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Home Blog Page 2024

21Shares Announces Liquidations to Two of Its Bitcoin ETFs

By
Paul Ugbede Godwin
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0

21Shares, a prominent crypto exchange-traded fund (ETF) issuer, has announced plans to liquidate two of its futures-based ETFs, specifically the ARK 21Shares Active Bitcoin Ethereum Strategy ETF and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF. This decision, set to take effect with a tentative liquidation date of March 28, 2025, follows a period of significant outflows in the ETF market, reflecting broader shifts in institutional investment sentiment. The last day for shareholders to sell their holdings in these ETFs is March 27, 2025, after which remaining shareholders will receive a liquidating distribution proportional to their ownership.

The move comes amid a challenging market environment, with recent reports highlighting substantial outflows from spot Bitcoin ETFs, totaling over $1.66 billion, alongside declining premiums in futures-based products. While 21Shares cited a routine review of its product lineup and the need to adapt to evolving market dynamics as the basis for this decision, industry observers suggest the liquidations are likely driven by reduced investor demand, heightened competition from spot ETFs, and the high costs of maintaining futures-based products in a volatile market.

The liquidation of 21Shares’ ETH and BTC futures ETFs—namely the ARK 21Shares Active Bitcoin Ethereum Strategy ETF and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF—has several potential impacts across investors, the ETF market, and the broader cryptocurrency ecosystem. Investors holding shares in these ETFs will face the liquidation process, with the last day to sell their shares on the open market being March 27, 2025. After this date, remaining shareholders will receive a liquidating distribution proportional to their holdings, which may not necessarily reflect the market value of the underlying assets due to transaction costs, market volatility, or inefficiencies in the liquidation process.

Investors may incur losses if the liquidation value is lower than their initial investment, especially if the market experiences downturns leading up to the liquidation date. The liquidation may trigger taxable events for investors, particularly if they realize capital gains or losses upon selling their shares or receiving the liquidating distribution. This could be a significant consideration for investors in jurisdictions with capital gains taxes. Investors who relied on these ETFs for exposure to BTC and ETH futures will need to seek alternative investment vehicles, such as spot ETFs, other futures-based ETFs, or direct cryptocurrency investments. This could lead to additional transaction costs and potential shifts in risk exposure.

The liquidation reflects broader challenges in the futures-based ETF market, particularly for cryptocurrencies. Recent outflows of over $1.66 billion from spot Bitcoin ETFs and declining premiums in futures-based products suggest waning institutional demand for these types of investment vehicles. This could signal a shift in investor preference toward spot ETFs, which offer more direct exposure to cryptocurrency price movements without the complexities of futures roll costs. The ETF market, especially for cryptocurrencies, is becoming increasingly competitive. Spot ETFs, which have lower management fees and avoid the complexities of futures contracts, are gaining traction.

The decision could put pressure on other issuers of futures-based crypto ETFs to justify their products’ value propositions. If investor demand continues to decline, other similar ETFs may also face liquidation, potentially consolidating the market around spot ETFs and other innovative products. While the liquidation highlights challenges, it also underscores the dynamic nature of the ETF market. Issuers like 21Shares may redirect resources toward developing new products that better align with investor preferences, such as spot ETFs, multi-asset crypto ETFs, or products tied to emerging blockchain technologies.

The liquidation of these ETFs could be perceived as a setback for the institutional adoption of cryptocurrencies, particularly through regulated investment products. Critics of crypto ETFs may point to this as evidence of limited demand or structural issues, potentially dampening enthusiasm for similar products in the short term. The challenges faced by futures-based ETFs may accelerate the shift toward spot ETFs, which are seen as more straightforward and cost-effective. This could increase pressure on regulators, particularly in the U.S., to approve additional spot ETH and BTC ETFs, potentially broadening access to crypto investments for retail and institutional investors.

