Bitcoin
VanEck Supports but BlackRock Thinks Otherwise
VanEck Head of Digital Assets Research Mathew Sigel says Solana ETFs (exchange-traded funds) could hit markets sooner than expected. The firm’s position differs from that of BlackRock, which thinks it may be premature to have the financial instrument now.
Solana (SOL) remains a formidable contender in the crypto market. It first challenged Ethereum on scalability and network fee metrics before ascending to the ETFs debate.
Solana ETFs a Growing Possibility, VanEck‘s Sigel
Sigel advocates for Solana ETFs, using the European market as an example, as it already has multiple ETPs (exchange-traded products) running. Among them are single coin and basket options, with the VanEck researcher saying, “We aim to lead this innovation in the US as well.”
Appearing on The Wolf of All Streets Podcast, Sigel acknowledged current regulatory constraints, the face of which is the current chair of the US Securities and Exchange Commission (SEC), Gary Gensler. He said the environment could change for the better soon, amid prospects of new regulatory changes, potentially opening doors for more diversity in the crypto ETFs market.
As BeInCrypto reported, Sigel recently explained the steps to getting an SOL-based ETF approved, likening Solana to Ether. His stance that an Ethereum ETF paves the way for a SOL counterpart remains unchanged.
Sigel also echoed VanEck’s commitment to crypto and ETFs, highlighting the firm’s CEO Jan Van Eck’s statement during the Bitcoin 2024 Conference. He said that 30% of his [the CEO’s] personal assets are in Bitcoin
Read more: Solana ETF Explained: What It Is and How It Works
As Sigel anticipates a better regulatory climate, Donald Trump’s expressions during the Bitcoin 2024 Conference in Nashville are worth remembering. He pledged to replace Gensler if elected president, effectively appealing to crypto voters. Regulatory changes would be a given with a new chair at the SEC.
ETF Store president Nate Geraci believes otherwise, joining Sigel hoping for better regulations. Others, like crypto analyst Miles Deutscher, maintain a lukewarm stance. In his opinion, it would be premature to rule out a Solana ETF, considering “how quickly crypto grows and how much traction things get in a short amount of time.”
BlackRock Maintains Skeptims Over SOL ETF
Despite this optimism, BlackRock believes otherwise. The asset manager’s digital asset head, Robert Mitchnick, cited market cap and maturity differences between leading cryptos and smaller assets. Based on these metrics, he said BlackRock has no immediate plans for a Solana ETF.
“I don’t think we’re going to see a long list of crypto ETFs. If you think of Bitcoin, today it represents about 55% of the market cap. Ethereum is at 18%. The next plausible investible asset is at, like, 3%. It’s just not close to being at that threshold or track record of maturity, liquidity, etc.,” Mitchnick said.
BeInCrypto also reported on BlackRock’s lean toward Bitcoin and Ethereum ETFs rather than the Solana counterpart. While BlackRock currently allocates to crypto, crypto futures, and crypto ETFs, Cohen shot down the prospects of a Solana ETF, citing investability concerns.
“Not in the near term. We look at the investability to see what meets the criteria and bar to be delivered in an ETF. For us right now, between both an investability consideration and what we hear from our clients, Bitcoin and Ethereum meet that bar. I think it will be a while before we see anything else [Solana ETF],” Cohen said in an interview with Bloomberg.
Meanwhile, SEC Commissioner Hester Pierce believes the regulator needs more convincing before green-lighting a Solana ETF. In an interview, she said there are questions about what SEC commissioners think is security and not.
Read more: Solana (SOL) Price Prediction 2024/2025/2030
Even as talks of Solana ETFs continue, large holders position themselves for rewards. So far, only VanEck and 21Shareshave filed to list the financial instrument. The Chicago Board Options Exchange (CBOE) also bolstered the odds, filing form 19b-4s for Solana ETFs and inviting public commentary.
Despite the hype, BeInCrypto data shows Solana is down 8% to trade for $168.40 as crypto markets flash red.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Bitcoin
Marathon Digital Raises $1B to Expand Bitcoin Holdings
Marathon Digital Holdings, one of the largest Bitcoin miners, has completed a record $1 billion offering of 0% convertible senior notes due 2030. The net proceeds from the sale were approximately $980 million.
According to the firm’s statement, the net proceeds will be primarily used to buy Bitcoin.
Marathon Digital Holds over $2.5 Billion Worth of Bitcoin
After its last purchase in September, Marathon Digital’s Bitcoin holdings stand at 25,945 BTC. This is currently worth approximately $2.52 billion, as Bitcoin reached an all-time high of $98,000 earlier today.
However, the company’s decision to expand its holdings potentially points to a larger bullish cycle for the token in the long term. According to its press release, Marathon Digital plans to use $199 million of the net proceeds to repurchase existing convertible notes due 2026.
The remainder will be used to acquire additional Bitcoin and for general corporate purposes. Marathon Digital is currently the second largest Bitcoin holder among publicly traded companies.
The notes offer flexibility, with options for conversion into cash, shares of Marathon’s common stock, or a combination of both. Redemption terms include the ability for the company to redeem the notes at full principal value plus accrued interest.
