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Crypto Biz: Bitcoin ETFs debut, asset tokenization, Ripple’s buyback and more

The approval of Bitcoin ETFs can open the doors for further derivatives products and enhance BTC’s role in decentralized finance, but its long-term impact may go far beyond financial markets.

Ten years after Cameron and Tyler Winklevoss first applied to launch the Winklevoss Bitcoin Trust in 2013, a spot Bitcoin exchange-traded fund (ETF) has finally launched in the United States. The U.S. Securities and Exchange Commissionapproved nine ETF applicationsfrom several major asset management firms on Jan. 10.

Market analysts anticipate an investment inflow of around $10 billion to the ETFs in 2024. The historic decision cements the status of Bitcoin as a legitimate asset and sets the stage for a range of derivative investment products, including potential leveraged and short Bitcoin ETFs.

Aside from that, the decision can potentially strengthen Bitcoin’s role within the decentralized finance (DeFi) space, particularly as a collateral asset, creating opportunities to further integrate the crypto industry with traditional financial markets.

However, the ripple effects of this development may be felt far beyond financial markets.

The nod from the U.S. regulator represents a landmark moment for BTC’s broader adoption and recognition, symbolizing a shift transcending the cryptocurrency and its underlying blockchain technology. Moments like these can reshape our economic system, alter perceptions of trust and open up a new yet-to-be-imagined world of possibilities.

As expected, crypto enthusiasts had been on a rollercoaster over the past few days. For those who may have missed something amid the Bitcoin ETF frenzy, this week’s Crypto Biz also explores Brevan Howard and Hamilton Lane tokenizing assets, Ripple’s buyback, Core Scientific’s oversubscribed equity offering and Grayscale’s funds rebalance.

Spot Bitcoin ETF trading volume surpasses $1.6B within minutes of launch

Bitcoin spot exchange-traded funds (ETFs) were off to a remarkable start as trading officially began on Jan. 11 with a total volume of around $1.6 billion just minutes after the opening bell. The movement comes on the heels of the United States Securities and Exchange Commission’s approval of the first spot Bitcoin ETFs. As of the opening of trading, Grayscale (GBTC), BlackRock (IBIT), Fidelity (FBTC) and Ark (ARKB) topped the list of BTC ETFs traded.

Brevan Howard, Hamilton Lane to tokenize assets through Libre protocol

Brevan Howard and Hamilton Lane will be the first asset managers to tokenize assets on the upcoming Web3 infrastructure provider Libre protocol — backed by Brevan Howard’s WebN and Nomura’s Laser Digital. Libre is scheduled to go live in the first quarter of 2024, offering asset tokenization and smart contracts through the Polygon network, supporting collateralized lending and automated rebalancing of separately managed accounts. As for Brevan Howard, known for its focus on macroeconomic trading strategies, Libre will allow tokenization of its portfolio of illiquidity assets, whereas Hamilton Lane will use the protocol for fixed-income products.

Ripple Labs to buy back $285 million stake in tender offer: Report

Ripple Labs is planning a tender offer to buy back a $285 million stake in the company from early investors and employees. The company plans to spend $500 million in the process. The budget includes the cost of converting restricted stock units to common shares. According to Reuters, investors will only be able to sell 6% of their holdings. The transaction will place the company’s valuation at $11.3 billion. Additional buybacks are anticipated as Ripple aims to provide an exit for early investors. Ripple’s CEO Brad Garlinghouse said the company has no plans to go public anytime soon in the U.S., where it is based, due to the country’s uncertain regulatory environment.

Grayscale drops MATIC, adds AVAX, XRP in funds rebalance

Asset manager Grayscale has rebalanced weights for three of its crypto funds, removing tokens such as Polygon’s and adding Avalanche and XRP, according to an announcement on Jan. 5. The new allocations are part of Grayscale’s quarterly review and impact its Digital Large Cap Fund (GDLC), DeFi Fund and Smart Contract Platform Ex-Ethereum Fund (GSCPxE Fund). Although MATIC was dropped from GDLC’s new composition, it remains in the GSCPxE Fund basket. As for Grayscale’s DeFi Fund, changes include the removal of the Curve DAO (CRV) token from the portfolio. 

Bitcoin miner Core Scientific completes $55 million equity offering

Bitcoin miner Core Scientific has closed a $55 million equity financing round as it returns to solvency. According to the Jan. 8 announcement, the $55 million equity offering expired the week before and was oversubscribed. CEO Adam Sullivan stated that the funds raised, combined with the full repayment of their debtor-in-possession financing, positions the company to exit Chapter 11 bankruptcy by the end of January. As per the company’s latest financial disclosure from November 2023, Core Scientific had $2.3 billion in assets against $559 million in liabilities, resulting in a net equity of $1.8 billion. The company also intends to reenter the Nasdaq stock exchange following the completion of its bankruptcy proceedings.

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