Spot Bitcoin ETF Breaking ‘Buy the Rumor, Sell the News’ Cycle – Pantera CEO

By

-

November 21, 2023

Pantera Capital CEO Dan Morehead shared his bullish outlook on the prospects of a spot Bitcoin ETF in the US market. He argued that such a product would break the typical pattern of ‘Buy the rumor, sell the News’ that has plagued previous crypto-related launches.

Morehead explained that the current Bitcoin futures ETFs, such as ProShares and VanEck, are not ideal for investors who want to gain exposure to the actual price of Bitcoin. He said that these products suffer from a negative roll yield, which means that they lose value over time as they have to sell the expiring futures contracts and buy new ones at a higher price.

He also pointed out that the futures ETFs have a high expense ratio of 0.95%, which is much higher than the average 0.4% for equity ETFs. He estimated that this would cost investors about $1.5 billion per year in fees.

According to ETFdb.com, the average expense ratio for futures ETFs is 0.95%, which is much higher than the average 0.4% for equity ETFs. This means that for every $1000 you invest in a futures ETF, you will pay $9.50 in fees every year, compared to $4 for an equity ETF. This might not seem like a big difference, but over time, it can eat into your returns significantly.

For example, if you invest $10,000 in a futures ETF with a 0.95% expense ratio and a 10% annual return, you will end up with $23,763 after 10 years, assuming no dividends or capital gains distributions. However, if you invest the same amount in an equity ETF with a 0.4% expense ratio and a 10% annual return, you will end up with $25,937 after 10 years, assuming no dividends or capital gains distributions. That’s a difference of $2,174, or 9% of your initial investment.

The reason why futures ETFs have such high expense ratios is because they are more complex and costly to manage than equity ETFs. Futures contracts have expiration dates, which means that the fund has to roll over its positions periodically to avoid delivery of the underlying assets. This involves buying and selling contracts at different prices, which can create tracking errors and tax implications.

Moreover, futures contracts are subject to margin requirements, which means that the fund has to maintain a certain amount of cash or collateral to cover its obligations. This reduces the amount of money that the fund can invest in the market, lowering its potential returns. In addition, futures ETFs may face regulatory hurdles or liquidity issues that can affect their performance and availability.

Therefore, before you invest in futures ETFs, you should weigh the pros and cons carefully and consider whether they are suitable for your risk tolerance and investment goals. Futures ETFs can offer diversification and exposure to niche sectors, but they also come with high fees and complexity that can erode your returns over time.

Morehead claimed that a spot Bitcoin ETF, which would track the price of Bitcoin directly by holding the underlying asset, would solve these problems and attract more demand from institutional and retail investors. He said that such a product would have a lower expense ratio, a positive roll yield, and a higher correlation with Bitcoin’s price movements.

He also predicted that a spot Bitcoin ETF would have a positive impact on the market sentiment and break the cycle of ‘Buy the rumor, sell the News’ that has characterized previous crypto-related launches, such as Coinbase’s IPO and El Salvador’s adoption of Bitcoin as legal tender. He said that these events were followed by sharp selloffs, as investors anticipated them and bought in advance.

He argued that a spot Bitcoin ETF would be different, as it would create a feedback loop of increasing demand and supply for Bitcoin. He said that as more investors buy the ETF, the fund would have to buy more Bitcoin to back it up, which would drive up the price of Bitcoin and attract more investors to the ETF.

He concluded that a spot Bitcoin ETF would be a game-changer for the crypto industry and that he expects it to happen soon. He said that he is optimistic about the SEC’s approval of such a product, as he believes that the regulator is becoming more open-minded and supportive of innovation in the crypto space.

Wasteful Government Spending Has Consequences

By

Paul Ugbede Godwin

-

November 21, 2023

0

_dsc1001 — Two senior officials at the U.S. Government Publishing Office, based in Washington, D.C., betrayed "public trust" and eroded employee morale by hiring unqualified workers, including an official's son, the agency's Office of Inspector General said in an internal report.

