Weekly News Roundup – 25 Oct 2021
Crypto moves fast and it can be hard to keep up with all the developments. To help you stay on top of what’s going on across the industry, we’ve created this overview of the key news from last week.
- Walmart, the world’s largest company by revenue, is letting customers buy bitcoin at dozens of its U.S. stores.
- Shoppers can purchase the cryptocurrency at Coinstar machines inside the retailer’s cavernous big box stores. A CoinDesk editor verified that the service works, buying a small amount of BTC at a Pennsylvania Walmart on Oct. 12.
- “Coinstar, in partnership with Coinme, has launched a pilot that allows its customers to use cash to purchase bitcoin,” Walmart communications director Molly Blakeman told CoinDesk via email. “There are 200 Coinstar kiosks located inside Walmart stores across the United States that are part of this pilot.”
- Coinstar is best known for allowing consumers to exchange coins for paper bills or gift cards. The ability to buy bitcoin is enabled by Coinme, a crypto wallet and payment firm that specializes in bitcoin ATMs (BTMs).
- After inserting bills into the machine, a paper voucher is issued. The next stage involves setting up a Coinme account and passing a know-your-customer (KYC) check before the voucher can be redeemed. The machine charges a 4% fee for the bitcoin option, plus another 7% cash exchange fee, according to the Coinstar website and verified by CoinDesk.
- CoinDesk tested the service out of an abundance of caution following a hoax last month, when a fake press release claimed that litecoin (LTC) would be accepted as payment at Walmart stores. This time, the bitcoin-Bentonville connection is real. A source with knowledge of the pilot said the Litecoin debacle had put Walmart, which is based in Bentonville, Ark., off from issuing a press release.
Circle launches USDC stablecoin on Hedera network
- Circle, the issuer of the USDC stablecoin, has expanded the coin's support to the Hedera Hashgraph blockchain network.
- This makes USDC the first stablecoin available on Hedera. Launched in 2018, Hedera is a proof-of-stake blockchain network owned and governed by different organizations, including Google and IBM. These organizations run "permissioned" nodes on the network. Over time, Hedera aims to move to a permissionless model.
- With USDC's availability on Hedera, the network hopes to bring decentralized finance (DeFi) applications to its platform. Last month, the Hedera Governing Council earmarked 10.7 billion HBAR tokens (worth nearly $4 billion at current prices) toward the development of the Hedera ecosystem, including for DeFi applications.
- Stablecoins play an essential role in the DeFi market. Traders use these coins to trade with and lend them out to earn high yields on DeFi protocols.
- With the addition of Hedera, Circle now supports USDC on a total of six blockchains, including Ethereum, Algorand, Solana, Stellar, and TRON.
- USDC is the second-largest stablecoin in the market, after Tether (USDT). It has a total supply of nearly $33 billion compared to USDT's over $72 billion supply.
ProShares Bitcoin ETF tops $1 Billion assets in just 2 days
- Pent-up demand for the first U.S. Bitcoin exchange-traded fund has driven assets held in the investment vehicle to more than $1 billion in just two days.
- The ProShares Bitcoin Strategy ETF (ticker BITO) ended Wednesday with $1.1 billion under management after trading volume topped $1.2 billion, according to a press release. That’s the quickest that an ETF has reached the $1 billion mark, Bloomberg Intelligence data show.
- BITO’s launch Tuesday was met with almost off-the-charts demand, ranking as the second heaviest-traded ETF debut on record. Data overnight showed inflows of $567 million in its first trading session. The product’s settlement arrangements mean official flows arrive with a one-day lag.
- The enthusiasm surrounding the fund has helped propel the world’s largest cryptocurrency to an all-time high, with Bitcoin at one point nearing $67,000 on Wednesday. Other issuers are lining up to introduce their own products, with Bitcoin futures ETFs from VanEck and Valkyrie potentially coming to market this month.
- BITO has climbed about 8.2% to $43.28 from its inception price of $40, according to data compiled by Bloomberg. It was little changed in pre-market trading at 5:20 a.m. in New York.
