IRS rolls back crypto tax change, Socket hacked for $3.3M, spot Bitcoin ETF stats

In just three full days of trading the Spot Bitcoin ETFs have put out some Incredible numbers but why has $1.1 Billion fled the grayscale Bitcoin Trust good morning you're listening to The ryzen crypto podcast by coin Telegraph with me Robert bags steering You through the crypto Cosmos with daily Dispatches from the digital Frontier if you want to know when the Bull has started running before anyone Else you better click that follow button Okay grab yourself a coffee and let's Get into it We're all still keeping our eyes on the Spot Bitcoin ETFs and how the initial Trading is playing out we're starting to See some data out of the ETFs and it has Given rise to some interesting stories So I'm going to combine them all into One concise section here firstly an Estimated 1.73 billion appears to have fled the Grayscale Bitcoin trust in just 3 days Bloomberg ETF analyst James saart put The amount of outflows from gbtc Yesterday alone at $594 million There are a few reasons for this but They all relate to a similar root cause The grayscale Bitcoin trust gbtc used to Offer arbitr trade opportunities when The shares in the fund were cheaper than The Bitcoin it held as Braden lindrea Wrote for several years gbtc offered a

Profitable trade for investors who Borrowed money to enter the fund and Then scalped profit on the grayscale Premium which reached as high as 43% in July 2019 bradden added that the gbtc Arbitrage trade vaporized when the Premium suddenly became a discount in February 2021 however as investors Agreed to a 6month lockup period when Purchasing gbtc shares many investors Were unable to sell and then perhaps Unwilling to sell as the discount got Worse now that discount is at the lowest Rate since early 2021 is around 1.55% And so many investors are straight out Of the door but the decline in the share Price may have sparked another reaction Too as Tom Blackstone reported yesterday The grayscale Bitcoin trust transferred 8,730 Bitcoin worth around $376 million To coinbase Prime deposit addresses According to the blockchain analytics Platform Arkham intelligence some Analysts believe that it is the heavy Outflows by grayscale that has weighed On the price of Bitcoin though it has Stabilized somewhat in the past 24 hours The transfers imply that grayscale may Have been forced into selling some of Its Bitcoin and here's Tom's explanation Of why since that time when gbtc became A spot Bitcoin ETF authorized Participants have been allowed to buy up Shares from investors and redeem them

For the cash equivalent of the Bitcoin These shares represent when they do so The trust is required to sell off Bitcoin in order to pay these recipients This process generally only occurs when The price of gbtc is lower than the Value of the Bitcoin it represents there Are some non- grayscale stories too the First involves Cathy Woods Arc invest That was approved for the arc 21 shares Bitcoin ETF in arc's Next Generation Internet ETF they have begun selling Their shares of the pro- shares Bitcoin Strategy ETF to buy shares of their own Arc 21 shares Bitcoin ETF the president Of the ETF store Nate gachi said of this It was only a matter of time Arc Currently holds an estimated 2535 Bitcoin which puts them fifth among The spot Bitcoin ETF issuers this is Becoming quite the interesting subplot Which funds are buying Bitcoin how much Are they buying and which fund has the Most okay so let's discount grayscale From this leaderboard as they have at The time of recording 65,00 891 Bitcoin Which is worth over $26 billion however The other funds have been buying Bitcoin Pretty aggressively according to data From cc15 Capital Black Rock is in first Place and now up to 11,439 bitcoin on its books having only Held 228 Bitcoin just 7 days ago Fidelity is in second place with

9,750 Bitcoin and they only held 440 Bitcoin this time last week and the Bronze medal goes to bitwise with 6,712 Bitcoin and they only held 57 Bitcoin on their books last Wednesday as Of 7:00 a.m. eastern on the 17th of January 2024 the total Bitcoin held by The spot Bitcoin ETFs excluding Grayscale is 36837 which is worth near 1.6 billion Doar finally in this spot Bitcoin ETF Roundup I wanted to read a tweet by Eric Balinas one of the ETF analysts at Bloomberg to be completely transparent I Didn't really know much about ETFs prior To the spot Bitcoin ETF applications so I don't don't really have a benchmark on How new ETFs perform or how much volume Existing ETFs do on a daily basis so When I read bonas's tweet yesterday it Really offered some perspective on how The spot Bitcoin ETFs are doing when Compared to other ETFs balcon ass wrote Let me put into context how insane $10 Billion in volume in the first 3 days is There were 500 ETFs launched in 2023 Today they did a combined 450 million in Volume the best one did 45 million and Many have had months to get going ibit Alone is seeing more activity than the Entire 2023 freshman class just to be Clear ibit is black Rock's I shares Bitcoin trust ETF balinas then added Underneath this tweet note half of the