I will argue that wasteful government spending has serious and long-term consequences for the economy, the society and the environment and will provide some examples of how government waste affects different sectors and groups of people and suggest some possible solutions to reduce it.

What is wasteful government spending?

Wasteful government spending is the use of public funds for purposes that do not serve the public interest, or that are inefficient, ineffective or unnecessary. Some common forms of wasteful government spending are:

Corruption: the abuse of public power for private gain, such as bribery, embezzlement, fraud or nepotism. Pork-barrel spending: the allocation of funds to projects or programs that benefit a specific group or region, often in exchange for political support, rather than based on merit or need.

Overlapping or duplicative programs: the existence of multiple agencies or initiatives that perform similar or identical functions, resulting in redundancy, confusion and waste of resources. Mismanagement or poor oversight: the lack of proper planning, execution, monitoring or evaluation of government activities, leading to errors, delays, cost overruns or poor outcomes.

Unnecessary or excessive spending: the expenditure of public funds on items or services that are not essential or that exceed reasonable standards or expectations.

Some examples of wasteful government spending are:

Subsidizing fossil fuels that contribute to climate change and air pollution.

Building bridges to nowhere that serve no purpose or benefit.

Funding outdated or obsolete weapons systems that do not enhance national security.

Paying for overpriced or fraudulent contracts that do not deliver value for money.

Supporting corrupt or authoritarian regimes that violate human rights and democracy.

What are the consequences of wasteful government spending?

Wasteful government spending has negative impacts on various aspects of the economy, the society and the environment. Some of these impacts are:

Reduced economic growth and competitiveness: wasteful government spending reduces the amount of public funds available for productive investments in infrastructure, education, research and development, health care and other areas that enhance economic performance and innovation. It also increases the public debt and the tax burden on citizens and businesses, which discourages private investment and consumption.

Increased inequality and poverty: wasteful government spending diverts resources from programs and policies that address the needs and rights of the most vulnerable and marginalized groups in society, such as women, children, minorities, refugees and people with disabilities. It also creates opportunities for corruption and rent-seeking, which widen the gap between the rich and the poor and undermine social justice and cohesion.

Damaged environment and public health: wasteful government spending contributes to environmental degradation and climate change by supporting activities that pollute the air, water and soil, deplete natural resources, destroy habitats and biodiversity, and increase greenhouse gas emissions. It also affects public health by reducing the quality and accessibility of health care services and by exposing people to environmental hazards and diseases.

Wasteful government spending has consequences for the society, because it erodes the trust and confidence of the citizens in the government and its institutions. Wasteful government spending can also fuel public discontent and resentment, especially among those who are marginalized or disadvantaged by the unfair distribution of benefits and costs. Additionally, wasteful government spending can weaken the social cohesion and solidarity, as well as the civic engagement and participation, of the people.

How can we reduce wasteful government spending?

Reducing wasteful government spending requires a combination of political will, institutional reforms, citizen participation and international cooperation. Some possible measures to achieve this goal are:

Strengthening anti-corruption laws and institutions: creating and enforcing clear and strict rules and regulations to prevent, detect, investigate and punish corruption in all levels and branches of government. This includes ensuring the independence and accountability of anti-corruption agencies, courts, auditors and watchdogs; promoting transparency and access to information; protecting whistleblowers and journalists; and educating public officials and citizens about their rights and responsibilities.

Improving budgeting and procurement processes: adopting sound and transparent procedures for planning, allocating, executing, monitoring and evaluating public funds. This includes ensuring public participation and consultation; applying criteria of efficiency, effectiveness, equity and sustainability; conducting cost-benefit analyses; implementing performance-based budgeting; using competitive bidding; and avoiding conflicts of interest.

Streamlining or eliminating overlapping or duplicative programs: conducting regular reviews and audits of existing government programs and agencies to identify areas of overlap or duplication; consolidating or merging similar or identical functions; terminating or privatizing obsolete or unnecessary programs; and reallocating resources to priority areas.