While the liquidation of these ETFs is unlikely to directly cause significant price movements in BTC or ETH, it could contribute to broader market sentiment. If investors interpret the liquidation as a sign of reduced institutional interest, it could exacerbate bearish trends in the crypto market, particularly in an already volatile environment. The liquidation may draw attention to the regulatory challenges of offering futures-based crypto ETFs, such as the high costs of compliance, the complexity of futures contracts, and the need for investor education. Regulators may use this as a case study to refine their approach to approving and overseeing crypto ETFs, potentially influencing future product launches.

While the liquidation is framed as a strategic decision based on a routine product review, it could raise questions about 21Shares’ and ARK Invest’s ability to anticipate market trends and sustain investor interest in their crypto ETF offerings. However, the impact on their reputation is likely to be limited, given the broader market challenges and their continued presence in the ETF space. The liquidation allows 21Shares and ARK Invest to reallocate resources toward more viable products, such as spot ETFs or other innovative investment vehicles.

The liquidation may result in short-term financial losses for 21Shares, including costs associated with winding down the ETFs and potential redemptions. However, exiting underperforming products could improve their overall financial health by reducing operational costs and focusing on higher-demand offerings. The liquidation is part of the natural maturation of the crypto ETF market, where products that fail to attract sufficient assets under management (AUM) or meet investor needs are phased out. This Darwinian process is common in the ETF industry and could lead to a more robust and efficient market over time.

The shift away from futures-based ETFs highlights evolving investor preferences, particularly a demand for lower costs, greater transparency, and direct exposure to underlying assets. This trend could influence not only crypto ETFs but also other asset classes, encouraging issuers to innovate and adapt. While this liquidation pertains to U.S.-listed ETFs, it could influence sentiment in other markets where 21Shares operates, such as Europe, where the firm has a strong presence in crypto ETPs (exchange-traded products). Investors and regulators in other jurisdictions may closely monitor these developments to assess the viability of similar products.

The liquidation of 21Shares’ ETH and BTC futures ETFs is a significant event that reflects broader challenges and opportunities in the crypto ETF market. While it poses immediate challenges for investors and may signal short-term headwinds for futures-based products, it also highlights the dynamic nature of the ETF industry and the potential for innovation. For the broader cryptocurrency ecosystem, the shift toward spot ETFs and other investment vehicles could ultimately enhance accessibility and adoption, provided regulatory and market conditions continue to evolve favorably.

Goldman Sachs Mentions Crypto in Its 2024 Annual Shareholder’s Letter

By
Paul Ugbede Godwin
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0
The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly/Files

Goldman Sachs mentioned cryptocurrencies for the first time in its 2024 annual shareholder letter, marking a significant acknowledgment of the growing influence of digital assets in the financial industry. The letter, released in March 2025, highlights the increasing competition driven by new technologies, including cryptocurrencies, blockchain, and artificial intelligence, which are reshaping financial markets. Specifically, the bank noted that some competitors offer crypto-related financial products that Goldman Sachs currently does not provide, potentially influencing client preferences.

This mention reflects a shift in Wall Street’s perspective, driven by factors such as Bitcoin’s success, the approval of spot Bitcoin ETFs, and broader institutional interest in blockchain technology. However, the bank also cautioned about the risks associated with these technologies, such as cybersecurity vulnerabilities and the nascent nature of the market. If Goldman Sachs and other institutions invest heavily in blockchain, it could lead to significant economic impacts, such as job creation in tech development, new revenue streams from tokenized assets, and increased efficiency in financial transactions.

By recognizing that competitors are offering crypto-related products, Goldman Sachs is signaling an awareness of potential gaps in its product offerings. This could prompt the bank to explore or expand its involvement in crypto-related services to retain clients and remain competitive. While Goldman Sachs has historically been cautious about cryptocurrencies, this mention may indicate a strategic pivot. The bank could consider developing crypto trading desks, custody services, or blockchain-based financial products, especially given its existing blockchain efforts (e.g., its Digital Assets platform for tokenization).

