IlluMyFi

USDC stablecoin issuer Circle will discontinue support for legacy consumer accounts, the company said on Tuesday. The USD Coin token is a U.S. dollar-pegged stablecoin, meaning that Circle maintains $1 in reserves -- in cash or cash equivalents -- to back each of the $25 billion worth of tokens in circulation. USDC is the second-most popular dollar-backed stablecoin behind Tether (USDT), which on Tuesday had a market capitalization of $85 billion, according to CoinGecko. "Circle is phasing out support for legacy consumer accounts and has notified individual consumers of this decision," a Circle spokesperson told Decrypt when asked about a screenshot of an email that's been making the rounds in public Telegram chats. "Account closures do not apply to business or institutional Circle Mint accounts." That means Circle will no longer create new accounts for individual retail customers -- customers who want to mint USDC will need to do so through an exchange or brokerage. Circle Mint accounts are still available, but only for institutional traders, exchange and wallet companies, and other fintech firms. Although the announcement stirred some interest on Tuesday, the Circle spokesperson added that the company hasn't offered consumer accounts for some years. The stablecoin issuer launched its Circle Mint program in February 2022. At the time, Rachel Mayer, vice president of product at Circle, said the goal was to make the accounts the "go-to destination for payments and treasury activity." Circle has seen USDC's market cap shrink a great deal since it launched Mint. At the time, there were roughly $53 billion worth of USDC tokens in circulation. A few months later, in June 2022, the Boston firm's stablecoin hit an all-time high market cap of $56 billion. For a while, it looked like USDC was primed to catch up to -- or possibly overtake -- its rival USDT. But confidence in USDC was dealt a heavy blow in March 2023, when Circle disclosed it had more than $3 billion worth of its reserves sitting in accounts at Silicon Valley Bank. The bank had just been shuttered by California banking regulators following a bank run. It was one of many crypto firms to disclose exposure to SVB. The list also included now-defunct crypto lender BlockFi, Avalanche, Proof, and Yuga Labs. The scare among investors caused Circle to temporarily lose its dollar peg as the price dropped to $0.87 -- setting a new all-time low for its price. Meanwhile, investors have been redeeming more USDC than usual during the bear market. That means they've been closing out crypto positions and converting their funds back to fiat currency, such as the U.S. dollar. That all led to a steadily declining market cap for USDC, despite news that Coinbase had acquired a stake in Circle or efforts to grow the USDC's user base in Latin America.

Sentiment

Bearish/Bullish

11.01.24 07:57

by decrypt.co

Bitcoin ETFs Notch $1.9B in Trading Volume -- But Merrill Lynch, Vanguard Won't...

Bitcoin ETFs in the U.S. are off to a raucous start. It's only midday, and already the 11 spot Bitcoin ETFs just yesterday approved by the SEC have combined for $1.9 billion worth of trading volume, exceeding analyst expectations. Despite spiking to nearly $49,000 just after markets opened in the U.S., Bitcoin was relatively subdued on Thursday. At the time of writing, it was changing hands at $46,610.54, according to CoinGecko. BlackRock's iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin Trust (FBTC) have far and away led the pack, accounting for 41% and 27% of that volume, respectively. These two ETFs alone have generated $1.3 billion in trading volume so far. Among the non-Wall Street set, the ARK 21Shares Bitcoin ETF (ARKB) has done roughly $208 million -- about 13% -- of total volume by 1 p.m. ET on Thursday. In October, when the race to offer a Bitcoin ETF seemed to be just heating up, Adam Guren, the co-founder of crypto hedge fund Hunting Hill Digital, told Decrypt that blowout ETF launches aren't all that common. "Even attaining $500 million in day-one inflows as a noteworthy challenge," he said. Last week, Dave Nadig of VettaFi and co-author of "A Comprehensive Guide to Exchange-Traded Funds" told Decrypt that if the approved funds launched with the Grayscale Bitcoin Trust in the mix, then GBTC might soak up most of the volume -- but not for the reasons the firm might want. "Where the volume shows up is a little bit of a secret sauce, mystical union quest," Nadig said last week, adding that "if GBTC is included in that initial launch, it could get all the volume because there are a lot of people who are already in it that may want to unload it." The Grayscale Bitcoin Trust (GBTC) has accounted for $217 million worth of the opening day volume, approximately 12% of the total that's traded so far. But GBTC isn't a perfect 1:1 comparison to all the ETFs that just began trading today. GBTC began as an investment product available to accredited investors in 2013. As part of the SEC approvals yesterday, Grayscale was allowed to convert GBTC into a spot Bitcoin ETF. The Securities and Exchange Commission made history yesterday afternoon when it approved rules changes that would allow the Bitcoin ETFs to trade on the NYSE Arca, Nasdaq, and Cboe. The industry has been pushing for such products to be available to U.S. investors for the better part of a decade. That's because spot Bitcoin ETFs offer a way for investors to get exposure to BTC as an asset without having to actually buy and store the cryptocurrency. But the ease with which investors can now gain exposure to BTC through ETFs comes at a price. By design, exchange-traded funds (ETFs) charge a sponsor's fee -- which pays for all the overhead taken on by the issuer and management of assets. In the days leading up to yesterday's SEC approval, issuers played a dizzying game of fee limbo. After initially setting its fee at 0.30%, which analysts said was very competitive, BlackRock turned up the heat on...