Therefore, it is imperative that we demand more accountability and transparency from our governments and hold them responsible for how they spend our money. We should also advocate for more effective and efficient use of public funds, based on evidence, evaluation and public consultation. We should also support more innovative and creative solutions that can address the complex and interrelated challenges that we face in the 21st century.

Former NYSE President, Thomas Farley, Buys CoinDesk

By

Paul Ugbede Godwin

-

November 21, 2023

0

In a surprising move, the former president of the New York Stock Exchange (NYSE), Thomas Farley, has announced that he has acquired CoinDesk, the leading media platform for the cryptocurrency and blockchain industry. Farley, who left the NYSE in 2018 to become the CEO of Far Point Acquisition Corp, a special purpose acquisition company (SPAC), said that he was impressed by CoinDesk’s growth and influence in the emerging digital asset sector.

CoinDesk, founded in 2013, is one of the most trusted and respected sources of news, analysis, data and events for the crypto community. It operates the CoinDesk Bitcoin Price Index, which tracks the price of bitcoin across various exchanges, and hosts the annual Consensus conference, which attracts thousands of attendees from around the world. CoinDesk also produces original podcasts, videos, newsletters and research reports on various aspects of the blockchain ecosystem.

Farley did not disclose the terms of the deal but said that he plans to invest heavily in CoinDesk’s expansion and innovation. He said that he believes that CoinDesk has the potential to become the “Wall Street Journal of crypto” and that he wants to help it achieve that vision. He also said that he intends to keep CoinDesk’s editorial independence and integrity intact, and that he will not interfere with its journalistic mission.

Why the CoinDesk Sell Off?

The cryptocurrency market has been experiencing a sharp decline in the past few days, with many coins losing more than 20% of their value. The most prominent example is Bitcoin, which dropped from over $60,000 to below $40,000 in less than a week and regulatory tussles might have facilitated the sell off. What are the reasons behind this sell off, and what are the implications for the future of crypto?

There are several factors that contributed to the market crash, but the main trigger was the announcement by China that it would ban financial institutions and payment companies from providing services related to cryptocurrency transactions. This is not the first time that China has taken a hostile stance towards crypto, but it is the most severe one so far. The move was seen as a way to curb speculation, money laundering, and environmental damage caused by crypto mining.

The news from China caused a wave of panic selling among investors, who feared that other countries might follow suit and impose similar restrictions. The sell off was exacerbated by technical issues, such as network congestion, high fees, and liquidations of leveraged positions. Many traders who had borrowed money to buy crypto were forced to sell at a loss to repay their debts, creating a downward spiral.

The market crash also affected the sentiment of retail investors, who had been attracted by the hype and promise of crypto. Many of them saw their portfolios shrink dramatically, and some even lost their life savings. The volatility and unpredictability of crypto made them question its viability as a store of value and a medium of exchange.

However, not everyone is pessimistic about the future of crypto. Some experts and enthusiasts believe that the sell off is a temporary setback, and that the fundamentals of crypto are still strong. They argue that crypto offers many advantages over traditional finance, such as decentralization, transparency, innovation, and inclusion. They also point out that crypto has survived many crises before, and that each time it has bounced back stronger than ever.

The long-term outlook of crypto depends on how it will adapt to the changing regulatory and technological landscape. Crypto will have to prove its value proposition to both institutional and retail investors, as well as to governments and regulators. Crypto will also have to overcome the challenges of scalability, security, usability, and sustainability. If crypto can achieve these goals, it might become a mainstream asset class that can compete with or even replace fiat currencies.

“I have been following CoinDesk for a long time and I have always admired their quality and professionalism. They are the go-to source for anyone who wants to understand what’s happening in the crypto space. I think they have a huge opportunity to educate and inform the mainstream audience about this revolutionary technology and its implications for the future of finance, business and society. I am excited to join forces with them and support them in their journey,” Farley said in a statement.