The letter’s mention of risks (e.g., cybersecurity, market volatility) suggests that any move into crypto would be tempered by a strong risk management framework, aligning with Goldman Sachs’ reputation for prudent financial practices. Goldman Sachs, as a leading Wall Street institution, mentioning crypto in its annual letter further legitimizes digital assets within traditional finance. This could encourage other major banks and financial institutions to accelerate their own crypto initiatives, reducing the stigma associated with cryptocurrencies. The acknowledgment of competitors offering crypto products highlights the growing competitive landscape in financial services.

This could lead to an “arms race” among banks to develop innovative crypto and blockchain solutions, benefiting clients with more options and potentially lower costs. As major institutions like Goldman Sachs signal interest in crypto, regulators may intensify their focus on the sector. This could lead to clearer guidelines or stricter regulations, particularly around cybersecurity, anti-money laundering (AML), and consumer protection. Goldman Sachs’ mention of crypto, even if cautious, is likely to be viewed as a positive signal by crypto investors and enthusiasts. It reinforces the narrative of institutional adoption, potentially boosting market sentiment and driving further investment into digital assets.

If Goldman Sachs were to expand its crypto offerings, it could attract more institutional investors to the market, adding liquidity and stability. This would be particularly impactful following the approval of spot Bitcoin ETFs in 2024, which already opened the door for institutional capital. The letter’s reference to blockchain technology alongside crypto suggests that Goldman Sachs may prioritize blockchain-based solutions (e.g., tokenization of real-world assets, smart contracts) over speculative crypto trading. This could accelerate the development of decentralized finance (DeFi) and other blockchain applications.

If Goldman Sachs enters the crypto space, its high-net-worth clients, institutional investors, and corporate clients could gain access to crypto-related services, such as trading, custody, or investment vehicles. This would democratize access to digital assets within the bank’s ecosystem. Goldman Sachs’ involvement could bring greater trust and security to the crypto market, given its reputation for rigorous risk management and compliance. This might attract conservative investors who have been hesitant to enter the crypto space due to concerns about fraud, volatility, or regulatory uncertainty.

Increased competition in crypto-related financial products could lead to lower fees and better services for clients, as banks vie for market share in this emerging sector. Goldman Sachs’ mention of crypto alongside AI and other technologies underscores the broader trend of digital transformation in finance. This could accelerate the adoption of cutting-edge technologies across industries, reshaping how financial services are delivered.

The U.S. financial sector’s engagement with crypto could enhance its global competitiveness, especially as other regions (e.g., Europe, Asia) are also exploring digital currencies and blockchain. However, this depends on the U.S. establishing a supportive regulatory framework. If Goldman Sachs enters the crypto market and faces issues (e.g., a major hack, regulatory penalties), it could damage its reputation as a trusted financial institution. This underscores the importance of a cautious and well-planned approach.

Goldman Sachs’ mention of cryptocurrencies in its 2024 annual shareholder letter is a watershed moment that reflects the growing integration of digital assets into mainstream finance. The implications are far-reaching, signaling potential shifts in the bank’s strategy, increased competition in the financial sector, and further legitimization of the crypto market. However, the bank’s cautious tone also highlights the challenges and risks involved, suggesting that any move into crypto will be deliberate and aligned with its broader goals of innovation, client service, and risk management.

5 Taxation Tips for Investors

By
TI Partners
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0

In addition to maximizing your investment income and saving money for retirement, you should also consider how to minimize the tax burden. Here are a few taxation tips that can help investors save money.

1.      Hold Investments for a Long Time

Before determining the right allocation for your money, it is important to understand how income from multiple assets is taxed. Interest from bonds, cash holding, and stocks is taxed at different rates depending on your holding period.

