Crypto News: Grayscale’s Low-Fee Bitcoin Trust, Mt Gox Payouts, Tesla Holds BTC

April 25, 2024

Crypto World

Maciej Zerelik

We’re excited to present our newest weekly crypto update, courtesy of StealthEX and CryptoDaily! This week, we offer a streamlined summary of the most significant events in the cryptocurrency world. Wondering what major news has shaped the crypto landscape recently? Join us as we explore the key highlights!

Grayscale Launches Bitcoin Mini Trust with Industry-Low Fees to Boost Investor Appeal

Grayscale has unveiled a new product, the Bitcoin Mini Trust, aimed at revitalizing investor interest with a significantly reduced fee structure. This new Bitcoin exchange-traded fund (ETF), listed under the ticker “BTC” on NYSE Arca, positions itself as a competitive offering with a mere 0.15% fee—currently the lowest in the market. This development is part of Grayscale’s strategic response to counteract the recent substantial outflows from its Grayscale Bitcoin Trust (GBTC), which has seen billions of dollars withdrawn over the past months.

The Bitcoin Mini Trust emerges as a leaner alternative to GBTC, whose trading fees stand at 1.5%. It not only undercuts its predecessor but also offers a more attractive fee compared to other players in the sector, such as BlackRock’s iShares Bitcoin Trust (IBIT), which plans to raise its fee to 0.25% after a promotional period. 

ETF analyst Eric Balchunas praised the strategy, highlighting the tax benefits for GBTC investors moving to the new fund through a special dividend mechanism, calling it a “no brainer” for those looking to minimize costs while staying invested in Bitcoin.

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Mt Gox Creditors to Receive Updates and Possible Payouts

A decade after the monumental fall of Mt Gox, once the world’s largest bitcoin exchange, creditors are finally receiving updates on their claims. Payouts could start as early as May, promising some closure to those affected by the collapse. Despite this development, Bitcoin’s value continues to rise.

The cryptocurrency market faces potential challenges with new large-scale selling pressures on the horizon. The recent recovery in Bitcoin prices could be tested by upcoming events, including potential sales from the Mt Gox payouts. Reports suggest that around $9 billion worth of Bitcoin might hit the market soon, which could impact prices significantly.

In recent months, the Grayscale Spot Bitcoin ETF (GBTC) has sold about half of its Bitcoin holdings, totaling approximately $20 billion. This has already placed some downward pressure on Bitcoin prices. The market may see further fluctuations depending on how much Bitcoin from the Mt Gox payouts actually reaches the market.

Tesla Holds Firm on Bitcoin Investment Through Q1 2024

Tesla Inc., under the leadership of CEO Elon Musk, has maintained its significant Bitcoin reserves for the seventh consecutive quarter, according to its Q1 2024 earnings report.

The electric car giant confirmed that it has not sold any Bitcoin in the first three months of 2024, continuing its consistent investment approach. Tesla’s Bitcoin stash, amounting to 9,720 BTC, has seen a substantial increase in value, now estimated at over $711 million. This increase is largely due to the recent approval of the Spot Bitcoin ETF and anticipations of further growth following after Halving event.

In contrast to Tesla’s 2022 strategy, where it sold 75% of its Bitcoin to bolster its financials during the Covid-19 pandemic, the company has since reverted to holding onto its cryptocurrency assets. This shift reflects a strategic stance on maintaining its Bitcoin holdings as a long-term investment.

Despite the promising growth in its Bitcoin valuation, Tesla’s overall financial health faced challenges in the first quarter of 2024. The company reported a significant drop in revenue, down to $12.3 billion from an expected $21.4 billion, alongside a negative free cash flow of $2.5 billion. 

Venezuela Adopts Tether for Oil Transactions Amid US Sanctions

In response to stringent US sanctions, Venezuela has turned to the cryptocurrency Tether (USDT) to facilitate international transactions, particularly for its state-owned oil enterprise, Petróleos de Venezuela (PDVSA). This shift aims to secure oil trade revenues by bypassing traditional financial channels that are blocked by these sanctions.

Venezuela’s strategic adoption of Tether reflects a broader move to integrate digital currencies into its economic practices, especially for crucial oil sales. This decision is part of a global trend where countries explore cryptocurrencies as a solution to economic sanctions and market barriers.

The US continues to apply pressure on Venezuela, demanding significant political reforms, especially in electoral processes. Recent sanctions have aimed to curtail Venezuela’s financial activities by freezing overseas accounts and limiting access to the proceeds of oil sales. Additionally, the US Treasury has not renewed PDVSA’s general license, demanding a halt to its operations by the end of May.

Venezuela’s Oil Minister, Pedro Tellechea, noted the increasing reliance on digital currencies in contractual agreements. Under his direction, PDVSA has seen a surge in oil production, with exports reaching about 900,000 barrels per day in March—the highest in four years. The company has adjusted its sales strategy, requiring prepayment in USDT for half the value of each oil shipment. 

Solana’s Meme Coin Scandals Lead to Massive Investor Losses

In the past month, several meme coin ventures on Solana’s blockchain network have abruptly ceased operations, leaving investors out of pocket by a massive $26.7 million. This series of failures, known as “rug pulls,” has drawn criticism and warnings from the Solana founders, urging the community to exercise caution with such investments.

The blockchain, which is renowned for its high-speed capabilities, has recently become a hotspot for meme coin projects. These ventures attracted a lot of attention and briefly spiked network activity beyond even Ethereum‘s levels. Some investors struck it rich, rapidly amassing fortunes. Despite this, the overall impact on the blockchain’s utility and performance has been questioned, as these meme coins largely failed to deliver substantive value, congesting the network.

Crypto detective ZachXBT has been at the forefront, exposing these scams. He recently revealed that within just a month, 12 meme coin projects initiated during Solana presales were abandoned, with the collected funds amounting to over 180,650 SOL. He also highlighted the actions of certain influencers who promoted these unreliable projects, further enticing unwary investors.

In a striking example, a meme coin named URF, backed by popular influencer Bryce Hall, managed to gather around 2400 SOL (approximately $450,000) in its presale. Shortly after the launch, the project team vanished, leaving no trace on social media since March 26. According to ZachXBT, not only did they abandon the project, but they also misused the funds to trade other meme coins, exacerbating the losses for investors.

This article is not supposed to provide financial advice. Digital assets are risky. Be sure to do your own research and consult your financial advisor before investing.