

March 6, 2022 Coin Telegraph

bitcoin trading

More capital enters the flagship Grayscale trust as it eyes regulator approval to become an exchange-traded fund later this year.

Institutional investors are returning to accumulate Grayscale Bitcoin Trust (GBTC) shares as the discount to spot price his risen to nearly 30%, data on Glassnode shows.

Since December 2021, some weekly sessions saw investors pouring in between $10 million and $120 million into Grayscale's flagship fund. Meanwhile, the biggest capital inflow — amounting to nearly $140 million — appeared in the week ending on Feb. 25, as shown in the chart below.

*Institutional Grayscale Investments since September 2021. Source: Glassnode*

No selloff yet among high-profile GBTC backers

The GBTC trust attracted investments as global markets faced back-to-back shocks in the past few months, including a dramatic selloff in the technology stocks, followed by Russia's invasion of Ukraine that left many fund managers with a double-digit percentage loss.

For instance, Cathie Wood's ARK Next Generation ETF (ARKW), which holds $478 million worth of GBTC, crashed by nearly 45% year-over-year, primarily owing to its exposure in the sectors that suffered the most during the recent market turbulence, including technology (43.14%) and communication (27.99%).

*ARKW weekly price chart. Source: TradingView*

But in November 2021, ARKW added over 450,000 GBTC shares to its portfolio, when their discounts were as steep as nearly 17.5%.

Similarly, the Morgan Stanley Insight Fund (CPODX) held over 1.5 million GBTC as of Sep. 30, 2021, according to its securities filings with the U.S. Securities and Exchange Commission (SEC). Its year-over-year performance as of March 6, 2022, came to be around minus 43%.

Both ARKW and CPODX underperformed as GBTC fell by 43% in the past 12 months. Nonetheless, neither ARKW nor CPODX reported selling significant shares of GBTC.

*Institutional Grayscale Investments. Source: Swissblock Technologies, Glassnode*

ETF hype?

Many factors attribute to GBTC's underperformance, including rising competition from exchange-traded funds (ETF) in Canada. Unlike GBTC, ETFs allow investors for Share Redemptions, a process through which a fund can destroy shares based on demand-supply dynamics.

Digital Currency Group, Grayscale's parent company, has attempted to reduce the discount by buying back GBTC shares. But its efforts have been mired further by the launch of ProShares Bitcoin Strategy ETF (BITO), which holds futures contracts. This has ended up dislocating GBTC's price further away from Bitcoin's spot price.

*Grayscale Bitcoin Trust's discount/premium to net asset value. Source: YCharts*

Now, Grayscale has been working on a discount killer switch, through its attempts to convert GBTC from a trust fund to an ETF tied to Bitcoin's price. If the SEC approves Grayscale's application, it would prompt the GBTC discount to reset from its current discount levels to zero.

Nonetheless, the SEC has not approved a single spot Bitcoin ETF application citing risks relates to price manipulation. In comparison, regulators in Canada and Europe have been more welcoming to physical Bitcoin-backed investment products.

Investment management firm Investor Trip asserted that the SEC would eventually approve the spot ETF "due to pressure from 3rd party supporters."

"If approved, Grayscale will convert the trust into a Spot ETF and the discount opportunity will no longer exist," it wrote in its analysis published Feb. 14.

Conversely, analysts at Conservative Income Portfolio called GBTC an investment that is "destined for zero," noting that its discount of net-asset-value of Bitcoin "is not really relevant."

"It might be relevant from a shorter term bounce perspective as a measure of sentiment."

$45,000 Bitcoin looks cheap when compared to gold’s marketcap

March 2, 2022 Coin Telegraph

Canada

BTC’s market cap is much smaller than gold, but Bitcoin’s daily volume and the amount held under management by funds suggests that the cryptocurrency is trading at a heavy discount.

Bitcoin (BTC) pulled off an impressive double-digit rally this year, but the digital asset has been struggling to break the $45,000 resistance lately. This level does not hold any historical importance because it has been easily breached multiple times. The same can be said for Bitcoin's $850 billion capitalization, which isn't anywhere close to silver's $1.4 trillion, or the Amazon and Google's $1.7 trillion market value.

