Monday 22 February 2021 1:28 pm

Bitcoin’s market cap crosses $1 trillion as ETFs start trading

CryptoCompare data shows the price of Bitcoin (BTC) moved from around $47,000 and moved steadily up throughout it to see a new all-time high slightly above the $58,200 mark, before the price dropped to $54,700 after Elon Musk warned prices “seem high”.

Ether (ETH) – the second-largest cryptocurrency by market capitalization – started the week above $1,770 and moved steadily up to a new all-time high above $2,000 before its price corrected and dropped back down to $1,850 at time of publishing.

This week was marked by the launch of North America’s first-ever Bitcoin exchange-traded fund (ETF) on the Toronto Stock Exchange. The fund, called Purpose Bitcoin ETF (BTCC), invests directly in “physical/digital Bitcoin” and its trading volume, according to Bloomberg Intelligence analyst James Seyffart, was well above the typical trading volumes for an ETF’s first day in Canada with over $80 million traded in the first hour.

The US currently has several active filings for a Bitcoin ETF. In Europe, several crypto-tracking products that function like an ETF are already being traded. Over the week, the Ontario Securities Commission (OSC) approved a second Bitcoin ETF.

Evolve’s Bitcoin ETF is set to trade on the Toronto Stock Exchange and, just like Purpose’s ETF, will have a 1% management fee. The Purpose Bitcoin ETF has seen steady inflows since launch, and now has hundreds of millions of assets under management, in only a few days.

Despite the increasing popularity of Bitcoin and other digital currencies, St Louis Federal Reserve President James Bullard has revealed he believes increasing interest in Bitcoin does not pose a serious threat to the US dollar as the world’s reserve currency.

Speaking on CNBC’s “Squawk Box,” Bullard said: “I just think for Fed policy, it’s going to be a dollar economy as far as the eye can see — a dollar global economy really as far as the eye can see — and whether the gold price goes up or down, or the bitcoin price goes up or down, doesn’t really affect that.”

He argued people don’t “want to go to a nonuniform currency” when conducting everyday transactions, and said investors want a stable store of value to conduct their investments. Despite his skepticism, corporations have kept on betting on Bitcoin.

Counterpoint Global, a $150 billion unit of Morgan Stanley Investment Management that has racked up wins in mutual-fund rankings, is exploring whether Bitcoin would be a suitable option for its investors.

It has also been revealed that a little-noticed report by the World Economic Forum detailed Deutsche Bank has joined the ranks of large financial institutions exploring cryptocurrency custody, and may offer services to hedge funds looking to invest in the cryptocurrency space.

Similarly, the world’s largest asset manager BlackRock, with over $7.3 trillion in assets under management, has started to “dabble” in bitcoin, at a time in which the price of the flagship cryptocurrency is above $51,000. Its CIO Rick Rieder said he would not put a number on the percentage allocations one should have on BTC, as it “depends on what the rest of your portfolio looks like.”

Financial and investing advice firm “The Motley Fool” has also revealed it decided to invest $5 million in Bitcoin and explained the move was made as it believes the cryptocurrency “will store value more effectively than gold over the long term”.

Finally, the Swiss canton of Zug started accepting both BTC and ETH for tax payments. The cryptoassets used for tax payments will be converted into Swiss Francs the authority will be receiving by Bitcoin Suisse.

Decentralized finance protocol alpha homora exploited for $37.5 million

While the decentralized finance (DeFi) space has been gaining popularity at an astounding pace, it’s still risky to lock funds in protocols associated with it. Alpha Homora was exploited for $37.5 million last weekend, as hackers managed to code a contract that tricked it into believing it was one of their own.

Using that contract, the exploiter took out a loan on another project for $37.5 million worth of stablecoins. Alpha’s treasury held $1.6 billion in ALPHA tokens at the time, which will be used to cover the losses.

Over the week Verge (XVG), a privacy-centric cryptocurrency that has been chosen as a payments option by MindGeek, suffered a massive 560,000-block reorganization. Data shows that the last 200 days of XVG transaction history “just vanished” over the block reorganization.

Verge, it’s worth noting, suffered multiple exploits over the years, so much so the price of XVG was mostly unaffected by the news.

Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various Cryptocurrencies but has no bias in his writing.