BTC

Over 200K BTC now stored in Bitcoin ETFs and other institutional products

Bitcoin ETPs now have more BTC under control on behalf of clients than ever before.

Bitcoin (BTC) investment vehicles are seeing “gargantuan” inflows this month, which is a fresh sign that traders’ appetite for BTC exposure is mounting.

Data from monitoring firm Arcane Research published this week shows that Bitcoin exchange-traded products (ETPs) now have record high BTC under management.

“Happier days” for Bitcoin ETPs as buyers pile in

Despite BTC price action failing to draw in buyers at over 50% below all-time highs, not everyone is feeling risk-off.

According to Arcane’s data, Bitcoin ETPs have seen a flurry of interest from institutional investors both this month and last.

In total, Bitcoin ETPs, which include products such as the ProShares Bitcoin Strategy exchange-traded fund (ETF), now have 205,000 BTC under their control — a new record.

“While the May recovery was strong in ETPs, June has seen even happier days!” Arcane analyst Vetle Lunde told Twitter followers while uploading the numbers on June 2.

“The first two days of June have seen gargantuan net inflows to Purpose, 3iQ Coinshares, and BITO, pushing the global BUM to a new all-time high of 205,008 BTC.”

*Bitcoin ETF investment chart. Source: Vetle Lunde/ Twitter*

In the first few days of June alone, more than 7,000 BTC flowed to ETPs, almost as much as for the entirety of May, which, itself, saw an impressive 9,765 BTC rise.

“Massive $BTC inflows into Bitcoin ETFs in June already,” Zhu Su, cofounder of asset manager Three Arrows Capital, reacted.

Little reprieve for GBTC

The Purpose Bitcoin ETF, the first Bitcoin spot price ETF to launch anywhere in the world, meanwhile had $1.294 billion worth of assets under management as of June 3, data from on-chain monitoring resource Coinglass confirmed.

*Purpose Bitcoin ETF assets under management chart. Source: Coinglass*

Things remained somewhat less rosy for industry stalwart the Grayscale Bitcoin Trust (GBTC), however.

According to Coinglass data, GBTC continues to trade near a record discount to the Bitcoin spot price, currently 28.68% as of June 3.

Previously, Cointelegraph reported on Grayscale’s ongoing battle to convert GBTC to a Bitcoin spot ETF.

*GBTC holdings, discount vs. BTC/USD chart. Source: Coinglass*

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin bond still on hold, El Salvador accused of human rights violations

El Salvador’s finance minister believes the ongoing price volatility of Bitcoin means the awaited “Bitcoin bond” won’t be launched anytime soon. Meanwhile, the country faces a “human rights crisis.”

El Salvador’s Finance Minister Alejandro Zelaya has said the country will further delay launching its anticipated billion-dollar Bitcoin (BTC) bond, citing price volatility and uncertain market conditions resulting from the ongoing Russia-Ukrainian war.

The news comes at the same time that Amnesty International accused the Salvadoran authorities of “flagrant violations of human rights and criminalizing people living in poverty.”

In a Wednesday interview on the local “Frente a Frente” (Face-to-Face) news program, Zelaya was asked if the situation with the $1 billion Bitcoin bond issuance from a “few months ago” had changed.

“No, not yet, the [Bitcoin] price continues to be disrupted by the war in Ukraine,” he said according to a rough translation. He added that “in the short term the variations are constant but in the long term it always tends to appreciate in value:”

“There is a future and there is an economic innovation [in Bitcoin] that we must bet on.”

The plan for the bond was originally announced in November 2021 by El Salvador’s president Nayib Bukele. Half of the $1 billion expected is to fund the construction of a Bitcoin City built near a volcano, with the idea that its geothermal energy could be harnessed for Bitcoin miners. The other half of the funds raised would be invested into Bitcoin.

The $1 billion bond was originally scheduled to launch in mid-March 2022 but in an interview in March, Zelaya delayed the launch, citing price volatility, giving a possible launch date around June with a timeline extending until September 2022.

Mounting fears that the country could default on an $800 million bond due in January 2023 caused rating agency Moody’s to downgrade El Salvador’s credit rating on May 4, citing a “lack of a credible financing plan.”

El Salvador’s government has been buying Bitcoin since September 2021, with Bukele announcing that the country purchased a further 500 BTC on May 9. El Salvador is estimated to have lost more than $35.6 million from its BTC investments so far.