Bitcoin's market cap is often compared to gold, which has a $12.3 trillion total value and is currently the leading global store of value solution. Therefore, the answer to the $45,000 resistance might lay in institutional investors' comparison of BTC versus gold. By looking at institutional investor funds assets under management and daily trading volume, it is possible to infer that Bitcoin's 93% market capitalization discount is justified.

The "digital gold" thesis is being proven right

Gold has always been viewed as a proxy for Bitcoin and Cointelegraph previously covered Bitcoin's multiple use cases, but the narrative that it is a digital store of value has always been its flagship feature.

Governments around the globe have implemented tighter financial controls for many reasons, which could reinforce the self-sovereign and decentralized advantages of cryptocurrency. For example, China's social credit system places offenders on a social credit blocklist, which will stop them from securing loans or even using the transportation system.

Most recently, Canada's short-lived Emergencies Act gave financial institutions the discretionary power to freeze protesters' bank accounts with no civil liabilities on Feb. 15. Another example is this week Russians have been sanctioned from payment services like Apple Pay and Google Pay.

These events could make an analysis of the gold to Bitcoin market capitalization even more relevant.

*Most valuable tradable global assets. Source: 8marketcap.com*

According to the above data, BTC's current $837 million market capitalization translates to roughly 7% of gold. To assess how those markets are valued, one should compare their daily traded volume and institutional holdings.

Cryptocurrencies are known for inflated exchange-traded numbers, but some providers, including Nomics, have their own adjusted volume calculations.

*Accumulated 30-day volume on March 2, USD. Source: Nomics*

The above data shows a $404 billion 30-day exchange volume for Bitcoin, which is equivalent to $13.5 billion per day. Exchange-traded products such as the Grayscale Bitcoin Fund (GBTC) added another $0.4 billion daily liquidity, according to CryptoCompare's February 2022 report. Therefore, Bitcoin currently presents an aggregate $13.9 billion average daily volume.

*Average daily trading volumes, USD billion. Source: gold.org*

Meanwhile, according to GoldHub, there is $170 billion in daily liquidity for gold, including registered over-the-counter transactions. This is in addition to regulated futures markets and gold exchange-traded products. Thus, Bitcoin volume currently presents roughly 8% of gold's.

The gold ETF versus Bitcoin exchange-traded products

Bitcoin's multiple exchange-traded products such as Grayscale GBTC and exchange-traded notes have grown considerably. As a result, there are $37.8 billion in assets under management locked in Bitcoin exchange-traded products. That is equivalent to 4.5% of the cryptocurrency market's current $840 million market capitalization.

*Total Bitcoin listed investment vehicles, USD. Source: Funds, Bloomberg, ETF.com*

Gold-backed ETF products total $221.2 billion, according to GoldHub data on Feb. 25. Excluding the aggregate 61% non-financial gold use (jewelry, industrial, others), the remaining market capitalization stands at $6.0 trillion. Therefore, the fund's exchange-traded investment vehicles correspond to 3.7% of the adjusted gold's market value.

At $45,000, Bitcoin's average volume traded and institutional investors' holdings roughly match gold's markets. While the $850 million market cap level might be a short-term concern for investors, the cryptocurrency has other emerging use cases, such as El Salvador's micropayment channels that use Lightning Network technology.

As "digital gold" becomes only a part of Bitcoin's valuation model, traders are likely to price in higher upside, and consequently, the $45,000 level should become a distant memory.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

DCG announces $250M share repurchase for Grayscale products

March 2, 2022 Coin Telegraph

DCG announces 0M share repurchase for Grayscale products

Coin Telegraph

The share repurchase program centers around Grayscale's Litecoin, Zcash and Horizon investment products.

Grayscale parent Digital Currency Group, better known as DCG, announced that it intends to repurchase up to $250 million in shares for various Grayscale investment products.

The share repurchase program is centered around Grayscale’s Litecoin Trust, Horizon Trust, Zcash Trust and other Grayscale products, DCG confirmed on Wednesday. The pace and timing of the share repurchase are not fixed and will depend on several factors, “including the levels of cash available, price, and prevailing market conditions,” the company said.

