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Grayscale Bitcoin Cash, Litecoin Trusts are trading at massive premiums

For some retail investors, Grayscale’s publicly traded trusts are the only way to get exposure to cryptocurrencies, says Arcane Research.

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Early investors in the assets locked up in the Grayscale trusts for Litecoin and Bitcoin Cash are making immense profits just two days after the trusts started trading publicly.

The Grayscale Litecoin Trust is trading at a premium of 753%, according to data produced by Arcane Research, since its Monday launch. The Grayscale Bitcoin Cash Trust, which launched at the same time, is trading at a premium of 351%.

The Trusts, which opened in April 2018, solicited accredited investors (i.e. very rich), who so far have forked up $29.2 million for the Bitcoin Cash Trust and $19.5 million for the Litecoin Trust. Grayscales handles the paperwork and security. 

Then, on Monday, Grayscale made these trusts publicly tradable. This meant that the underlying assets in the trusts would be traded like stocks. This allows buyers to invest in cryptocurrency, in this case Litecoin and Bitcoin Cash, without actually having to go through the trouble of purchasing the actual coins from an exchange and holding those funds themselves.

But why would the shares trade at a premium if the shares represent the underlying cryptocurrency? 

According to Arcane Research, one of the main reasons is that trading these funds is the only way American retail investors (i.e. regular Joe Schmoes) can invest in cryptocurrencies through their 401Ks. 

The high premiums for the Litecoin and Bitcoin Cash Trusts are shared with other cryptocurrencies. Currently, the Ethereum Trust is trading at a 93% premium, and in early June traded at a 804% premium, according to Arcane. The Bitcoin Trust is currently trading for a 23% premium, it found. 

“The premiums show that the public demand for crypto exposure is high, and that the market is ripe for an ETF,” said Arcane.

An ETF, or exchange-traded fund, is a financial product that lets people buy shares in indexes that track baskets of assets. The SEC has several times rejected proposals for a Bitcoin ETF on the grounds that the crypto and Bitcoin market is still rife with manipulation.

“There are, in fact, ways to work with regulators on the asset class within existing frameworks, but they’re just not ready to approve an ETF yet,” Grayscale’s managing director, Michael Sonnenshein said in an interview last month.

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Ethereum’s Rebound is “Getting Tired” as Analyst Eyes Move to $520

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  • Ethereum has been climbing higher today alongside Bitcoin and the rest of the crypto market
  • The strength seen as of late comes as Bitcoin puts some serious distance between its recent lows and its current price levels
  • This indicates that bulls are in full control and are looking to form a “V-shaped” recovery that could allow for significantly further upside in the days and weeks ahead
  • Where the entire market trends next will depend largely on BTC, but ETH’s price action may influence that of altcoins
  • One trader is noting that Ethereum’s rally appears to be “getting tired,” which could indicate that it will retreat lower before seeing any type of intense rebound

Bitcoin has been guiding the entire market higher over the past couple of days, with Ethereum rallying up towards the mid-$500 region. This comes close on the heels of an intense correction that led the entire market to plunge.

The recovery from the recent lows has favored bulls, as it shows that the market is still caught within a crystal-clear bull market, and that further upside could be imminent in the near-term.

In a recent tweet, one trader stated that Ethereum’s recent rally might get tired and require a pullback towards $520 before extending further.

Ethereum Sees Slowing Momentum as Bulls Struggle to Break Key Resistance

At the time of writing, Ethereum is trading up just over 2% at its current price of $550. This is where it has been trading throughout the past few days and weeks, with the selling pressure seen around the price region being somewhat significant.

Where the rest of the market trends in the days, weeks, and months ahead will depend largely on Bitcoin.

Although ETH may guide the altcoin markets, it has been taking its cues from the benchmark cryptocurrency.

At the moment, Bitcoin’s strength is lending itself to bulls’ favor, and there’s a chance that they will be able to erase all of the market’s recent losses in the days and weeks ahead.

Trader Claims ETH Rally is Getting Exhausted

One trader isn’t optimistic that this ongoing Ethereum rally will last for too much longer.

He contends that it will see a pullback towards $520 before it can recoup its momentum and rally past the resistance within the mid-$500 region.

“Think ETH is getting pretty tired now, seeing if I can squeeze out $550-555, happy with the 10% moves from spot and 6% from lev today. Will be looking for the reaction around $520 for clues on the next strong move.”

