Key Takeaways
- Blackrock's IBIT has overtaken Grayscale's GBTC as the largest bitcoin ETF on the market.
- President Joe Biden vetoed a bill that would have allowed traditional banks to more easily serve as a custodian for crypto assets on behalf of their customers.
- Japanese crypto exchange DMM Bitcoin was hacked for roughly $308 million worth of bitcoin.
- This week, all eyes are on meme coins, as the infamous Reddit user Keith Gill has returned to GameStop trading.
Bitcoin (BTC) briefly crossed $70,000 on Monday after spending most of last week below that mark. However, it was BlackRock's iShares Bitcoin Trust (IBIT) that grabbed headlines after toppling Grayscale Bitcoin Trust (GBTC) as the largest spot bitcoin exchange-traded fund (ETF) by assets.
In addition, U.S. President Joe Biden vetoed a crypto bill that passed both houses of Congress and a Japanese crypto exchange was hacked for more than $300 million worth of bitcoin. Meanwhile, Keith Gill, the man behind the meme-stock frenzy in 2021, fueled a rally in some meme coins with his latest bet.
Blackrock's IBIT Is Now the Largest Bitcoin ETF
A little over four months since it began trading on Jan. 11, BlackRock's bitcoin ETF became the largest spot bitcoin ETF by assets, passing Grayscale's GBTC for the top spot. At the end of May, IBIT's assets stood at $19.5 billion while GBTC's were $19.385 billion.
GBTC is the oldest fund, with bitcoin investments that converted to an ETF when the U.S. Securities and Exchange Commission allowed spot bitcoin ETFs earlier this year. At that time, GBTC's assets surpassed $24 billion.
However, as soon as other comparable products began trading, investors pulled large sums of money out of GBTC, resulting in roughly $17.9 billion in net outflows since Jan. 11. In sharp contrast, BlackRock’s IBIT has reported substantial inflows, pulling in about $16.6 billion this year, according to Farside Investors.
The disparity in fees between Grayscale's ETF and other bitcoin ETFs from Blackrock, Fidelity, and others has played a crucial role in the competition that Grayscale's fund has faced. For example, GBTC charges a 1.5% fee, while IBIT comes with a 0.25% fee. Notably, Grayscale plans to soon launch an alternative spot bitcoin ETF offering with lower fees under the BTC ticker.
President Biden Vetoes Crypto Bill
President Biden, as anticipated, vetoed a bill aimed at overturning the SEC's special regulations for custodians of crypto assets. This SEC policy could pose significant challenges for traditional financial firms looking to offer crypto custodial services.
The White House previously had signaled its intention to veto the legislation. In a statement, President Biden expressed a desire establish a balanced regulatory framework for digital assets under the authority of existing regulatory agencies.
According to Axios, critics noted that the time for Congress to review the SEC's procedural action under the Administrative Procedure Act had lapsed, and they argued the policy didn't constitute a rule, a point contested by the Government Accountability Office.
Banking trade organizations urged the president to support the removal of the rule, claiming it would make crypto custodial services prohibitively expensive for traditional finance firms, ultimately disadvantaging their customers.
This move from the Biden White House follows a perceived reversal on crypto policy when various filings for spot ether ETFs were approved late last month by the SEC after it was assumed a rejection of these financial products was imminent.
Former President Donald Trump also has reversed his initial position on bitcoin and other crypto assets, going as far as to make a campaign promise to release convicted Silk Road online marketplace operator Ross Ulbricht from prison. Ulbricht is serving a life sentence for running a platform where illegal drugs and other illicit items were purchased using bitcoin.
More Than $300 Million Stolen from Japanese Crypto Exchange
On Friday, Japanese crypto exchange DMM Bitcoin announced a hack or an "unauthorized leak" during which 4,502.9 bitcoin, valued at approximately 48.2 million yen, was stolen.That translates to roughly $308 million worth of bitcoin.
DMM Bitcoin assured customers that their bitcoin deposits would be fully compensated through procurements supported by its group companies, although no timeline was provided. The theft occurred at 1:26 p.m. Tokyo time, coinciding with a 4,502-bitcoin transaction seen on the Bitcoin blockchain.
In response, the exchange has halted crypto withdrawals, spot market purchases, and new leveraged trading positions, while also delaying yen-denominated withdrawals. DMM Bitcoin stated that further updates would be shared in a subsequent announcement. According to blockchain analytics provider Elliptic, this incident ranks as the eighth largest crypto exchange hack in history and the largest since the $477 million FTX theft in late 2022.
What To Expect in the Markets This Week
A speculative surge drove up prices for some meme tokens and GameStop (GME) shares on Monday just hours after renowned retail trader Keith Gill, famous for the 2021 GME short squeeze, disclosed his latest bet on the stock. Using his "DeepF---ingValue" alias on Reddit, Gill shared his GME options positions on the r/Superstonk subreddit, revealing bets worth more than $115 million in shares and $65 million in call options expiring June 21.
Gill also goes by RoaringKitty on YouTube and his most recent viral post triggered a rally, with cat-themed meme tokens such as POPCAT and MOG. Meanwhile, the unrelated GME meme coin on the Solana network soared roughly 200%. Gill’s social media activity previously sparked similar rallies in May, emphasizing his significant influence and market impact since his initial GameStop analysis in 2019, which culminated in the January 2021 short squeeze.
While bitcoin has been in a sustained bull market throughout the year, the so-called altseason, referring to a rally in altcoins or non-bitcoin tokens, hasn't materialized yet. However, the frenzy around meme tokens shows that there is still plenty of speculation taking place in the crypto market outside of bitcoin. Of course, it's worth noting that trading small-capitalization tokens in the crypto market often amounts to nothing more than gambling.
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