Amnesty International: “Human rights crisis”

Meanwhile, human rights advocacy nonprofit Amnesty International accused El Salvador’s government of committing “massive human rights violations” through arbitrary arrests, ill-treatment and torture of prisoners.

A state of emergency (SOE) was declared by President Bukele on March 27 due to a rising homicide rate, which the government blamed on gangs and organized crime. The SOE has since been extended twice.

The human rights group said the SOE changed laws and legal procedures which undermine the rights to defense, the presumption of innocence, effective judicial remedy and access to an independent judge.

During the crackdown, more than 35,000 people have been imprisoned in less than three months, with the increase in arrests causing 1.7% of the country’s population over 18 years old to be in detention, resulting in overcrowding of over 250% of the prison capacity.

0 homicidios.#Seguimos https://t.co/Dzcs18bjpA

— Nayib Bukele (@nayibbukele) June 2, 2022

But, despite the abuses, many El Salvadorians agree with Bukele’s harsh measures, as the president remains popular in opinion polls. The most recent poll released by local media on Wednesday shows a near 87% approval rate for the current president.

This classic Bitcoin metric is flashing buy for first time since March 2020

The “Investor Tool” is now telling the market that “outsized returns” are due for anyone who buys Bitcoin now.

Bitcoin (BTC) bulls may only need a pair of simple moving averages (SMAs) to determine if the bottom is in this halving cycle.

In a Twitter thread on June 2, Checkmate, lead on-chain analyst at crypto analytics firm Glassnode, flagged the Investor Tool metric hitting “buy the dip” territory.

“Generational zone” enters for Bitcoin’s Investor Tool

The Investor Tool is a simple yet effective BTC price metric showing the potential for buyers to enjoy “outsized” returns.

Its creator, LookIntoBitcoin founder Philip Swift, aimed to deduce when BTC/USD is likely overbought or oversold.

The metric uses the two-year SMA and its 5x multiple. The two lines are plotted against spot price and have historically performed well at catching both generational tops and bottoms.

Now, BTC/USD is below the two-year SMA for the first time since March 2020, having crossed the line around one week before the Terra LUNA, now known as Luna Classic (LUNC), debacle sent Bitcoin to ten-month lows .

“Bitcoin Simple Moving Averages are edge when navigating bear markets,” Checkmate commented, adding that it had “entered the generational zone.”

*Bitcoin Investor Tool chart. Source: Glassnode*

Hayes “more confident” of $25,000 bottom after LFG BTC sales

While Bitcoin bulls are hardly out of the woods at $30,000, the Investor Tool’s readings strengthen a narrative that is only just beginning to emerge among analysts.

As Cointelegraph reported, Arthur Hayes, former CEO of derivatives giant BitMEX, this week suggested that May’s Terra-inspired trip to $23,800 may in fact mark a long-term BTC price floor after all.

Despite a large number of predictions calling for a crash to as low as $14,000, historical patterns may yet play a role in securing Bitcoin at or near current levels.

Even the Terra episode, itself, in which nonprofit the Luna Foundation Guard (LFG) liquidated 80,000 BTC, could have cemented solid support, Hayes wrote.

“At the bottom, a typically impervious strong hand can be forced to sell because of uneconomical arrangements festering in their trading books. The LFG is such a seller. To puke 80,000 physical Bitcoin is quite a feat,” he explained.

“After contemplating the nature in which these Bitcoins were sold, I am even more confident that the $25,000 — $27,000 zone for Bitcoin is this cycle’s bottom.”

Bitcoin daily mining revenue slumped in May to eleven-month low

Bitcoin miners have had a tough month, with revenue and profitability tanking in May. Hash rates remain high, however.

Bitcoin (BTC) mining revenue and profitability have continued to slide along with the asset’s price this year as the crypto winter deepens.

May has been one of the worst months for Bitcoin miners in the past year as revenue and profitability continue to tank. Bitcoin daily mining revenue tanked as much as 27% in May, according to data from Ycharts sourcing data from Blockchain.com.

On May 1, the analytics provider reported daily revenue of $40.57 million for BTC miners, but by the end of the month, it had fallen to $29.37 million. Daily mining revenue hit an eleven-month low of $22.43 million on May 24.