Short-term capital gains are taxed at a higher rate than long-term capital gains. If you are planning to sell a taxable asset, understand these capital gain strategies:

Short-Term Capital Gains:

  • Apply to profit from investments that you held for less than one year
  • Taxed at your income tax rate
  • The tax rate depends on your tax bracket and usually ranges from 10% to 37%

Long-Term Capital Gains:

  • Apply to profit from investments that you held for more than one year
  • Taxed at low rates based on your income
  • Tax rates are usually 0%, 15%, or 20%

2.      Utilize Tax-Loss Harvesting

This approach allows you to reduce your taxable capital gains by offsetting them with capital losses. If you have sold a stock with a loss, you can use that loss to reduce taxes on your other capital gains. For example, if you realize $20,000 in gain but also sold a stock at a $10,000 loss, your taxable gain would be only $10,000.

Many people are not aware of how to pay taxes on stocks. Tax-loss harvesting is an effective technique for them. It significantly increases the after-tax value of an equity investment portfolio and lowers the overall tax liability.

3.      Reinvest Your Dividends

Many brokerages offer dividend reinvestment plans, which redirect dividends earned from mutual funds or stocks into purchasing additional shares of the same investment instead of taking cash payouts. This approach accelerates your long-term growth, but you must take into account that dividends are taxable in the year they are earned, whether you reinvest them or take them as cash.

Many people pay tax on a higher amount and forget to deduct their reinvested dividends. Missing out on any tax savings can be costly in the long run. By neglecting this, you lose the potential growth those extra dollars would have earned in the future.

4.      Add Broker Fees to Stock Costs

Buying stock is not free, and you always have to pay some commission or transfer a particular fee if you change brokerages. These costs are direct expenses incurred to help your money grow. When you buy or sell stock, the Internal Revenue Service does not allow you to write off these transactions, but you must add them to the total amount you have paid for the stock.  After all, this money came out of your pocket while taking an investment.

5.      Invest in Bonds

When stock markets perform badly, investors look for a safe place to put their money. Bonds are the perfect choice as they boost your interest income, and you do not even have to pay tax on it.

You can also consider investing in municipal bonds, which offer significant tax advantages. These bonds are mainly provided by local municipalities or the federal government to finance various projects.

The U.S. Senate’s Financial Integrity and Regulation Management Act

By
Paul Ugbede Godwin
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0

The Financial Integrity and Regulation Management Act (FIRM Act) is a legislative proposal introduced in the U.S. Senate, aimed at addressing concerns over financial institutions’ practices of denying services to customers based on subjective or politically motivated criteria. The act seeks to reform banking supervision by eliminating the use of “reputational risk” as a factor in regulatory oversight. This concept of reputational risk has been criticized for allowing regulators to pressure banks into refusing services to certain industries, businesses, or individuals, often without clear evidence of financial instability or illegal activity.

The FIRM Act is intended to ensure that all law-abiding American consumers and businesses, regardless of their political, religious, or ideological affiliations, have equal access to financial services. Proponents argue that this legislation is necessary to prevent regulatory overreach, where federal banking agencies might use vague or subjective criteria to influence banks’ customer relationships.

For instance, there have been reports of banks terminating relationships with clients involved in controversial but legal sectors, such as cryptocurrency or firearms, allegedly due to regulatory pressure. The act aims to create a more predictable and fair financial system by focusing regulatory supervision on objective, market-based risks rather than perceived reputational concerns.

The legislation has garnered support from various stakeholders, including business organizations and some political leaders, who view it as a step toward protecting economic freedom and reducing arbitrary discrimination in financial services. However, it may face opposition from those who argue that reputational risk is a legitimate supervisory tool to ensure the stability and integrity of the financial system. As of early 2025, the FIRM Act is under consideration in the Senate Banking Committee, but its ultimate passage and impact remain uncertain.

Many banks have been reluctant to serve crypto-related businesses due to perceived “reputational risk,” regulatory uncertainty, and pressure from federal banking regulators. This has led to instances of “de-banking,” where crypto firms are denied accounts or have existing accounts terminated, even when they are operating legally. By eliminating “reputational risk” as a factor in regulatory oversight, the FIRM Act would reduce the ability of regulators to pressure banks into refusing services to crypto businesses based on subjective or ideological concerns. This could lead to; Crypto firms might find it easier to open and maintain accounts with traditional financial institutions, improving their operational stability.