Ethereum

Image Courtesy of Cold Blooded Shiller. Source: BTCUSD on TradingView.

Bitcoin’s continues reaction to its break above $18,000 should provide some insights into whether or not Ethereum will climb higher.

Featured image from Unsplash.
Charts from TradingView.

Source: https://bitcoinist.com/ethereums-rebound-is-getting-tired-as-analyst-eyes-move-to-520/?utm_source=rss&utm_medium=rss&utm_campaign=ethereums-rebound-is-getting-tired-as-analyst-eyes-move-to-520

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SEC approval: firm seeks to invest $500 million in Bitcoins

Guggenheim seems SEC approval to invest $500 million in Bitcoin The investment company is set to join the like Square and Microstrategy in Bitcoin investments Guggenheim Partners, one of the largest investment companies in the United States, has requested authorization from the Securities Exchange Commission (SEC) to allow it to allocate some of its net […]

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  • Guggenheim seems SEC approval to invest $500 million in Bitcoin
  • The investment company is set to join the like Square and Microstrategy in Bitcoin investments

Guggenheim Partners, one of the largest investment companies in the United States, has requested authorization from the Securities Exchange Commission (SEC) to allow it to allocate some of its net assets in Bitcoin.

Available information has shown that the Wall Street giant made the filing so that Grayscale Investments would be in charge of the 10% investment.

SEC has gone on to mention the different risks that may be attached with investing in cryptocurrency. The regulatory body also described crypto assets as digital assets that can serve as a medium of exchange.

Guggenheim is using one of its funds for this purpose. The fund is called the Macro Opportunities Fund. The fund available in this purse would be used to carry out this investment.

Fidelity Digital Assets and Morningstar have posited that the fund Guggenheim would be drawing from has close to $5 billion under its management in assets. This means that if the fund should carry out the 10% investment, it would be investing in Bitcoin worth $500 million.

Based on the current price of Bitcoin, the investment company would be purchasing over 27,000 BTCs.

SECs approval of Guggenheim will continue trend of institutional investors

If Guggenheim should go ahead with its purchase of $500 million worth of Bitcoin, this would continue the year long trend of institutional investors in the crypto space.

This year alone, we have witnessed institutions like PayPal integrating crypto features into their payment gateway. We have also seen Jack Dorsey’s Square investing in the popular crypto asset.

Not only that, Microstrategy has also invested deeply in the crypto industry.

All of these investments by these major institutions show their growing commitment and interest in cryptocurrencies as a viable store of wealth.

The SEC has also tried to implement a varying level of regulations on the crypto industry. The commission appears to be interested in putting some clarity to the operations of how the crypto market works.

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After exec declares Bitcoin maximalism ‘over,’ XRP price surges

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In a podcast for Lend Academy recorded Nov. 5, Asheesh Birla called Bitcoin (BTC) a “pretty innovative alternative to gold,” but added that 2020 had shown there was room for a lot of tokens in the crypto space.

Birla said that he believed Bitcoin had not “gone after” payments, and because different projects had different use cases, the coin’s overwhelming dominance was no longer a certainty:

“I think that the days when folks believed that there’s only going to be Bitcoin, I think, are over. I think it’s clear that there’s gonna be a lot of digital assets and there’s gonna be a lot more traditional assets that are gonna be tokenized as digital assets.”

The RippleNet GM made the comments when the price of XRP was roughly $0.25. It has since tripled, surging to $0.92 last week before crashing 30% amid a wider market rout.

Despite the lack of movement in XRP at the time, Birla added he was feeling bullish over the crypto space coming back “red hot again” after the 2018 crash.

“I don’t see the traditional venture capitalists as interested as they were in 2017,” he said. “But in my mind I couldn’t be happier in terms of innovation in the space.”

Both Ripple co-founder Chris Larsen and CEO Brad Garlinghouse have recently expressed frustration at the lack of regulatory clarity for Ripple in the United States. Last month, SBI Holdings CEO and Ripple board member Yoshitaka Kitao said that the blockchain-based payments may be considering relocating its headquarters to Japan. Larsen believes authorities in the U.S. have a “regulation through enforcement” policy and are “woefully behind” in preparing for the cryptocurrency-based next generation of a global financial system.

At the time of publication, the price of XRP is $0.61, having dropped 3% in the last 24 hours.

Source: https://cointelegraph.com/news/after-exec-declares-bitcoin-maximalism-over-xrp-price-surges

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