Valkyrie's bitcoin futures ETF posts trade volume worth nearly $80 million on opening day
- Valkyrie's bitcoin futures exchange-traded fund (ETF) listed on NASDAQ Friday, scoring an $80 million debut by the end of the day's session. Valkyrie's Bitcoin Strategy ETF ($BTF) opened at $25 and closed the day at $24.16, according to data from Bloomberg. In sum, the day's volume came in at about $78 million after roughly 3.1 million shares traded hands.
- Bloomberg ETF analyst Anthony Rayar tweeted that volume and value traded for $BTF and $BITO show "strong and consistent demand." Bloomberg Senior ETF analyst Eric Balchunas tweeted the $BTF listing remained a significant debut of this year despite being significantly overshadowed by ProShares' $BITO.
- By comparison, ProShares listed the first bitcoin-futures ETF earlier this week on the New York Stock Exchange, and the product surpassed already-high expectations with an inaugural day volume nearing $1 billion.
- ProShares won the race to list the U.S.'s first crypto ETF after SEC Commissioner Gary Gensler expressed an interest in reviewing crypto proposals for products tied to CME bitcoin futures. Valkyrie was second across the line, but other proposals are waiting in the wings, including VanEck, which is expected to list some time next week.
- Action in new futures-based ETFs has spilled over into the underpinning market. CME Group's bitcoin futures market has seen open-interest surge above $5 billion, triggering concerns that funds could bump up against CME's position limits. If funds hit position limits, then their ability to track the underlying is diminished because they are forced to buy longer-dated contracts that trade higher.
- "What we've seen in the last two days is a ton of Oct to Nov futures rolling activity happening in the market," noted Joshua Lim, head of derivatives at Genesis. "On Tues the roll closed at +$595, but it hit a high of +$1,240 on Wed as the ETF likely rolled out exposure to Nov where the position limit is higher. Over 5,000 contracts of the roll have traded in the last three days."
Global cryptocurrency market cap hits $2.6 trillion, returning to all-time high
- Over the weekend, the market cap of the entire crypto market broke $2.6 trillion, according to data from CoinGecko. This puts it back at levels last seen in May when bitcoin first topped the $60,000 mark.
- The surge has largely been driven by bitcoin and ether, which comprise 61.5% of the market. Since the start of the year, Bitcoin's price has doubled, rising from $29,000 to $61,000 today. This added an extra $616 billion to the crypto market.
- Ether's price rise was even more explosive, increasing by 411% from $738 to $3,775 today. But since it has a smaller market cap, it only added an extra $365 billion to the market.
- Since ether's price rose faster than bitcoin, however, it did eat into its market share. Ether's share of the market has grown from 7.4% to 17.5% over the course of the year. In contrast, bitcoin's dominance has declined from 65.9% to 44.9%.
- The rest of the total market cap is spread across the remaining 9819 coins that CoinGecko tracks. There are 19 more coins with market caps above $10 billion, including binance coin, cardano and XRP, which make up a significant portion of the remaining market.
Investing giant Pimco is considering trading cryptocurrencies
- Pimco, a $2 trillion investment firm, could potentially begin trading spot cryptocurrencies, the firm's chief investment officer Daniel Ivascyn confirmed to CNBC.
- The firm, which has engaged with the market via crypto-linked securities, is now looking at "trading certain cryptocurrencies as part of our trend-following strategies or quant-oriented strategies, then doing more work on the fundamental side," Ivascyn said.
- Already, the firm is trading securities that are tied to the crypto market, taking advantage of price discrepancies that exist between different products. It has not taken a directional view on the space through these securities, to be sure.
- Ivascyn also said that the firm is paying attention to decentralized finance, describing it as "disruptive."
- As such, Pimco is "thinking about scenarios where this could take us to ensure that we are competitively prepared to deal with what’s a rapidly changing environment that offers a pretty significant value proposition, particularly for younger generations, or the new generation of the investment community."
- With more than $2 trillion under management, Pimco is one of the largest players in the investment world—actively investing across the fixed-income, alternatives, and equity markets.