The act could prevent banks from arbitrarily denying services to crypto businesses, especially those engaged in legal activities, fostering a more inclusive financial ecosystem. Improved banking access could lower barriers to entry for new cryptocurrency startups, encouraging innovation and competition in the sector. Federal banking regulators, such as the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), have sometimes used reputational risk as a pretext to discourage banks from engaging with crypto firms.

This has been evident in policies like the controversial “Operation Choke Point,” where regulators were accused of targeting certain industries, including crypto, without clear evidence of financial instability or illegal activity. The legislation would shift regulatory supervision toward objective, market-based risks, such as credit risk, liquidity risk, or operational risk, rather than subjective concerns like reputational risk. This could benefit the crypto industry by: Crypto businesses might face less scrutiny from regulators over vague or politically motivated concerns, allowing them to operate with greater certainty.

The act could ensure that crypto firms are evaluated based on their actual financial practices and compliance with existing laws, rather than being penalized for being part of a controversial or emerging industry. By focusing on objective standards, regulators might be incentivized to provide clearer, more consistent guidance for banks on how to engage with crypto businesses, reducing uncertainty in the sector.

Institutional adoption of cryptocurrencies, such as Bitcoin and Ethereum, has been hindered by the reluctance of traditional financial institutions to engage with the sector. Banks, payment processors, and custodians often cite regulatory pressure and reputational risk as reasons for avoiding crypto-related services. If banks feel less regulatory pressure to avoid crypto clients, the act could lead to: More banks might offer services like custodial solutions, payment processing, and lending to crypto businesses, facilitating broader institutional adoption.

Financial institutions might develop new products, such as crypto exchange-traded funds (ETFs), lending platforms, or stablecoin services, knowing they are less likely to face regulatory backlash based on reputational concerns. Greater banking support could help integrate cryptocurrencies into the mainstream financial system, making them more accessible to retail and institutional investors. While the FIRM Act could provide significant benefits to the cryptocurrency industry, there are potential risks and challenges to consider. The FIRM Act does not eliminate all regulatory oversight of the crypto industry.

Regulators could still target crypto businesses under other pretexts, such as concerns over money laundering, consumer protection, or systemic risk. Crypto firms would still need to comply with laws like the Bank Secrecy Act (BSA) and regulations enforced by agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Some regulators and policymakers might oppose the FIRM Act, arguing that reputational risk is a legitimate tool for managing emerging risks in the financial system, including those posed by cryptocurrencies.

If the act faces significant pushback, its passage could be delayed or weakened, limiting its impact on the crypto sector. Even if banks are less constrained by reputational risk, they might still choose not to serve crypto businesses due to perceived market-specific risks, such as volatility, cybersecurity threats, or regulatory uncertainty. The FIRM Act would not directly address these concerns, meaning crypto firms might still need to demonstrate robust risk management practices to secure banking relationships.

The FIRM Act is part of a broader debate over how to regulate cryptocurrencies and emerging technologies in the financial sector. Its passage could signal a shift toward a more innovation-friendly regulatory environment, encouraging other legislative efforts to clarify the legal status of cryptocurrencies, such as defining whether certain tokens are securities or commodities. By reducing regulatory barriers to crypto businesses, the FIRM Act could help the United States maintain its position as a leader in blockchain and cryptocurrency innovation. This could attract more crypto firms to operate in the U.S., rather than relocating to jurisdictions with more favorable regulatory climates, such as Switzerland or Singapore.

Halborn Greenlights BlockDAG—Focus Shifts to CertiK Audit! PI Market Cap Hits $15B & Hedera ETF Advances

By
TI Partners
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0

The PI market cap has escalated to $15 billion, showcasing that enthusiasm for crypto remains robust among everyday buyers. Anticipation is building around a potential Binance listing, with hopes that March 14—Pi Day—will bring significant news. At the same time, institutional entities are positioning themselves. Grayscale’s application for a Hedera Grayscale ETF points to a rising demand for officially sanctioned crypto investment vehicles.