*BTC daily mining revenue YTD – ycharts.com*

Daily mining revenue spiked to a peak of around $80 million in April 2021 but has since fallen 62% to current levels.

May ended the streak for miners.

Every month since August 2021 saw cumulative mining revenue above $1b until now.

Last month’s mining revenue: $906m

— Zack Voell (@zackvoell) June 2, 2022

Mining profitability, which is a measure of daily dollars per terahashes per second, has hit its lowest levels since October 2020, according to Bitinfocharts. The crypto metrics provider currently reports mining profitability of $0.112 per day for 1 Th/s.

Furthermore, the metric has seen a decline of 56% since the beginning of the year and is down more than 75% since the 2021 highs of $0.450 each day per Th/s.

*BTC mining profitability 1y – bitinfocharts.com*

Bitcoin network hash rates remain high, however, with the current daily average at 211.82 exahashes per second, according to Bitinfocharts. The figure is down roughly 16% from its all-time high of just over 250 Eh/s on May 2.

High hash rates but low profitability may suggest that there is a far greater level of competition in the Bitcoin mining sector than seen previously. In earlier bear markets, miners have powered down their rigs as the asset price dropped and the operations became temporarily unprofitable.

Additionally, miners to exchange flows have just hit a four-month high, according to Glassnode, suggesting that they may be making preparations to sell some to cover the falling revenue.

#Bitcoin $BTC Miners to Exchange Flow (7d MA) just reached a 4-month high of 6.188 BTC

Previous 4-month high of 6.002 BTC was observed on 07 April 2022

View metric:https://t.co/WwBf5cbd33 pic.twitter.com/582pKlSeo5

— glassnode alerts (@glassnodealerts) June 1, 2022

The more you know about Bitcoin, the more optimistic you are: Block survey

Over 9,500 people around the world were surveyed for Block’s 2022 Bitcoin report, which showed that more optimistic individuals possessed a greater self-reported knowledge level of the crypto.

A survey from digital payment company Block Inc. has found that the higher respondents rated their own level of cryptocurrency knowledge, the more optimistic they are about the future of Bitcoin (BTC).

Block surveyed more than 9,500 people from the Americas (2,375), EMEA (4,360) and APAC (2,860) regions in January, ensuring to include 100 Bitcoin owners in each region for its 2022 Bitcoin Knowledge and Perceptions Report.

The report, released on Tuesday, shows a correlation between optimism and the likelihood of purchasing, and compared the result with the respondent’s self-identified level of knowledge.

Of those who identified as having fair to expert knowledge of crypto, 41% say they’re “very likely” to purchase Bitcoin in the next 12 months, compared with just 7.9% of those with “limited to no knowledge.”

Despite higher-income individuals having slightly more optimism for Bitcoin’s future than lower-income individuals, the lower-income countries of Nigeria, India, Vietnam and Argentina reported the highest rates of optimism and the highest claimed levels of cryptocurrency knowledge.

*Source: Block Inc. Bitcoin Knowledge and Perceptions* *Report* *2022*

Education and promotion seem like the key to adoption as the biggest reason, as cited by 51% of respondents who said that not buying Bitcoin was because of a lack of knowledge. The second most cited reason was the potential risk of theft (32%) and the perception that BTC had too much price volatility (30%) came in third.

Lower income nations see the utility

The report details that individuals on lower incomes actually use Bitcoin practically, with more than 40% responding they’re most likely to buy it as an easy way to send money or purchase goods.

In comparison, higher-income people more often consider Bitcoin a way to make money (50%) or to diversify an investment portfolio (30%). However, around the same amount (39%) signaled purchasing goods was also a reason they would buy.

Respondents from countries reporting a higher level of income from remittances and lower per-capita gross domestic product (GDP) were more likely to cite a Bitcoin purchase as a good way to send money or purchase goods.

Block also reported a strong correlation between countries with high inflation rates to those who responded that Bitcoin was a “protection against inflation,” with 45% of Argentinian respondents using Bitcoin this way — the highest percentage of any country.

As previously reported by Cointelegraph, crypto adoption in Argentina is double the rate of other countries in the region, with many turning to Bitcoin attempting to hedge against an inflation rate of nearly 60%.

Overall and across regions, Bitcoin was the cryptocurrency that respondents were most aware of, with 88% saying they’ve heard of it, which is twice as many as the 43% who say they’ve heard of Ether (ETH).