500 new Freshman Class ETFs did less Than a million in volume today it is Hard to get volume harder than flows Even and definitely harder than assets Because volume has to form naturally in Marketplace can't really be faked and it Gives an ETF staying power so there are Still some questions remaining about the Performance of The Spot Bitcoin ETFs one Is of course whether all of the inflows We have seen can match grayscale's Outflows but whatever the case the spot Bitcoin ETFs are currently doing Incredibly Well yesterday socket protocol fell Victim to an approval exploit and the Attacker managed to drain $3.3 million Before the hole was plugged yesterday Afternoon socket tweeted the following Urgent socket has experienced a security Incident which affected wallets with Infinite approvals to socket contracts We have identified the issue and have Paused the affected contracts we're Working on this situation and we will Keep you informed with regular updates And next steps this approval exploit Utilized infinite approvals which is When a user grants a smart contract Permission to access and even move an Unlimited amount of a token from their Wallet although this might sound like a Silly smart contract to sign when you Have to approve many transactions it can

Save you a lot of time the issue is if The smart contract can be exploited any User who has signed for infinite Approvals can have their wallet drained Of the relevant tokens but In fairness It does seem to be pretty rare the Blockchain analyst spra away reported The issue on X and linked the ethereum Address carrying out the exploit spway Recommended that users revoke all Approvals to this address although Socket had also tweeted the following to Be crystal clear all affected contracts Have been paused users don't need to do Anything socket is a popular cross-chain Infrastructure protocol used by an array Of web 3 apps including synthex Lyra Quenta super form plasma finance and Level Finance among others though which Of these have been affected if any isn't Known yet Tom Blackstone pointed out at The end of this article something I Swear you only ever see in crypto under The official post about the exploit by Socket a fake socket account with a Similar username posted a link to a Malicious app the app promises to revoke Approvals but it is of course a fishing Attempt trying to steal from those who Are trying to avoid being stolen from Unbelievable on the 1 of January this Year a law came into effect in the US That required all us businesses to Report cryptocurrency transactions over

$10,000 digital assets were considered Cash under Section 650i of the iig J act which basically Means that anyone receiving over $10,000 In cash has 15 days to report it this Wasn't received well by many crypto Businesses coin Center executive Director Jerry Bruto noted that many Companies would find it difficult to Comply and by attempting to would risk Being found guilty of other felonies Well the US Treasury Department and the IRS have taken a step back on this Ruling according to an announcement by The IRS yesterday they stated at this Time digital assets are not required to Be included when determining whether Cash received in a single transaction or Two or more related transactions meets The reporting threshold so it's being Said that this rule is essentially on Hold until the tax agency releases a Regulatory framework for Cryptocurrencies and digital assets the Blockchain association tweet tweeted About the news stating that IRS states That 650i a problematic provision of the Infrastructure Bill requiring reporting Digital asset transactions over $10,000 Isn't effective until there's more rle Making a positive step forward given its Impossibility and breadth of reporting Required so for now us businesses

Working with crypto are exempt from that $10,000 transaction Obligation the spot Bitcoin ETF Saga Dominated crypto for months and it's Still front and center as you could tell By my summary piece at the start of this Podcast but as predicted many eyes have Turned to a spot ether ETF you may Recall from an episode last week that Eric balinas put the odds of a spot Ether ETF being approved by the SEC at 70% by may this year however not Everyone agrees with this projection Yesterday cointelegraph published an Exclusive interview with Mark Yuko Co-founder and CEO of the hedge fund Morgan Creek capital it's a really Fascinating conversation between our Host Giovani and you so I'll link the Video in the description below make sure You give it a watch when asked about the Spot ether ETF yuso said of the chances I'd probably say less than 50/50 now his Reasoning is that the SEC and Gary Gendler are both still hostile toward Crypto and that's certainly Beyond Dispute in the wake of the spot Bitcoin ETF approvals I covered Gary gendler's Official announcement on the SEC website Which was vitriolic and he made sure That everyone knew that both he and the SEC did not endorse Bitcoin in any way Yuso also highlighted another potential Bump in the road and it's a familiar one

How the SEC wants to classify ether Bitcoin is considered a commodity but Yuso worries that the SEC will see ether As a security which would of course be a Major issue this is a story that is of Course of massive importance to crypto And with some spot ether ETF Applications already in this will come To a head by May okay that is it for today that is You up to date with all the major Happenings in crypto right now consider Yourself informed thank you for Listening to the Risen crypto podcast by Coin Telegraph if you're enjoying these Daily updates please make sure you let Us know by following subscribing or Leaving a review have a great day let's Do this again [Music] Tomorrow


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