Key Takeaways

• Blackrock’s IBIT has overtaken Grayscale’s GBTC as the largest bitcoin ETF on the market.
• President Joe Biden vetoed a bill that would have allowed traditional banks to more easily serve as custodians of crypto assets on behalf of their customers.
• Japanese crypto exchange DMM Bitcoin was hacked for around $308 million worth of bitcoin.
• This week, all eyes are on meme coins as infamous Reddit user Keith Gill returned to GameStop trading.

Bitcoin (Bitcoin) briefly surpassed $70,000 on Monday, after spending most of last week below that mark. However, it was BlackRock’s iShares Bitcoin Trust (I BITE) that made headlines after taking down the Grayscale Bitcoin Trust (GBTC) as the largest cash bitcoin exchange-traded fund (ETF) in assets.

Additionally, US President Joe Biden vetoed a cryptocurrency bill that passed both houses of Congress and a Japanese cryptocurrency exchange was hacked for more than $300 million worth of bitcoins. Meanwhile, Keith Gill, the man behind the meme stock frenzy in 2021, fueled a rally in some meme coins with his latest bet.

Blackrock’s IBIT is now the largest Bitcoin ETF

Just over four months since it began trading on January 11, BlackRock’s bitcoin ETF has become the largest Spot bitcoin ETF by assets, overtaking Grayscale’s GBTC for first place. At the end of May, IBIT’s assets were US$19.5 billion, while GBTC’s were US$19.385 billion.

GBTC is the oldest fund with bitcoin investments that were converted to ETFs when the U.S. Securities and Exchange Commission allowed spot bitcoin ETFs earlier this year. At that time, GBTC’s assets exceeded US$24 billion.

However, as soon as other comparable products began trading, investors withdrew large sums of money from GBTC, resulting in around $17.9 billion in net outflows since January 11. In sharp contrast, BlackRock’s IBIT reported substantial inflows, attracting around $16.6 billion. this year, according to Farside Investors.

The disparity in fees between Grayscale’s ETF and other bitcoin ETFs from Blackrock, Fidelity and others has played a crucial role in the competition Grayscale’s fund has faced. For example, GBTC charges a fee of 1.5%, while IBIT charges a fee of 0.25%. Notably, shades of gray plans will soon launch an alternative spot bitcoin ETF offering with lower fees under the ticker BTC.

President Biden Vetoes Crypto Bill

President Biden, as predicted, vetoed a bill that sought to nullify the SEC’s special regulations for crypto asset custodians. This SEC policy could pose significant challenges for traditional financial firms looking to offer crypto custody services.

The White House had already signaled its intention to veto the legislation. In a statement, President Biden expressed a desire to establish a balanced regulatory framework for digital assets under the authority of existing regulatory agencies.

According to Axios, critics noted that the deadline for Congress to review the SEC’s procedural action under the Administrative Procedure Act had expired and argued that the policy did not constitute a rule, a point disputed by the Government Accountability Office.

Banking trade organizations urged the president to support removing the rule, claiming it would make cryptocurrency custody services prohibitively expensive for traditional financial firms, ultimately harming their customers.

This move from the Biden White House follows a perceived reversal in crypto policy when several filings for spot ether ETFs were approved late last month by the SEC, after it was assumed that the rejection of these financial products was imminent.

Former President Donald Trump also reversed his initial stance on bitcoin and other crypto assets, going so far as to make a campaign promise to release convicted Silk Road online marketplace operator Ross Ulbricht from prison. Ulbricht is serving a life sentence for running a platform where illegal drugs and other illicit items were purchased using bitcoin.

More than $300 million stolen from Japanese cryptocurrency exchange

On Friday, Japanese exchange DMM Bitcoin announced a hack or “unauthorized leak” during which 4,502.9 bitcoins, valued at approximately 48.2 million yen, were stolen. This translates to about $308 million worth of bitcoin.

DMM Bitcoin assured customers that their bitcoin deposits would be fully compensated through purchases supported by the group’s companies, although no timeline was provided. The theft occurred at 1:26 pm Tokyo time, coinciding with a 4,502 bitcoin transaction seen on Bitcoin blockchain.

In response, the exchange suspended cryptocurrency withdrawals, spot market purchases and new leveraged trading positions, while also delaying yen-denominated withdrawals. DMM Bitcoin stated that further updates would be shared in a subsequent announcement. According to blockchain analytics provider Elliptic, this incident ranks as the eighth largest crypto exchange hack in history and the largest since the $477 million FTX theft in late 2021.

What to expect from the markets this week

A speculative surge has driven up the prices of some meme tokens and GameStop (GME) shares on Monday, just hours after renowned retail trader Keith Gill, of 2021 GME short squeeze fame, released his latest bet on the stock. Using his nickname “DeepF—ingValue” on Reddit, Gill shared his GME picks positions on the r/Superstonk subreddit, revealing bets worth more than $115 million in shares and $65 million in call options expiring on June 21.

Gill also passes Roaring Kitty on YouTube and his most recent viral post sparked an outcry, with cat-themed meme tokens such as POPCAT and MOG. Meanwhile, unrelated GME meme coin on the Solana network it increased by around 200%. Gill’s social media activity previously sparked similar rallies in Mayemphasizing his significant influence and impact on the market since his initial analysis of GameStop in 2019, which culminated in the January 2021 short squeeze.

Although bitcoin has been in a sustained bull market throughout the year, the so-called altseason, referring to a rally in altcoins or non-bitcoin tokens, has yet to materialize. However, the frenzy surrounding meme tokens shows that there is still a lot of speculation taking place in the crypto market outside of bitcoin. Of course, it’s worth noting that trading small-cap tokens in the crypto market often amounts to nothing more than gambling.

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