“$1 Billion. 0% interest. MARA has completed the largest convertible notes offering ever amongst BTC miners. The mission, as always: Provide value. Acquire #bitcoin,” the company wrote on X (formerly Twitter).
Increasing Bitcoin Acquisition Among Public Firms
Marathon Digital is following an ongoing trend of public companies increasing their Bitcoin holdings in this bull market. Earlier this week, MicroStrategy announced plans to issue $1.75 billion in convertible notes maturing in 2029. The proceeds will be used to fund additional Bitcoin purchases.
On the same day, the company secured $4.6 billion worth of Bitcoin, building on a $2 billion acquisition from the prior week.
Bitcoin’s all-time high and these aggressive purchases propelled MicroStrategy’s stock price by nearly 120% in a single month. The largest Bitcoin holder also entered the list of top 100 public companies in the US.
Meanwhile, Marathon Digital has faced challenges despite its growing Bitcoin reserves. The company reported a $125 million net loss in Q3. This was driven by a $92 million year-over-year increase in operating costs.
However, its operational capacity has strengthened. Earlier this month, its energized hash rate surged by 93%, signaling increased mining efficiency. Marathon Digital also signed an $80 million agreement with the Keynan government to expand its Bitcoin mining capabilities.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Bitcoin
cbBTC Surges Past $1 Billion as Coinbase Ends WBTC Support
Coinbase, the largest US-based crypto exchange, has announced it will suspend trading for Wrapped Bitcoin (WBTC) on December 19, 2024, at approximately 12 p.m. ET.
The decision, revealed in a post on X (formerly Twitter), cites a routine review of its listed assets to ensure compliance with listing standards.
Coinbase Sidesteps WBTC Amid cbBTC Boom
The suspension will apply to both Coinbase Exchange and Coinbase Prime. Although trading will cease, WBTC holders will retain full access to their funds and the ability to withdraw them at any time. In preparation for the transition, Coinbase has moved WBTC trading to a limit-only mode, where users can place and cancel limit orders while matches may still occur.
“Coinbase will suspend trading for WBTC (WBTC) on December 19, 2024, at or around 12 pm ET. Your WBTC funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time. We have moved our WBTC order books to limit-only mode. Limit orders can be placed and canceled, and matches may occur,” Coinbase detailed.
Coinbase’s move to suspend WBTC comes amid the rapid success of its wrapped Bitcoin token, cbBTC. Recently, cbBTC surpassed a $1 billion market capitalization, reflecting growing adoption and trust within the crypto community. This milestone has further cemented cbBTC’s position as a strong competitor to WBTC in the decentralized finance (DeFi) space.
As of this writing, data on Dune shows that cbBTC market capitalization has increased to $1.44 billion. CBTC’s native availability on networks like Solana, Ethereum, and Base has significantly expanded its accessibility, with Arbitrum being the latest addition.
“cbBTC is live on Arbitrum. cbBTC is an ERC-20 token that is backed 1:1 by Bitcoin (BTC) held by Coinbase. It is natively available on Arbitrum and securely accessible to more users across the Ethereum ecosystem,” Coinbase shared on Tuesday.
Additionally, prominent DeFi protocol Aave is targeting cbBTC for its Version 3 (V3) platform, enhancing its utility within the ecosystem. This growing momentum may have played a key role in Coinbase’s decision to phase out WBTC trading.
WBTC Core Team Urge Coinbase to Reconsider
The team behind Wrapped Bitcoin expressed regret and surprise at Coinbase’s decision. In a statement on X, WBTC’s core team emphasized its commitment to compliance, transparency, and decentralization.
“We regret and are surprised by Coinbase’s decision to delist WBTC…We urge Coinbase to reconsider this decision and continue supporting WBTC trading,” the team said.
The statement outlined WBTC’s longstanding reputation for novel mechanisms, regulatory compliance, and decentralized governance. Highlighting its seamless integration with DeFi protocols, WBTC described itself as an essential liquidity solution for Bitcoin users. Urging Coinbase to reconsider, WBTC reaffirmed its readiness to address any concerns or provide additional information to support its case.
Meanwhile, Coinbase’s announcement has sparked mixed reactions across the crypto community. Some users criticized the exchange, suggesting the decision reflects an inability to handle competition.
“Coinbase can’t handle fair competition?? WBTC superior to cbBTC” said Gally Sama in a post.
Nevertheless, others support the move, citing concerns over WBTC’s custody model, with one user referencing BitGo’s recent adoption of a multi-jurisdictional custody system.
“You put custody in the hands of a fraud. What did you think was gonna happen?” the user expressed.
This critique aligns with growing fears about Justin Sun’s involvement in WBTC’s custody processes, as BeInCrypto reported recently. Some users have acted preemptively to avoid potential risks, with one commenter sharing their reservations.
“When Sun got on the multisig for WBTC, I sent all my WBTC on OP to Coinbase and exchanged for true BTC that I withdrew to my hardware wallet… You gave me confirmation just now that I made the right move,” they wrote.
