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Stone Ridge Shutting down Bitcoin Futures Fund, Returning Money to Investors

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Stone Ridge Asset Management, a global asset management firm based in New York, announced Monday plans to liquidate and dissolve its Stone Ridge Bitcoin Strategy Fund with the Securities and Exchange Commission (SEC).

According to an SEC filing, Stone Ridge said it expects to liquidate the Bitcoin Futures Fund next month, October 21, and from November 3, shares of the funds will not be available to purchase.

“The adviser will reduce the Fund to cash in preparation for the Liquidation Date. Proceeds of the liquidation of the Fund are expected to be distributed to shareholders in cash. The liquidation proceeds are expected to be distributed promptly following the Liquidation Date in full redemption of each shareholder’s shares of the Fund,” the filing said.

The shutdown comes as the Fund launched in late 2019 with a strategy to invest in Bitcoin (BTC) via futures contracts, failing to find interest from investors. Currently, the Fund holds only about $2.3 million in assets under management.

The Fund likely faced obstacles not just from the Bitcoin bear market but also SEC approval of several competing Bitcoin Futures ETFs, at least some of which charged fees less than the Stone Ridge product.

Stone Ridge was founded in 2012 by current CEO Ross Stevens. In 2017, the founder launched the Bitcoin-driven New York Digital Investment Group (NYDIG), where he serves as executive chairman.

Stone Ridge Asset Management and NYDIG are both Stone Ridge Holdings Group subsidiaries. NYDIG is a full-service, vertically integrated Bitcoin-only financial services company.

Market Struggles to Recover

This year, Bitcoin ETFs have not been as good investments as expected. And the same scenario is being seen in stocks in the S&P 500 (such as Netflix (NFLX), Under Armour (UAA), Ceridian HCM (CDAY), Caesars Entertainment (CZR), Epam Systems (EPAM), among others) whose performance also turned worse this year.

This year, inflation crises have tremendously impacted the economy and the stock market globally. The $822.9-million-in-assets ProShares Bitcoin Strategy ETF is one of the major ways most investors use ETFs to gain exposure to cryptocurrency.

As of June, the largest Bitcoin ETF, ProShares Bitcoin Strategy, was down 53.6% this year. Such discouraging performance shows the underappreciated risk of the new asset class because most investors were not prepared to face hard questions like What would happen during a market crash? Or What would happen if a crypto exchange company went bankrupt?’

And that makes total sense, as it tracks the price of Bitcoin. Bitcoin price itself is down more than 50% this year.

ProShares Bitcoin Strategy is not just the largest Bitcoin ETF that is suffering. The entire crypto ETF universe is not doing well this year.

And the ETFs that own big positions in Bitcoin-based companies are underperforming. The First Trust SkyBridge Crypto Industry and Digital Economy ETF, which puts a bigger piece of its portfolio in Coinbase than any other ETF, is down 69% this year.

Despite the low performance of ETFs, the industry is still pushing for the launch of more Bitcoin ETFs. Several firms have filed with the SEC to get approval to launch their spot Bitcoin ETFs.

Grayscale has been pushing for the SEC to approve their request to convert their Bitcoin trust into a spot ETF.

Cathie Wood: SEC to Approve Multiple Bitcoin ETFs Simultaneously

Cathie Wood, Chief Investment Officer and Portfolio Manager at ARK Investment Management LLC, has hypothesised that the United States Securities and Exchange Commission (SEC) would approve many spot Bitcoin ETFs all at the same time.

During an interview with Bloomberg on August 7, 2023, Wood, who has over 40 years of experience and started ARK in 2014, provided this significant prediction. The conversation took place in 2023.

An application for a spot Bitcoin exchange-traded fund was submitted by ARK Investment Management in June of 2023. ARK Investment Management is well-known for its focus on disruptive innovation, and the firm submitted the proposal.

The growing interest from major financial firms like BlackRock, Fidelity, WisdomTree, VanEck, and Invesco, all of which have submitted applications for spot Bitcoin ETFs similar to ARK’s, reflects a broader trend in the market.

Grayscale, a prominent digital currency investment authority founded in 2013 by Digital Currency Group, is currently engaged in legal proceedings with the SEC. Holding assets including BTC, ETH, ETC, MANA, SQL, and BCH, the company sent a letter to the regulator in July, urging simultaneous approval of all proposed spot Bitcoin ETFs. This request was made to promote fairness among applicants and prevent any single ETF from gaining an advantage.

The SEC has until August 13, 2023 to make a judgement on ARK’s petition; so far, the agency in the United States has never granted its approval to a spot cryptocurrency ETF. ARK is proposing to list its shares in an exchange-traded fund (ETF).

The regulatory body in charge of the sector has a maximum of 240 days, which brings the deadline for their decision forward to January 2024.

Because regulators in other countries, most notably Canada, have in the past allowed analogous spot ETF filings from bitcoin firms, the drive for spot Bitcoin ETFs is gathering momentum. The demand for spot Bitcoin ETFs receives a further boost as a result of this.

The prediction of simultaneous approval made by Wood and the campaign for fairness made by Grayscale both bring to light the possibility of a shift in the regulatory atmosphere for bitcoin exchange-traded funds (ETFs) in the United States.

Dinari Secures $10M Seed Funding, Expands Crypto Asset Offerings

Dinari, a blockchain-based securities investment platform, recently announced a significant milestone in its journey, securing $10 million in seed funding during the fourth quarter of 2023. This substantial investment round saw participation from notable entities such as 500 Global, Balaji Srinivasan, Alchemy Platform, Version One Ventures, and Sancus Ventures, among others. This financial injection is poised to bolster Dinari’s growth and innovation in the rapidly evolving blockchain and cryptocurrency landscape.

