Will Liquidity Crunch Hit Bitcoin? 🛢️
ETF inflows are great. Bitcoin keeps going up. When correction? Biden's 30% mining tax proposal. Franklin Templeton goes Degen. Musk ignites Doge. US Treasury probes crypto for terrorism finance.
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Bitcoin's on fire.
10% up in 7 days.
Stands around $72K.
Daily net inflows for Bitcoin ETFs shatter records, exceeding $1 billion for the first time.
BlackRock's ETF, IBIT, leads the pack. Total historical net inflow to $12.03 billion.
Total haul: A massive $11+ billion in net inflows for all ETFs in just two months.
Remember: The inflow in the nine ETFs also absorbed Grayscale Bitcoin Trust's $11 billion outflow.
Liquidity crisis ahead?
While the party rages, some analysts see storm clouds on the horizon - a potential liquidity crisis.
Ki Young Ju of CryptoQuant predicts a sell-side liquidity crunch within 6 months.
Reasoning: ETFs are rapidly absorbing available Bitcoin, potentially leaving a limited supply for future buyers.
And the Inflows Set to Surge
JMP Securities predicts $220 billion flowing into spot Bitcoin ETFs over the next 3 years.
This could quadruple Bitcoin's price to $280,000 per coin.
Coinbase? Well-positioned to benefit, with a price target hike to $300.
Not everyone agrees: JPMorgan offers a more conservative estimate of $62 billion in inflows over the next few years.
Brace for a Potential Dip Too?
Analysts at Swissblock warn of a "counter move" looming, with BTC potentially dropping 20% to around $58,000.
Not everyone agrees: Matrixport, another crypto firm, sees consolidation coming, not a crash. They believe the bull run still has legs, but a pause is needed before the next leg up.
"Bitcoin Man" Chimes In
Industry veteran Herbert Sim, aka "The Bitcoin Man," predicts a massive bull run fuelled by Chinese market entry.
$1 million by 2028? Sim revises his bold prediction, bumping it up from 2030 to 2028 due to recent Bitcoin ETF approvals.
$80K Ahead?
Top traders are piling on leveraged longs (basically, bullish bets on margin), hinting at a potential $80,000 price target.
Gold Bug Schiff now wishes he invested
Remember Peter Schiff, the guy who called Bitcoin a "pure ponzi?" Seems he's having a bit of buyer's remorse.
Schiff, a long-time Bitcoin critic, recently admitted he wishes he'd bought some Bitcoin back in 2010** when it was practically peanuts.
Joe Biden Proposes 30% Tax on Mining
The Biden administration plans to impose a 30% tax on Bitcoin miners' electricity consumption.
Industry Backlash: Leaders warn that the Digital Asset Mining Energy (DAME) tax could obliterate the Bitcoin mining sector in the US, forcing operations overseas.
Proposed to phase in the tax over three years—10% in year one, 20% in year two, and 30% in year three, aiming to raise $3.5 billion over a decade.
The White House argues the tax ensures miners contribute to the environmental and community costs of their operations.
Critics argue the tax will
Render many mining operations are economically unfeasible.
Drive the industry to countries with cheaper energy and less regulation.
Potentially increase the carbon footprint by pushing miners to "dirtier" energy grids.
Allow international miners to dominate the market, potentially strengthening Bitcoin against the dollar.
Ethereum Dencun Upgrade is live
The highly anticipated Dencun upgrade just blasted off on the Sepolia testnet, marking a significant step towards its mainnet debut.
This upgrade promises to be a game-changer, bringing:
Lower fees: Dencun's "proto-danksharding" feature aims to significantly slash transaction costs.
Faster transactions: Smoother and more efficient Ethereum network.
Dencun successfully launched on Sepolia, the second of three testnets.
One more testnet to conquer: Holesky is next, with deployment set for February 7th.
After a successful test run, expect an official announcement for the mainnet launch.
Why the excitement? Dencun introduces a new data storage method called "blobs" that can hold massive amounts of information at a fraction of the cost. This translates to cheaper fees and a more scalable network.
Where’s ETF?🚨
Bitcoin spot ETFs March 13 recap. Total net inflow $683 million.
Grayscale ETF GBTC saw a net outflow of $276 million in a single day. BlackRock's ETF, IBIT, net inflow of $586 million.
Meanwhile there's another ETF to join the game
Crypto firm 7RCC is one step closer to launching its environmentally-conscious spot Bitcoin ETF in the United States👇
Franklin Templeton Goes Degen. Musk Ignites Doge
"We believe that memecoins have a strong relationship with their native networks." - Traditional financial institution, Franklin Templeton.
A recent report by financial giant Franklin Templeton suggests meme coins are BFFs with their home networks.
Memecoins, like the infamous Shiba Inu and Dogecoin, seem to thrive alongside the blockchains they live on (think Solana and Ethereum).
Quick profits with low barrier to entry: Memecoins often require minimal technical knowledge and boast lower transaction fees compared to other cryptocurrencies.
Dogecoin (DOGE): The OG memecoin, leading the pack with a market cap of $26 billion, recently fuelled by Elon Musk's comments.
Elon Musk has sparked fresh excitement in the meme-coin world. During a visit to Giga Berlin, he hinted at the possibility of buying Teslas with Dogecoin "at some point."
US Treasury Probes Crypto for Terrorism Finance
The US Treasury's FinCEN is looking into crypto transactions potentially connected to Hamas, a designated terrorist organisation.
While the exact sum (reportedly $165 million) remains uncertain, investigators are digging into suspicious activity over the past three years.
The flagged transactions occurred through American institutions and might have financed Hamas activities before their October 2023 attack.
There's ongoing discussion about the role of cryptocurrencies in funding terrorist activities.
Elliptic's Clarification: Contrary to earlier reports, blockchain analytics firm Elliptic clarified that only $21,000 in crypto donations were identified as going to Hamas, with many funds being frozen by service providers.
The Surfer 🏄
Bakkt, a cryptocurrency platform owned by ICE, is at risk of being delisted from the NYSE.
Australian court rules in favor of Finder Wallet in lawsuit brought by the financial regulator.
Nigerian government requests Binance to disclose details about its top 100 users in the country.
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