The decision to suspend WBTC trading could mark a pivotal moment in the competition between wrapped Bitcoin solutions. While cbBTC’s integration across multiple blockchain networks has gained momentum, skepticism surrounding WBTC’s custody model and leadership has intensified.
Justin Sun has voiced criticism of Coinbase’s cbBTC strategy, labeling it a setback for Bitcoin’s broader adoption. As the debate continues, the industry watches closely to see whether Coinbase’s cbBTC will solidify its dominance or if WBTC can regain its position as a leading wrapped Bitcoin solution. Regardless, the shifting dynamics reflect the importance of transparency, governance, and community trust in shaping the future of DeFi.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Bitcoin
Bitcoin Faces ‘Bank Run’ Risk, Cyber Capital’s Bons Warns
Bitcoin (BTC) may be at risk of a catastrophic “bank run,” according to Justin Bons, founder and CIO of Cyber Capital.
A bank run is when customers withdraw their deposits from a financial institution over fears of insolvency.
Bitcoin Cannot Handle Mass Exits, Bons Says
In a detailed social media thread, Bons highlighted critical flaws in Bitcoin’s transaction capacity, self-custody model, and network security. In his opinion, these could lead to a crisis that would destabilize the network and devastate investors.
Bons’ analysis centers on Bitcoin’s limited transaction processing capability, which he calculated at approximately seven transactions per second (TPS). Using data from Glassnode and Bitcoin’s code, he argued that Bitcoin’s 33 million on-chain users would face a bottleneck if a mass panic triggered simultaneous exits.
“At this rate, the queue would be 1.82 months long under optimal conditions. However, in reality, transactions would get stuck and eventually be dropped, making it impossible for smaller parties to exit unless they pay exorbitant fees,” Bons explained.
Bons warned that this limitation could lead to a “death spiral,” where a price crash forces miners to shut down, slowing the network further. The resulting delays could deepen the panic, creating a vicious cycle of declining hash rates, prolonged block times, and falling prices.
Further in his critique of BTC, Bons claimed Bitcoin’s transaction capacity is insufficient for real-world use. He compared Bitcoin’s 7 TPS to other systems, such as Visa’s 5,000 TPS, or even competitors in the crypto space that exceed 10,000 TPS without sacrificing decentralization.
“There are literally ZERO use cases that can be supported by 7 TPS. Mass self-custody over BTC is a dangerous narrative. The only scalable path forward for BTC adoption is through centralized custodians and banks, contradicting its ethos as ‘freedom money’,” he stated.
Bons also questioned Bitcoin’s long-term sustainability, citing its shrinking security budget. This, in his opinion, is a critical issue that could exacerbate the risks he outlined. The thread also touches on Bitcoin’s deviation from its original vision as “peer-to-peer (P2P) electronic cash.” He lamented that the network’s constraints and governance have turned it into a speculative asset rather than a practical medium of exchange.
Bons’ remarks ignited a heated debate on X (formerly Twitter). Patrick Flanagan, a self-described tech expert, dismissed the claims.
“This is pure fantasy. If this was going to occur, it would have occurred years ago,” Flanagan argued.
Bons rebutted, asserting that the risk increases as the number of users grows. He noted that even a fraction of users leaving could trigger a run and added that the larger the network gets, the more severe the problem becomes.
Other users highlighted potential alternatives, such as trading wrapped Bitcoin (WBTC) on Ethereum, which bypasses Bitcoin’s base layer limitations. Bons acknowledged this but noted that wrapped BTC users could exit quickly while on-chain users would be trapped, exacerbating the sell-off. The discussion also extended to Bitcoin’s self-custody model.
“This is something that self-custody advocates should pay attention to. One tiny bit of FUD and everyone gets their money stuck,” DashPay’s Joel Venezuela remarked.
Bons responded, acknowledging the difficult position he finds himself in as a cypherpunk and self-custody advocate. Another user raised a comparison to gold, questioning how long it would take to liquidate global gold holdings. Bons countered that while gold also has practical limits, its theoretical transaction capacity far exceeds Bitcoin’s, making it less susceptible to such bottlenecks.
Critics of Bons’ analysis argue that Bitcoin has weathered similar concerns in the past without collapsing. However, his warning adds to a growing chorus of voices calling for a reevaluation of Bitcoin’s scalability and usability.
Despite his grim outlook for Bitcoin, Bons remains optimistic about the broader cryptocurrency space. “There is much hope left for cryptocurrency as a whole,” he concluded, suggesting that Bitcoin’s original ethos now thrives in other blockchain projects.
Meanwhile, while Bitcoin remains the dominant cryptocurrency, debates over its scalability and resilience continue. Bons’ warning serves as a stark reminder of the challenges Bitcoin faces as it seeks broader adoption in a changing financial space. Elsewhere, Galaxy CEO Mike Novogratz has almost similar reservations about a Bitcoin reserve in the US.
“I think that it would be very smart for the United States to take the Bitcoin they have and maybe add some to it… I don’t necessarily think that the dollar needs anything to back it up,” Novogratz claimed.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
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