Top Stories This Week: Ether Staking, Bitcoin ETFs, Binance Founder Sentencing, Bitcoin Hashrate, and Gold ETF Outflows

Ether Staking Reaches $85 Billion, U.S. Banks Advocate for SEC to Update Cryptocurrency Definition, and Sentencing for Changpeng Zhao is Postponed.

Ether staking surpasses $85 billion, US banks vie for a piece of the Bitcoin custody market, and other highlights from Hodler’s Digest, Feb. 11-17.

Ether Staking Deposits Reach $85B, Locking Up 25% of Circulating Supply

The Ethereum network continues its bullish run, with the total amount of staked Ether (ETH) in the Beacon Chain reaching a whopping 30,206,801 ETH. This represents nearly 25% of the total circulating supply. With 943,974 active validators on the Beacon Chain, it’s clear that investors are eager to participate in Ethereum 2.0. In just two weeks, investors deposited 600,000 ETH into Ethereum 2.0 staking contracts. This surge in staking activity is a bullish sign for the Ethereum network, coinciding with the ETH price reaching yearly highs above $2,800. The increasing volume and locked-up supply bode well for Ethereum’s future. In fact, at least two asset managers are seeking approval for an Ether exchange-traded fund (ETF) that includes staked Ether.

Big Banks Seek a Slice of Sweet Bitcoin ETF Action

Major banks and financial institutions are aggressively petitioning the United States Securities and Exchange Commission (SEC) to revise its definition of crypto assets. Their objective? To secure approval as custodians for the recently approved spot Bitcoin exchange-traded funds. A coalition of these institutions submitted a letter to the SEC, requesting amendments to the Staff Accounting Bulletin 121 issued in March 2022. They argue that since the bulletin’s issuance, several developments, including the approval of spot Bitcoin ETFs, have occurred. The current guidance requires banks to hold crypto assets on their balance sheets, making it costly and impeding their ability to provide crypto custody services at scale. By revising these rules, banks hope to tap into the lucrative world of Bitcoin ETFs.

Binance Founder CZ’s Sentencing Date Delayed

The eagerly awaited sentencing of Binance founder and former CEO Changpeng “CZ” Zhao has been postponed to late April. Originally scheduled for February 23, CZ’s sentencing date was pushed back to April 30 by a Seattle Federal Court. CZ pled guilty to money laundering charges and is expected to face up to 18 months in prison. However, his legal team plans to argue for alternative sentencing options, such as home detention and probation. CZ’s sentencing has attracted significant attention, as it will likely have profound implications for the future regulation of the cryptocurrency industry. Until his sentencing, CZ remains free on a $175 million bond, residing in the U.S.

Image Caption: Binance Founder CZ’s Sentencing Date Postponed to Late April

• Revolut Launches Cryptocurrency Exchange for Advanced Traders
• 🌟 Ethena Labs Opens Public Access to its Ether-Based Synthetic Dollar USDe, Raises $14 Million from PayPal Ventures and Franklin Templeton 🚀
• 🚀 Revolut to List Solana’s Biggest Meme Coin BONK and Launch Learn Campaign 💡

20% of Bitcoin Hash Rate Could Go Offline After Halving

According to mining analysts at Galaxy Digital, approximately 20% of Bitcoin’s hash rate could go offline due to reduced block rewards after the upcoming halving. This reduced block reward structure will favor only the most efficient mining rigs. Currently, eight ASIC miner models account for over 70% of Bitcoin’s hash rate. However, less efficient models like Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 could be phased out, while more efficient models like MicroBT’s M20S and Bitmain’s S17 are expected to survive. These projections regarding the hash rate shift, combined with power price predictions and a Bitcoin price assumption of $45,000, demonstrate the evolving landscape of Bitcoin mining and the need for continuous optimization.

Gold ETFs Experience Outflows as Bitcoin ETFs Gain Traction

Gold-tracking exchange-traded funds (ETFs) have seen significant outflows, totaling $2.4 billion across 14 leading ETFs. In contrast, spot Bitcoin ETFs have witnessed substantial growth, attracting aggregate inflows of $3.89 billion since their inception in January. BlackRock’s iShares Gold Trust Micro and iShares Gold Trust experienced the most significant withdrawals, losing $230.4 million and $423.6 million, respectively. On the other hand, BlackRock has seen remarkable growth in its Bitcoin holdings through the iShares Bitcoin Trust, multiplying it by over 3,700% within a month. This divergence in investor sentiment highlights the growing attraction of Bitcoin as a digital store of value over traditional gold investments.

Image Caption: Bitcoin ETFs Gain Traction as Gold ETFs Experience Outflows

Winners and Losers

At the end of the week, Bitcoin (BTC) is valued at $51,813, Ether (ETH) at $2,779, and XRP at $0.56. The total market cap stands at $1.94 trillion, according to CoinMarketCap. Among the top 100 cryptocurrencies, the biggest gainers this week are Bitget Token (BGB) at 54.92%, VeChain (VET) at 54.85%, and Siacoin (SC) at 46.66%. On the other hand, the top three losers are Celestia (TIA) at -8.82%, Astar (ASTR) at -7.05%, and Osmosis (OSMO) at -5.51%. To stay updated on crypto prices and market analysis, make sure to read Blocking.net’s market analysis.

Image Caption: Winners and Losers of the Week

Q&A Content:

Q: Why are investors staking Ether on the Ethereum network?

A: Staking Ether on the Ethereum network allows investors to participate in Ethereum 2.0, which aims to enhance the scalability, security, and sustainability of the blockchain. By staking their Ether, investors contribute to the network’s consensus mechanism and earn rewards in return. Additionally, staking helps to secure the Ethereum network by making it more resistant to 51% attacks.

Q: What are the potential benefits of Bitcoin ETFs?

A: Bitcoin ETFs offer investors exposure to Bitcoin’s price movements without having to directly own and manage the cryptocurrency. They provide a regulated and accessible investment vehicle that can be traded on traditional stock exchanges. Bitcoin ETFs also allow for the inclusion of retirement accounts and institutional investors who may have restrictions on directly investing in cryptocurrencies.

Q: How will the Bitcoin halving impact the hash rate?

A: The Bitcoin halving refers to a reduction in the block reward given to miners for verifying transactions and adding them to the blockchain. This reduction in block rewards often leads to decreased profitability for certain mining rigs, especially older and less efficient models. As a result, miners using these rigs may choose to go offline, leading to a potential decrease in the overall hash rate. However, more efficient mining rigs may continue to operate profitably, ensuring the overall stability and security of the Bitcoin network.

Q: Why are investors moving funds from gold ETFs to Bitcoin ETFs?

A: The move from gold ETFs to Bitcoin ETFs can be attributed to several factors. Investors may view Bitcoin as a digital store of value that offers advantages such as portability, divisibility, and programmability. Bitcoin’s limited supply and potential for price appreciation also make it an attractive investment option. Additionally, the growing interest in Bitcoin ETFs and the potential for higher returns may be diverting funds from gold ETFs, leading to outflows in the gold market.

References:

1. Ether staking deposits touch $85B
2. Big banks are nudging the SEC for a slice of sweet Bitcoin ETF action
3. Binance founder CZ’s sentencing date postponed to late April
4. 20% of Bitcoin hash rate could go offline after halving — Galaxy Digital
5. Gold ETFs bleed $2.4B so far in 2024 as Bitcoin ETFs hit record volumes

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