The company has been making strides in expanding its offerings, particularly through the introduction of Real World Assets (RWAs) of US stocks, ETFs, and other assets, backed on a 1:1 basis on the Arbitrum One network. This move represents a significant leap in bridging traditional finance (TradFi) with decentralized finance (DeFi), making it easier for users to access and invest in traditional asset classes through a blockchain-based platform.

Further enhancing its product suite, Dinari has expanded its dShare offerings, incorporating new crypto-themed assets on Arbitrum. This includes more than 10 new dShares, now available to users. These dShares grant on-chain users access to crypto-related stocks and ETFs, including innovative Bitcoin ETFs, with applicable dividend payouts. This development aligns with Dinari’s commitment to providing a comprehensive and user-friendly platform for trading and investment in both traditional and crypto-centric assets.

Dinari’s expansion doesn’t end here. The company has already hinted at more significant updates in the coming weeks, promising to keep its users and investors updated through its social media channels. This proactive communication strategy ensures that all stakeholders are well-informed about the latest asset, product, and partnership announcements.

For those interested in learning more about Dinari and its dShares, the company has made resources available on its website and invites interested parties to join the conversation on their Discord server. This approach not only provides comprehensive information about their offerings but also fosters a community of informed and engaged users and investors.

In conclusion, Dinari’s successful funding round and the launch of new dShare assets mark a noteworthy advancement in the integration of traditional and digital asset markets. The company’s focus on innovation, accessibility, and transparency is set to significantly influence the trading and development options available for traditional finance assets in the blockchain space.

Google to Unleash Bitcoin ETF Ads

Starting January 29, 2024, Google will implement a major policy change by allowing advertisements related to Bitcoin and other cryptocurrencies, including Bitcoin ETFs, to be published on its platform. This move is initially focused on the United States, with plans to expand it globally. This development is significant for the blockchain and cryptocurrency sectors, as it opens up new avenues for exposure and awareness among a vast audience.

Google’s advertising network is known for its extensive reach, capable of targeting billions of people worldwide. The new policy requires advertisers to comply with local regulations, ensuring that the ads meet specific standards. This change follows Google’s decision in December 2023 to revise its guidelines regarding cryptocurrencies and related assets, aiming to clarify parameters for promoting Coin Trusts linked to cryptocurrencies.

The effect of this policy change is expected to be considerable, given the massive reach of Google Ads, which covers around 90% of the global population. The precise targeting capabilities of Google’s advertising platform, including demographic data, interests, habits, and recent searches, are likely to enhance the effectiveness of these campaigns. This could lead to a significant increase in the awareness of Bitcoin ETFs, not just among traders and investors, but also among the general public, potentially opening up new opportunities for exposure to Spot ETFs.

In the broader context of the cryptocurrency market, this development arrives at a time when the industry is witnessing various shifts and trends. Analysts suggest that Bitcoin could attract greater interest throughout 2024, with macro signals indicating potential growth in the digital asset sector. However, views on Bitcoin’s future role and its correlation with other financial assets like gold and the US dollar vary among experts.

In summary, Google’s decision to allow Bitcoin and cryptocurrency ads, starting with Bitcoin ETFs, marks a significant moment for the cryptocurrency industry, potentially leading to increased institutional and retail exposure, and influencing market dynamics and investor behavior in 2024 and beyond.

Binance Research Reveals Key Crypto Market Trends

Binance Research, the research arm of the world’s largest cryptocurrency exchange, has released its latest report detailing the key trends in the crypto market for February 2024. The report highlights a booming crypto market, with total market capitalization increasing by an impressive 40% over the month.

One of the primary drivers behind this surge was the sustained inflows from spot Bitcoin ETFs, which were launched in the United States in January. According to the report, these ETFs attracted over $4.9 billion in net inflows during February, while outflows from Grayscale’s Bitcoin Trust notably decreased compared to the previous month.

The top 10 cryptocurrencies by market capitalization all experienced significant price gains in February, with Dogecoin (DOGE), Bitcoin (BTC), and Ethereum (ETH) leading the way with monthly gains of 46%, 45.5%, and 44.5%, respectively. The report notes that increased speculative appetite in bullish market conditions tends to benefit meme coins, as evidenced by the strong performance of other popular tokens such as Shiba Inu (SHIB), Bonk (BONK), Pepe (PEPE), and Wifi (WIF).

The decentralized finance (DeFi) sector also saw robust growth, with the total value locked (TVL) increasing by 50% throughout February. Ethereum, in particular, stood out among the top 10 chains by TVL, posting a 57% increase. DeFi derivatives volume reached a new monthly all-time high of $208 billion, a 62% increase from January, signaling a return of market speculation and the growth of DeFi derivatives infrastructure.

In the non-fungible token (NFT) market, trading volume remained relatively stable, with a modest 3.3% increase from January to $1.23 billion. The Pandora NFT collection, which utilizes the experimental ERC404 token standard, took the spotlight with $147 million in sales, the highest among all collections.

Looking ahead, the Binance Research team has summarized notable events and token unlocks for March 2024, encouraging users to stay informed about the latest developments in the blockchain space. These include the Arbitrum token airdrop, the Cosmos Interchain Security launch, and the Polygon zkEVM Mainnet launch.

As the crypto market continues to evolve and mature, reports like these from reputable sources such as Binance Research provide valuable insights for investors, traders, and enthusiasts alike. With spot Bitcoin ETFs driving significant inflows and the DeFi and NFT sectors showing strong growth, the outlook for the crypto market in 2024 appears promising.