The crypto landscape witnessed a power shift as BlackRock’s Bitcoin ETF surpassed Grayscale’s, amassing a colossal $19.68 billion in holdings. 

Concurrently, anticipation mounted for a potential Ether ETF launch and the imminent $6.5 billion Bitcoin options expiry, which could significantly impact market dynamics. 

Additionally, concerns arose over Mt. Gox’s massive Bitcoin transfer ahead of repaying creditors, while Binance France underwent structural changes amid regulatory scrutiny, highlighting the industry’s ongoing challenges.

BlackRock’s Bitcoin ETF Surpasses Grayscale

In a significant development, BlackRock’s spot Bitcoin exchange-traded fund (ETF) has reportedly surpassed the Grayscale Bitcoin Trust (GBTC). It now holds the title of the world’s largest ETF tracking Bitcoin’s price.

At the close of trading on May 28, a notable shift occurred. BlackRock’s iShares Bitcoin Trust (IBIT) recorded a substantial $102.5 million inflow, while GBTC experienced a $105 million outflow. “There is a new king in the land of Bitcoin ETFs & its BlackRock,” HODL15Capital declared.

This inflow propelled BlackRock’s spot Bitcoin ETF to a total holding of 288,670 Bitcoin (BTC). In contrast, Grayscale now holds 287,450 BTC, a significant decrease from its initial 620,000 BTC at the time of conversion in January, according to data from HODL15Capital and the Apollo Bitcoin Tracker.

Spotlight on Bitcoin ETF Landscape

A May 29 report from Bloomberg, citing its compiled data, stated that IBIT held $19.68 billion worth of Bitcoin as of Tuesday. Grayscale held $19.65 billion, while Fidelity’s ETF offering trailed at $11.1 billion.

Both IBIT and GBTC launched simultaneously in January, yet BlackRock’s ETF has since accounted for the lion’s share of inflows across all eleven spot Bitcoin ETFs. Bitcoin’s price saw a 1.1% increase on the day, currently standing at $68,550, as per CoinMarketCap data.

Moreover, recent regulatory filings reveal that BlackRock’s income and bond-focused funds bought shares of its spot Bitcoin ETF in the first quarter. BlackRock’s Strategic Income Opportunities Fund (BSIIX) acquired $3.56 million worth of the iShares Bitcoin Trust (IBIT). Its Strategic Global Bond Fund (MAWIX) made a $485,000 purchase, according to May 28 Securities and Exchange Commission filings.

Ether ETF Anticipation

Globally, spot Bitcoin ETFs now hold over one million BTC worth over $68 billion, equating to nearly 5.10% of Bitcoin’s circulating supply. Meanwhile, anticipation builds for the potential launch of spot Ether (ETH) ETFs, which analysts predict could occur as early as mid-June.

These ETFs are currently undergoing the S-1 approval process, the final hurdle required before they can commence trading on their respective stock exchanges. As the crypto landscape evolves, the competition among ETF offerings intensifies, with all eyes on the next major development.

Bitcoin’s $6.5 billion options expiry on May 31

As the May 31 deadline for Bitcoin’s $6.5 billion options expiry approaches, investors remain bullish despite multiple failed attempts to sustain prices above $71,000. Derivatives betting on $80,000 and $90,000 continue to proliferate, driven by expectations of high-volatility events and increased corporate adoption of Bitcoin.

Overly Optimistic Bets

However, given the inability of bulls to break the $70,000 resistance over the past week, it’s likely that these excessively optimistic call (buy) options will become worthless. Notably, 91% of these instruments were placed at $72,000 or higher, indicating bulls were counting on a sustained rally ahead of May 31.

The Nasdaq Composite index breaking its all-time high above 17,000 points on May 28 suggests investors are more confident in the U.S. Federal Reserve’s soft landing plan. This scenario creates a positive outlook for risk-on assets like Bitcoin, as reduced interest rates are anticipated.

Expiry Dynamics and Implications

Aggregate data predicts a $270 million profit for bulls if Bitcoin trades above $70,000 on May 31. However, if BTC remains near $67,800, the open interest for call and put options will be fairly balanced, with bulls and bears having incentives to influence the price.

With less than three days remaining until the monthly expiry and a lack of short-term catalysts, it would be surprising if bulls manage to push Bitcoin’s price above $70,000. Therefore, the odds favor a neutral outcome near $68,000.