Digital Currency Group Announces $250 Million Share Repurchase Program for Grayscale® Litecoin Trust (OTCQX: $LTCN), Grayscale® Horizen Trust (OTCQX: $HZEN), Grayscale® Zcash Trust (OTCQX: $ZCSH), and other Grayscale Products https://t.co/zKoEWkfyk1
— Barry Silbert (@BarrySilbert) March 2, 2022

As Cointelegraph reported, DCG first announced plans to purchase shares of its Grayscale products in March 2021, allocating up to $250 million towards the flagship GBTC Bitcoin (BTC) product.

Like its previous share repurchase announcement, DCG's Wednesday statement didn’t specify the reasoning behind its latest buyback.

Grayscale is the world’s largest crypto asset manager with nearly $27 billion in assets under management, according to the latest data. The value of Grayscale’s holdings has declined from a peak of around $43.6 billion in November, reflecting a sharp pullback in the price of Bitcoin and the broader cryptocurrency market.

*The value of Grayscale investment products has declined from their peak in November 2021. Source: YCharts*

Institutional investors have increased their exposure to cryptocurrency products over the past year, though their interest has waned during periods of extreme market volatility. After a prolonged drawdown, crypto investment funds appear to be attracting new capital in recent weeks. Inflows into crypto funds totaled $36 million last week, with Bitcoin products registering five consecutive weekly inflows totaling $239 million, according to CoinShares data.

Grayscale launches campaign to encourage public comments on Bitcoin ETF application

February 22, 2022 Coin Telegraph

Business

“This campaign aims to educate and inspire the investment community to take action and make their voices heard on this historic decision,” said Michael Sonnenshein.

As the U.S. Securities and Exchange Commission is considering whether to approve or deny asset manager Grayscale’s application for a Bitcoin spot exchange-traded fund (ETF), the firm has called on American investors to submit comments to the regulator.

In a Tuesday Twitter thread, Grayscale CEO Michael Sonnenshein announced the launch of an advocacy campaign for U.S.-based investors to speak their minds to the SEC before any final decision is reached on the Bitcoin (BTC) investment vehicle. Since the NYSE Arca filed with the regulatory body on Oct. 19 to list shares of Grayscale’s Bitcoin ETF under the ticker GBTC, the commission has delayed its decision on Dec. 15 and again on Feb. 4.

“This campaign aims to educate and inspire the investment community to take action and make their voices heard on this historic decision,” said Sonnenshein.

Today @Grayscale announced the launch of a new public campaign to encourage American investors to submit comments on our application with the SEC to convert $GBTC to a Spot Bitcoin ETF.
— Sonnenshein (@Sonnenshein) February 22, 2022

According to Grayscale’s chief legal officer Craig Salm, the firm has already received more than 200 letters in support of the SEC allowing the firm to convert its Bitcoin Trust into a physically-backed fund. Salm said some of the common themes from the feedback included calling a crypto ETF “in the public’s best interest,” allowing the United States to stay competitive with innovative investment vehicles, and calling out the SEC’s “nonsensical” approach in approving ETFs linked to Bitcoin futures but not BTC spot ETFs.

The Feb. 4 deferment from the SEC opened the floor to “interested persons to provide comments on the proposed rule change” for Grayscale’s BTC spot ETF. The regulatory body has the ability to extend the deliberation window up to 240 days from when the proposed rule change was published in the Federal Register on Nov. 8, meaning the SEC should reach a decision before July 6, 2022.

To date, the SEC has not approved any investment vehicle with direct exposure to crypto. Grayscale filed an application to restructure its Bitcoin Trust into an ETF in October shortly after the SEC approved ProShares’ Bitcoin Strategy ETF for listing on the New York Stock Exchange and shares of crypto-asset manager Valkyrie’s Bitcoin ETF fund on the Nasdaq Stock Market.

If approved by the SEC, Grayscale would have the first publicly listed Bitcoin spot ETF available in the United States. This year, the regulator has already rejected applications for Fidelity’s Wise Origin Bitcoin Trust and First Trust SkyBridge Bitcoin ETF Trust but is expected to reach a decision on NYDIG’s spot Bitcoin ETF and asset manager Stone Ridge Holdings Group’s BTC ETF in March.

Grayscale Investments Asks Investors to Help Convince SEC to Approve Bitcoin Spot ETF

February 22, 2022 Bitcoin.com