Headway for Bitcoin ETFs: Genesis’ Overpaid Bankruptcy Plan and More

Bitcoin is gaining ground as a substitute for gold, according to Cathie Wood, CEO of investment firm ARK Invest. Wood believes that Bitcoin, like gold, will establish itself as a safe-haven asset during times of uncertainty. ARK’s recently launched Bitcoin exchange-traded fund (ETF) received significant inflows of around $650 million in January, solidifying its position as a strong player in the market. The adoption of Bitcoin ETFs may face obstacles as they undergo due diligence by major trading platforms, which will determine their availability to financial advisers overseeing trillions of dollars in assets.

Since the launch of Bitcoin ETFs in the US, the cryptocurrency market has remained relatively stagnant. Market professionals predict that it may continue this way until the second half of the year. It is unclear whether the Bitcoin era has truly begun, but some view the current market conditions as the last remnants of a prolonged crypto winter.

In January, BlackRock and Fidelity’s Bitcoin ETFs ranked among the top 10 ETFs with the highest flows. BlackRock’s iShares Bitcoin Trust came in eighth place with $2.6 billion in net flows, while Fidelity’s Wise Origin Bitcoin ETF secured tenth place with $2.2 billion. The Grayscale Bitcoin Trust experienced significant outflows, with an estimated $5.7 billion leaving the fund in January.

Digital Currency Group (DCG), the parent company of bankrupt lender Genesis Capital, has objected to Genesis’ bankruptcy plan, alleging that it overpays creditors and violates the Bankruptcy Code. DCG claims that the proposed plan favors a small group of creditors and is not in line with the legal requirements. Genesis filed for bankruptcy in January 2023 after facing liquidity issues, owing over $3.5 billion to its top creditors.

Vast Bank, one of the pioneering US banks to integrate crypto transactions with traditional checking accounts, has announced the discontinuation of its mobile cryptocurrency banking service. The bank will refund any remaining crypto holdings to its customers through liquidation. Vast Bank entered the crypto industry in 2019 and previously collaborated with Coinbase and SAP for its crypto-friendly mobile banking app. It faced regulatory scrutiny from the Comptroller of the Currency, alleging unsafe practices related to its involvement in cryptocurrency.

MicroStrategy, the largest publicly traded holder of Bitcoin, has purchased an additional 850 BTC in January, bringing its total holdings to 190,000 BTC, valued at $8.1 billion. MicroStrategy’s CFO, Andrew Kang, revealed that the company acquired 56,650 BTC throughout 2023. The fourth-quarter earnings report showed a net income of $89.1 million, a significant improvement compared to the previous year. The company’s revenue decreased by 6.1% to $124.5 million within the same period. MicroStrategy made headlines in December 2020 as the first publicly traded company to allocate capital to Bitcoin.