However, as funds from both public and private sectors pour into crypto, security is crucial. BlockDAG (BDAG) excels here, having completed a Halborn audit with a CertiK certification pending, positioning it as a benchmark for blockchain safety. This dedication, combined with a historic $202.8 million presale, positions it as one of the best cryptos to buy today.

PI Market Cap Touches $15 Billion: Could a Binance Listing Propel It Further?

The PI market cap has rocketed to $15 billion, positioning Pi Coin as a focal point in the fluctuating crypto market. With its price peaking at $2.98, the currency’s robust performance fuels debates over its potential to reach $10. Many are optimistic that an upcoming Binance listing could serve as a significant growth trigger.

A recent poll by Binance Square reveals that 86% of respondents support listing Pi Coin. As March 14—Pi Day—draws near, market participants are keen to see if this could further escalate the PI market cap, driving the currency to new peaks.

Hedera Grayscale ETF Edges Toward Approval

Grayscale Investments has progressed in diversifying its crypto ETF portfolio by filing a Hedera Grayscale ETF with the U.S. Securities and Exchange Commission (SEC). The Nasdaq 19b-4 filing signifies Grayscale’s sixth venture into altcoin-focused ETFs, underscoring increased institutional backing for Hedera (HBAR).

While the SEC has previously recognized filings for other altcoins like XRP and Solana, the review for the Hedera Grayscale ETF continues. Analysts suggest that an approval could facilitate a broader range of crypto-based index ETFs. With regulatory focus intensifying, the market watches closely for the SEC’s forthcoming decisions on Grayscale’s latest cryptocurrency venture.

BlockDAG Sets New Security Benchmarks, Awaits CertiK Review

BlockDAG is raising the bar for security among blockchain projects. Having completed an extensive Halborn audit, it’s now in the process of CertiK certification, highlighting its commitment to robust security protocols. These rigorous independent evaluations proactively address vulnerabilities, ensuring the platform’s resilience. By embracing such thorough audits, BlockDAG demonstrates that security is foundational to its operations.

In an industry plagued by security breaches, from hacks to abrupt project failures, BlockDAG confronts these challenges by building a network designed to resist such threats. The Halborn audit affirmed the robustness and integrity of its architecture, and the ongoing CertiK review aims to further enhance its trustworthiness.

Such proactive security measures provide reassurance to participants within the ecosystem, affirming its durability and safety. In a market becoming increasingly wary of unverified platforms, BlockDAG’s commitment to security validates its position as one of the best cryptos to buy today.

BlockDAG’s security-first approach has catalyzed unprecedented demand in its presale, accumulating $202.8 million and selling over 18.7 billion BDAG coins, with its value soaring by 2380% since the initial offering. This remarkable growth from $0.001 to $0.0248 has heightened expectations, with forecasts suggesting a 20,000x return on investment for early backers.

As the crypto market remains uncertain, investors are drawn to projects that blend growth prospects with stringent security, making BlockDAG a standout candidate as one of the best cryptos to buy today.

The Bottom Line

The upcoming period could be crucial for the PI market cap, particularly with the buzz around a potential Binance listing on March 14. Should this occur, Pi Coin might experience a significant uptick in both value and public visibility. Simultaneously, the Hedera Grayscale ETF awaits SEC approval, which could herald a new era of institutional engagement in alternative cryptocurrencies.

However, the spotlight is firmly on BlockDAG. With the Halborn audit complete and a CertiK certification on the horizon, it is distinguishing itself as a highly secure blockchain endeavor. The crypto presale, which has raised a remarkable $202.8 million, coupled with analyst predictions of up to a 20,000x return, suggests that early investors may witness transformative profits.

 

Presale: https://purchase.blockdag.network

Website: https://blockdag.network

Telegram: https://t.me/blockDAGnetworkOfficial

Discord: https://discord.gg/Q7BxghMVyu

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