The overly optimistic bets reflect the 25% gains as BTC soared from $56,883 to $71,417 in the first 20 days of May. However, this rally did not prove sustainable, especially after the approval of the spot Ethereum ETF in the U.S., creating competition for institutional investors’ funds.

Bitcoin Dips 2% as Mt. Gox Wallets Move over $7B to Unknown Wallet

Bitcoin (BTC) dipped 2% on May 28 after wallets labeled as belonging to the collapsed crypto exchange Mt. Gox moved 107,547 BTC worth nearly $7.3 billion to an unknown wallet — with more transactions coming in by the hour.

Massive Mt. Gox Bitcoin Transfer

The move is ahead of the defunct crypto exchange’s plan to return BTC holdings to creditors before October. Blockchain tracking account Whale Alert posted the moves in May 28 posts, noting six on-chain transactions of between 3,999 BTC and 32,499 BTC within hours.

Blockchain explorer Arkham Intelligence shows the transaction hashes from 1:41 am to 4:46 am UTC include transfers from multiple Mt. Gox cold wallets, with most moving 2,000 BTC at a time. All transactions pointed to a single unlabeled address that holds 107,547 BTC worth nearly $7.29 billion at the time of writing.

Price Impact and Creditor Repayment

Bitcoin dropped around 2% in the wake of the moving Mt. Gox BTC, now trading at $67,875 compared to $69,374 at the time of the first transfer, according to CoinMarketCap. Bitcoin is down around 1.4% on the day.

Last month, K33 Research analysts warned the move of Mt. Gox-era Bitcoin would “spook the market” and price-pressure the cryptocurrency. Over $9.4 billion worth of Bitcoin is owed to some of Mt. Gox’s 127,000 creditors who have waited to get it back for over ten years after the exchange collapsed in 2014 after multiple unnoticed hacks.

Deadline and Trustee’s Actions

Mt. Gox’s final repayment deadline is Oct. 31. Its trustee firm Nagashima Ohno and Tsunematsu did not immediately respond to an inquiry on where and why the Bitcoin was moved. The trustee started contacting creditors in January to confirm their identity and exchange accounts for repayment.

The massive transfer of Mt. Gox’s Bitcoin holdings has raised concerns about potential market impact, as analysts warn of price pressure and market volatility. Meanwhile, creditors eagerly await the long-overdue repayment process, which is expected to be completed by the end of October.

Binance France Gets New Owners After Regulatory Issues

Binance France has introduced new shareholders who own 100% of the company equally between them. This move was necessary after France’s Financial Markets Authority (AMF) sent the company a warning in December.

According to a blog post, the AMF informed Binance France that it had to take action due to issues that arose between the original beneficial owner and U.S. authorities like the Justice Department, Commodity Futures Trading Commission (CFTC), and the Treasury’s Financial Crimes Enforcement Network. This meant former Binance CEO Changpeng Zhao could no longer own the company.

Zhao’s Departure and New Owners

The post indicated that Zhao had already withdrawn from the company. He pleaded guilty to U.S. charges in November and was sentenced to four months in prison, though he has yet to begin his term.

Binance France did not disclose the new beneficiaries’ names but stated they were both members of Binance’s founding team. Reports suggest they are Lihua He and Yulong Yan, with little public information available about them.

Regulatory Challenges and Expansion Hurdles

Under the Markets in Crypto-Assets (MiCA) regulations, a company licensed in one European Union country can operate across all 27 member states. Binance reportedly received AMF approval in May 2022 after operating illegally in France since 2020. However, it was also under investigation for Anti-Money Laundering violations before Zhao faced charges in the U.S.

Binance France faced challenges finding a banking partner in France after the CFTC sued the company in March 2023. Its executive director Stéphanie Cabossioras joined a wave of executives who departed in October 2023.

Furthermore, Binance was denied a virtual asset service provider license in the Netherlands in June and had its Belgian operations closed by regulators the same month.

Closing remark

As the crypto industry navigates an evolving regulatory landscape, major players like BlackRock and Binance France are adapting to maintain compliance and mitigate risks. 

The impending Ether ETF launch and Bitcoin options expiry could reshape market dynamics, while the Mt. Gox repayment process promises to be a pivotal event, potentially influencing price volatility. 

Amidst these developments, the industry’s resilience and ability to address regulatory concerns while fostering innovation will be put to the test, shaping the trajectory of this burgeoning financial ecosystem.

What are your thoughts on this week’s crypto news? Did any particular development stand out to you? Leave a comment below and let us know your perspective!

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