CoinDesk’s CEO, Kevin Worth, welcomed Farley’s acquisition and said that he was looking forward to working with him to take CoinDesk to the next level. He said that Farley’s experience and expertise in the traditional financial markets would be invaluable for CoinDesk as it seeks to bridge the gap between crypto and Wall Street.

“Thomas is a visionary leader who has a deep understanding of how markets work and how media can shape them. He shares our passion for crypto and our commitment to journalistic excellence. He brings a wealth of resources and connections that will help us grow our audience, reach new markets and create new products and services. We are thrilled to have him on board as our new owner and partner,” Worth said.

CoinDesk’s acquisition by Farley is the latest sign of the increasing interest and involvement of Wall Street veterans in the crypto industry. Earlier this year, BNY Mellon, the oldest bank in the US, announced that it would offer custody and other services for digital assets.

Goldman Sachs, Morgan Stanley and JPMorgan Chase have also started to offer crypto-related products and services to their clients. Meanwhile, several prominent figures from the traditional finance world have joined or invested in crypto companies, such as Mike Novogratz (Galaxy Digital), Anthony Scaramucci (SkyBridge Capital), Stanley Druckenmiller (Duquesne Family Office) and Paul Tudor Jones (Tudor Investment Corp).

Nigerian B2B e-commerce Startup Alerzo Lays Off 100 of Its Employees

By

Ojukwu Emmanuel

-

November 21, 2023

0

Nigerian B2B e-commerce startup that equips micro-businesses with the digital products and services necessary, Alerzo, has laid off 100 of its employees.

The recent layoff is coming months after the company laid off 400 of its employees in March this year.

Speaking on the recent layoff, the company said,

“As a company, we have invested and built an end-to-end warehouse management system that has improved process automation. These technological investments have enhanced warehouse performance, including our turnover and sales metrics. Unfortunately, this has meant streamlining and consolidating certain warehouse roles”.

Sources familiar with the situation at Alerzo disclosed that most of the laid-off employees worked at the company’s 40 warehouses. They further stated that the company’s implementation of new software has led to the elimination of several approval lines in Alerzo’s warehouses, which has seen some roles become redundant.

The company disclosed that laid-off employees will be paid one month’s salary as part of their severance packages. It also noted that HMO packages for affected employees would remain active until the end of the year.

It is worth noting that from the year 2022, Alerzo has carried out a series of layoffs some of which are due to increased digitization, which saw some roles that were previously required, no longer necessary, specifically for its internal warehouse operations.

This saw Alerzo shut down 14 of its warehouses across the country, in March this year.

Founded in 2019, Alerzo is an all-in-one technology platform designed to equip micro-businesses with digital products and services necessary to run profitable and sustainable businesses.

Alerzo empowers businesses of all sizes to reach their full potential through an ecosystem of unique business tools. The startup’s comprehensive services, including banking, payment processing, loans, and business management tools, simplify day-to-day operations and allow businesses to focus on growth and success.

As one of Nigeria’s leading technological service providers, Alerzo supports over 250,000 businesses with our innovative solutions. Its POS terminals are used by thousands of people every month, with a presence in every local government in Nigeria, making its services accessible to all businesses.

At Alerzo, the startup is passionate about supporting businesses and helping them to reach their full potential.

The e-commerce startup claims to have built up a network of up to 100,000 small businesses, 90% of which are women-led. The company exclusively serves the country’s tier-2 to tier-4 cities in Southwest Nigeria – Ibadan, Ekiti, and Abeokuta, to name a few.

It connects retailers to local and multinational distributors of consumer brands, like Unilever, Nestlé, Procter & Gamble, Dangote, and PZ.

Without Alerzo, retailers can take a day off from the store to visit a central market, pay for transportation, and haul large amounts of inventory back to the store. Alerzo replaces retailers’ experience by not only reducing costs and time spent running a retail shop but also improving the livelihood of its customers.

$225 million in USDT Linked to Human Trafficking Group Freezed by Tether

By

Paul Ugbede Godwin

-

November 21, 2023

0

Tether, the company behind the popular stablecoin USDT, has announced that it has frozen $225 million worth of USDT that were allegedly linked to a human trafficking group. The freeze was requested by law enforcement agencies, who are investigating the criminal activities of the group.

