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Fidelity Amends S-1, Excludes Staking Rewards from Proposed Ethereum ETF
Fidelity has revised its S-1 registration statement for its proposed Ethereum ETF, removing any mention of staking rewards. The previous statement had indicated the fund's intention to stake assets for rewards, but this has been omitted in the amended filing. This change aligns with concerns from the SEC regarding staking cryptocurrencies, as seen in the lawsuit against Coinbase for offering staking services. Other Ethereum ETF issuers are also filing amended 19b-4 forms, with approvals expected soon for trading to commence. VanEck's Ethereum ETF has a deadline of May 23 for SEC approval or denial, though approvals may come earlier.
Global Bitcoin ATM Numbers Decline Amid U.S. Shutdowns
In 2024, the global Bitcoin ATM network witnessed significant growth, nearly reaching 38,000 machines, with the United States and Canada dominating with 91.4% of all ATMs. However, for the first time since July 2023, a decline occurred as over 300 ATMs went offline in May 2024, mainly in the U.S. and Canada. The shutdowns, attributed to law enforcement actions targeting ATMs linked to scams and extortion, led to a net decline of 280 ATMs. Despite this setback, new installations in Australia, Switzerland, and Europe partially offset the losses, showcasing ongoing global interest in cryptocurrency accessibility through ATMs.
Judge Approves $2 Billion Settlement Between New York Attorney General and Genesis
A New York bankruptcy judge has approved a $2 billion settlement between the New York State Attorney General's office and crypto lender Genesis, following Genesis Global Holdco's motion in the U.S. Bankruptcy Court in February. The settlement aims to provide restitution to investors affected by fraud and manipulation, with a victim fund established to assist New York investors who contributed over $1.1 billion to Genesis through the Gemini Earn program. The settlement does not entail an admission of guilt from Genesis, and legal action will continue against other defendants including Gemini, as stated in the NYAG's statement. Genesis had filed for bankruptcy protection in January 2023 due to financial losses after the collapses of Three Arrows Capital and FTX in 2022.
Trading Desk Insights
The markets rallied yesterday following news that the SEC has requested exchanges to expedite their 19B-4 filings for Spot ETH ETFs, signaling a potential move towards approval ahead of a crucial deadline this Thursday. This development follows a significant shift in sentiment from two Bloomberg ETF specialists, who have increased their approval expectations for an ETH ETF from 25% to 75%. This optimism has triggered a surge in ETH buying activity, with traders positioning themselves ahead of the anticipated May 24th decision. Over the past 24 hours, ETH has climbed more than 24%, reaching its highest price point since March 15th and reversing its underperformance against BTC since November 1, 2023. Notably, the recent amendments indicate that staking will not be included at this stage. The notional open interest, representing the dollar value locked in active ETH futures contracts, has surged by 25% in a single day to a record $14 billion, reflecting renewed investor interest in the ETH market.
In parallel, US BTC ETFs experienced significant inflows, totaling $237.2 million, bringing the cumulative inflows over the past six sessions to $950 million.
Among altcoins, MOG and PEPE soared as traders sought ETH beta bets. Meme coins are increasingly viewed as a proxy for the growth of their respective networks. In the utility token space, Lido's LDO rose 15%, while Arbitrum's ARB token jumped 18%.
On the policy front, the crypto market structure bill, FIT21, may be brought to a House vote this week, potentially marking a landmark moment in crypto policy and regulation.
Meanwhile, the Nasdaq eased slightly on Tuesday, retreating from the record highs of the previous session as Nvidia shares dipped ahead of its critical earnings report. Nvidia's report, due Thursday after market close, is anticipated to have a significant impact on AI tokens such as RNDR, FET, TAO, and WLD.
In other news, Fed Governor Waller emphasized the need for 'several months' of favorable inflation data before considering a rate cut.
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Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
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