Block 1: Key news

JPMorgan holds shares in Bitcoin Spot ETF

JPMorgan has revealed its investment in Bitcoin Spot ETFs. The SEC filing shows stakes in Bitcoin ETFs issued by BlackRock, Fidelity and Bitwise.

Shares in JPMorgan's Bitcoin Spot ETFs
Phoenix Trades

Bloomberg's James Seyffart notes, however, that these investments are globally linked to their market-making roles and can fluctuate. Moreover, this document only shows long positions, but does not show shorts or derivatives, which skews the reality of holdings. Last week, Wells Fargo also declared its exposure to Bitcoin ETFs.

Marathon Digital unveils its results

Bitcoin mining giant Marathon Digital has unveiled its financial results for Q1 2024. The company saw revenues increase by 224% in Q1, reaching $162.5 million. Profits were also up 184%, to $337.2 million. The company's mining capacity increased by 142% to 27.8 EH/s, with a target of 50 EH/s by the end of 2024. Marathon produced 2,811 BTC during the quarter, selling 26% to finance its operations.

Donald Trump is open to cryptocurrency donations

At the "Trump Cards NFT Gala", a dinner gathering holders of his NFT collection, Donald Trump confirmed that his campaign would accept cryptocurrency donations and that he wanted to simplify regulations to favor crypto businesses in the US. He criticized current regulations for being hostile to cryptocurrencies and said he wanted to stop the exodus of crypto companies from the country. Trump also launched a collection of NFTs in 2022, raising nearly $5 million in ethers (ETH).

i asked donald trump how he's going to keep crypto businesses in america.

sounds bullish ??

- Malcolm (33.3%) (@macdegods) May 9, 2024


El Salvador: It's now possible to track government BTC transactions

El Salvador has launched a blockchain explorer to track its bitcoin transactions, a transparency initiative led by the National Bitcoin Office (ONBTC). The portal allows the public to view the government's BTC purchases and sales, which currently hold 5,748 BTC. Although El Salvador has posted a $57 million capital gain on its investments, bitcoin adoption remains limited in the country due to various technological and other obstacles. Nevertheless, the country continues to promote Bitcoin education to train tomorrow's developers.

El Salvador's BTC account balance

Block 2: Crypto Analysis of the week

Six new Spot ETFs, three backed by bitcoin (BTC) and three by ether (ETH), began trading in Hong Kong on Tuesday April 30. The three asset managers are: Bosera Funds, China Asset Management (the Hong Kong subsidiary) and Harvest Global Investments.

These are the first bitcoin and ether cash ETFs to be launched in the region, but trading volumes have been fairly low so far. Transactions can be made in Hong Kong dollars or US dollars, with China AMC also allowing transactions in yuan.

Two weeks after their launch, the three Hong Kong Spot Bitcoin ETFs have $219 million in assets under management. The three Ethereum Spot ETFs, on the other hand, have cumulative assets under management of $39 million. By way of comparison, the Bitcoin ETFs launched in the United States on January 11 recorded a trading volume of over $4.5 billion on the first day of their launch earlier this year.

Trading in Bitcoin Spot ETFs in Hong Kong
SoSo Value

The launch of these ETFs in Hong Kong was eagerly awaited by the crypto community, as Asia boasts a far larger base of cryptocurrency holders than any other region in the world.

Number of cryptocurrency holders worldwide
Statista, Huobi Research

There are a number of reasons why these ETFs are so popular in Hong Kong. Already, the US capital markets remain the dominant playground for institutions worldwide.

On January 11, when BlackRock and co. launched their Bitcoin Spot ETFs, many financial institutions, including Asian ones, jumped on board these US products, reducing the appeal of Hong Kong's almost two months later. It's hard to imagine a world where Hong Kong ETFs become more important than US-traded funds.

In addition, Asian crypto-investors, as in the West, mainly invest directly in native assets via cryptocurrency platforms, reducing the appeal of these funds for retail investors.

It's also worth bearing in mind that cryptocurrencies are still banned in mainland China. Unless this legal situation is reversed, nearly 1.4 billion people in Asia will not be allowed to allocate capital to these funds. Allowing mainland China to trade these Crypto ETFs would run counter to Beijing's monetary policy of controlling the rise and fall of the yuan (RMB).

Capital controls in China are designed to regulate the inflow and outflow of money, prevent excessive currency fluctuations and capital flight, and maintain the stability and value of the yuan. Nevertheless, capital controls remain a central element of China's economic policy, enabling its exports to remain competitively priced on world markets.

And allowing a trader to buy shares in a yuan-denominated Crypto ETF via a local brokerage account, then sell them against cryptos, would create a very effective way of circumventing capital controls. So there's little chance of Beijing changing its tune when it comes to promoting the cryptosphere.

We'll now have to wait and see how ETFs in Hong Kong evolve over the next 12 to 18 months, but for now, the hype isn't there.

Block 3: Gainers & Losers

Crypto chart (Click to enlarge)


Block 4 : Things to read this week

Tornado Cash developer convicted of laundering $1.2 billion in crypto (Wired)

The rise of the Finternet (Project Syndicate)