According to a statement from Tether, the freeze affects 24 addresses that hold a total of 225,000,000 USDT. The company said that it is cooperating with the authorities and that it has a zero-tolerance policy for illicit use of its platform.

Tether is one of the most widely used cryptocurrencies in the world, with a market capitalization of over $70 billion. It is designed to maintain a 1:1 peg with the US dollar and is backed by reserves of fiat currency and other assets. However, Tether has also faced controversy and criticism over its lack of transparency, its susceptibility to manipulation, and its involvement in legal disputes.

The freeze of $225 million in USDT is not the first time that Tether has taken action against suspected criminals. In 2019, Tether froze $33 million in USDT that were connected to a Ponzi scheme called Plus Token. In 2018, Tether also froze $5.5 million in USDT that were linked to a cryptocurrency exchange called Bitfinex, which was accused of fraud and money laundering.

The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies.

While cryptocurrencies offer many benefits, such as lower transaction costs, faster processing, and greater privacy, they also pose significant challenges for law enforcement agencies. One of these challenges is the use of cryptocurrencies by human traffickers, who exploit them to facilitate their illicit activities and evade detection.

Human trafficking is a global crime that involves the recruitment, transportation, transfer, harboring, or receipt of persons for the purpose of exploitation. According to the United Nations, human trafficking affects every region of the world and generates an estimated $150 billion in profits annually.

Human traffickers use various methods to coerce, deceive, or manipulate their victims, such as violence, threats, fraud, or abuse of power. They also use various means to conceal their identity and operations, such as fake documents, encrypted communication, and money laundering.

Cryptocurrencies provide human traffickers with a convenient and anonymous way to transfer funds across borders and jurisdictions. Unlike traditional financial systems, cryptocurrencies do not require identification or verification of the parties involved in a transaction.

They also do not leave a traceable paper trail that can be used to track the source and destination of the funds. This makes it difficult for law enforcement agencies to identify and locate the perpetrators and beneficiaries of human trafficking, as well as to seize and recover their assets.

Moreover, cryptocurrencies enable human traffickers to access a global network of buyers and sellers of illicit goods and services. Through online platforms such as dark web marketplaces, human traffickers can advertise and sell their victims to customers who pay with cryptocurrencies. They can also use cryptocurrencies to purchase weapons, drugs, or other items that facilitate their criminal activities. These transactions are often conducted through peer-to-peer networks or intermediaries that provide anonymity and security for both parties.

The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies that requires a coordinated and comprehensive response. Law enforcement agencies need to enhance their technical capabilities and skills to monitor and analyze cryptocurrency transactions and networks.

They also need to collaborate with other stakeholders, such as regulators, financial institutions, cryptocurrency service providers, civil society organizations, and international organizations, to share information and best practices. Furthermore, they need to raise awareness and educate the public about the risks and harms of human trafficking and cryptocurrency abuse.

Cryptocurrencies are not inherently evil or illegal. They have the potential to create positive social and economic impacts for many people around the world. However, they also have the potential to be misused and abused by criminals who exploit their features for nefarious purposes. The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies that demands urgent attention and action.

The freeze of $225 million in USDT is a significant development in the fight against human trafficking, which is one of the most heinous crimes in the world. According to the United Nations, human trafficking affects millions of people every year, who are exploited for sexual or labor purposes. Human trafficking is also a lucrative business, generating an estimated $150 billion in annual profits for the traffickers.

The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies, who have to deal with the anonymity and decentralization of these digital assets. However, the freeze of $225 million in USDT shows that there are ways to track and stop the flow of illicit funds on the blockchain. It also shows that Tether is willing to comply with legal requests and to prevent its platform from being used for evil purposes.

Spot Bitcoin ETF Breaking ‘Buy the Rumor, Sell the News’ Cycle – Pantera CEO

Like this: