Bitcoin ETFs see outflows as price drops, while USDC overtakes USDt’s monthly transaction volumes
DATA from CryptoCompare shows that Bitcoin's price initially saw a sharp drop over the past week, from around $65,000 at its start to a low under the $57,000 mark before it started recovering. BTC is now trading at $64,000.
Ethereum’s Ether, the second-largest cryptocurrency by market capitalisation, saw similar price performance, dropping from around $3,250 to a low below the $2,850 mark before recovering to now trade at $3,150 per ETH.
Headlines in the cryptocurrency space over the week were marked by the less-than-stellar launch of spot Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong, which attracted over $200 million in total assets in their debut and saw modest trading volumes of $12 million in their debut, falling short of expectations.
Despite the lackluster volumes Eric Balchunas, a senior ETF analyst at Bloomberg, revealed that these numbers were significant in Hong Kong as ChinaAMC’s spot Bitcoin ETF’s $123 million trading volume on the first day placed it among the top 20% of all ETFs launched in Hong Kong over the last three years.
In comparison, spot Bitcoin ETFs in the United States raked in nearly $4 billion during their opening week, with a single day’s trading volume topping $4.5 billion. Nevertheless, over the past week spot Bitcoin ETFs in the country saw a day with record net outflows of over $500 million.
These outflows came when Bitcoin’s price plunged below the $57,000 mark, in a trend that some compared to that of gold-backed ETFs, which have also been seeing outflows. Despite these outflows the Nasdaq-listed cryptocurrency exchange Coinbase has reported strong first quarter revenues of $1.6 billion, and net income of $1.2 billion.
Coinbase’s custodial services revenue jumped 64% to $32 million, mostly driven by rising prices and revenue generated from spot Bitcoin ETFs, with Coinbase being the custodian to eight of the eleven funds launched in the US.
These types of funds are also set to launch in Australia, mirroring launches in Hong Kong and the United States. Australia's main stock exchange, the ASX, is expected to greenlight the first spot Bitcoin ETFs by year-end. The country’s massive $2.3 trillion pension market is believed to be a potential significant driver of inflows.
Meanwhile MicroStrategy, a Nasdaq-listed business intelligence firm, has reported a net loss of $53 million in the first quarter, taking an impairment charge against the value of its 213,278 BTC holdings.
Circle's USDC overtakes Tether’s USDT in monthly transaction volumes
Circle's USDC has dethroned Tether’s USDT in terms of monthly transactions, according to Visa's data, as USDC logged 166.6 million transactions in April 2024, edging past Tether's 163.6 million.
USDC has been steadily gaining ground since late 2023. In December, it surpassed Tether for the first time, with 145 million transactions compared to Tether's 127 million. However, Tether remains the heavyweight in terms of market value, boasting over $110 billion compared to USDC's $33.5 billion. It also has a wider user base, with over 34.2 million unique users in April compared to USDC's 9.57 million.
Stablecoin trading volumes on centralized exchanges, according to CCData’s latest Stablecoins & CBDCs report, has surged 98.9% last month to a record $2.189 trillion, a dramatic increased that coincided with heightened volatility in the cryptocurrency market.
Tether’s USDT maintained a market share of 77.5% among the top 10 stablecoins by market capitalization as it kept dominating trading activity on these platforms.
Binance founder Changpeng 'CZ' Zhao sentenced to four months in prison
Over the week, the former CEO of leading cryptocurrency exchange Binance Changpeng 'CZ' Zhao was sentenced to four months in prison by a federal judge that dismissed the Department of Justice’s call for a years-long sentence.
The judge acknowledged Zhao’s acceptance of responsibility throughout the hearing and noted there was no evidence he was “ever informed” of illegal activity at the cryptocurrency exchange, after Zhao pleaded guilty in November to violating the Bank Secrecy Act.
On top of this, over the past week early cryptocurrency advocate Roger Ver, who earned the nicknamed “Bitcoin Jesus” for his contributions to the space, was indicted by US authorities on charges of mail fraud, tax evasion, and filing false tax returns.
Ver allegedly failed to report his full Bitcoin holdings when he renounced his US citizenship in 2014. US law requires former citizens to report capital gains on certain assets worldwide, including Bitcoin, and prosecutors believe he failed to disclose the full extent of his BTC holdings.
The indictment claims Ver provided misleading information that downplayed the value of his Bitcoin and his companies' Bitcoin holdings, which allegedly resulted in significantly undervalued tax returns that omitted his personal Bitcoin ownership and his companies' substantial holdings.
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.
