Fake ETFs, Reddit Axes ETH, and BTC Buffet

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Crypto news: Last week in the crypto world was a rollercoaster ride, featuring a flurry of rumors, retractions, and a significant market shakeup. The week was dominated by news of a potential BlackRock iShares Bitcoin spot Exchange Traded Funds (ETF) approval, which sent the price of Bitcoin (BTC) on a wild ride.

In what may be a sign of things to come, Bitcoin rallied on rumors of a fake Bitcoin ETF approval, only to fall sharply after its would-be issuer, BlackRock, refuted the story. Italian carmaker Ferrari launched a new Bitcoin payment method, even as Warren Buffett feasts on handsome returns from a crypto-related investment.

BlackRock Calms Fake News Bitcoin Frenzy

BlackRock, the asset management giant behind the iShares Bitcoin spot ETF, quickly stepped in to rebuff rumors the US Securities and Exchange Commission had approved its application. In a statement to finance journalist Eleanor Terrett, the company confirmed that the news was false.

This news sent the crypto markets into a tailspin. The Bitcoin price, which had nearly touched $30,000 on the back of the rumors, started retracing towards the $28,000 level. The volatility triggered by the rumors led to trades worth over $105.28 million being liquidated in just one hour. Specifically, $32.03 million in longs and $73.25 million worth of short trades were liquidated.

Adding to the confusion was Cointelegraph, the crypto publication that broke the fake ETF story, only to issue an apology and retraction later. The outlet published a mea culpa on X (Twitter):

“We apologize for a tweet that led to the dissemination of inaccurate information regarding the BlackRock Bitcoin ETF. An internal investigation is currently underway. We are committed to transparency and will share the findings of the investigation with the public once it is concluded.”

Crypto – Socially Speaking

Global social metrics courtesy of LunarCrush

Wen Ferrari?

Ferrari, the luxury car manufacturer, is speeding into the crypto lane, announcing plans this week to accept Bitcoin and other digital assets as payment for its vehicles in the United States. Ferrari’s Chief Marketing and Commercial Officer, Enrico Galliera, said the move was intended to expand the company’s client base.

 “This will help us connect with people who are not necessarily our clients but might be able to afford a Ferrari.”

Read more: How To Accept Crypto Payments: A Brief Guide

The company’s move to embrace cryptocurrencies is as bold as its scarlet red cars, considering the volatility of digital assets. Regulatory uncertainties in the US have also curtailed crypto inflows in recent months.

Warren Buffett Joins Crypto Party

Warren Buffett, known for his skepticism towards Bitcoin, has inadvertently found himself in the middle of the crypto party. In 2021, Buffett’s Berkshire Hathaway invested $500 million in Nubank, a Brazil-based digital bank that also facilitates Bitcoin trading. 

Following the company’s Initial Public Offering (IPO), Berkshire Hathaway invested an additional $250 million, taking the value of its stake to $750 million. This investment has paid off handsomely, with the position’s value currently standing at $840 million.

Nubank’s venture into the crypto industry, marked by the launch of its altcoin, Nucoin, has been a financial tour de force. Its stock price has surged by over 100% this year, outperforming other assets in Buffett’s portfolio.

Buffett’s indirect association with crypto through Nubank reveals a nuanced shift in how traditional investors interact with the crypto industry. Paul Tudor Jones, a veteran hedge fund manager, aptly encapsulates this change, suggesting that Bitcoin and gold may now occupy a larger portion of one’s portfolio given the current challenging US political environment.

US Government is Unintentional HODLer

In a fascinating turn of events, the US government has seized around 200,000 BTC from cyber criminals, making it one of the world’s largest Bitcoin holders. However, Uncle Sam doesn’t seem to be in a hurry to liquidate this stack and has, by default, become an unintentional Bitcoin HODLer.

Nu Holdings stock performance, Week in Crypto
Nubank stock price performance. Source: Google Finance

The federal government holds around $5.4 billion worth of Bitcoin. If liquidated, this stash could significantly move markets and increase selling pressure. However, the government has been notoriously slow to convert its Bitcoin into dollars, with the Wall Street Journal noting that the big pile of Bitcoin is more a byproduct of a lengthy legal process than strategic planning.

According to 21.co, the parent company of 21Shares, the US government has seized at least 215,000 BTC since 2020. Despite the substantial amount, it is unlikely that this entire tranche of BTC will ever be liquidated all at once, preventing a potential market crash.

Reddit Sunsets Blockchain Rewards Program

Reddit’s blockchain-based rewards initiative, Community Points, is preparing for an abrupt curtain call.  Launched with much fanfare in 2020, Community Points served as Ethereum tokens, rewarding proactive participation in selected subreddits.

The points, a symbol of reputation, resided in Reddit’s Vault, which functioned as a crypto wallet. Once doled out, these tokens were irreversible, immune to claims from Reddit or its moderators.

Read more: Effective Social Media Strategies for Cryptocurrency Startups

Users could flex their community influence by spending Points on exclusive memberships, which offered animated emojis and distinctive badges. Once spent, the tokens were irrevocably “burned,” creating scarcity and value. 

Tim Rathschmidt, Reddit’s director of consumer and product communications, outlined the challenges in scaling the program, exacerbated by evolving regulatory conditions. 

“Though we saw some future opportunities for Community Points, the resourcing needed was unfortunately too high to justify.”

Read more: Beginner’s Guide to Reddit MOONs

This Week’s Top Altcoin Performers

BeInCrypto’s top five altcoin performers this week include Bitcoin Satoshi Vision (BSV), which accelerated along an ascending support trend line to $56 on Friday. Stacks (STX), a Bitcoin Layer 2 token, broke out from an ascending parallel channel to reach $0.6546.

MX token rose 27% to $2.81, with its next target 56% higher at $4.40. Solana (SOL) increased by 23.84% to $26.80 amid a bullish inverse head and shoulders pattern.

Injective (INJ) broke out from a long-term symmetrical triangle to reach $25, close to its previous all-time high of $25.60.

Read more: What Are Altcoins? A Guide to Alternative Cryptocurrencies

Top 10 Cryptos Performance This Week

Week in Crypto, Top 10 Crypto
Top 10 Performance | Source: BeInCrypto

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