From theblock by James Hunt
Quick Take
- El Salvador agreed to limit various bitcoin-related activities in exchange for a $1.4 billion IMF loan that aims to promote fiscal and external stability.
- Cathie Wood-led investment firm Ark Invest sold 13,780 Coinbase shares worth $3.9 million on Wednesday as it rebalanced its Fintech Innovation fund weightings amid a sharp drop in COIN’s price.
- Bitcoin’s market cap recently reached 14% of gold’s, marking a new all-time high in relative valuation, according to data from Galaxy Research.
- The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.
El Salvador agrees to limit bitcoin activities in $1.4 billion IMF deal
El Salvador agreed to limit various bitcoin-related activities in exchange for a $1.4 billion IMF loan that aims to promote fiscal and external stability.
- Specific requirements of the deal include limiting the public sector's bitcoin purchases, ensuring taxes are paid in U.S. dollars and the wind-down of the government-provided bitcoin wallet Chivo.
- With additional financial support expected from the World Bank, the Inter-American Development Bank and other regional development banks, the total financing package is expected to be worth over $3.5 billion, the IMF said.
- In June 2021, El Salvador became the first country to formally adopt bitcoin as a legal tender, as proposed by its President Nayib Bukele, in order to promote financial inclusion.
- El Salvador will now make private-sector bitcoin adoption voluntary, deviating from its 2021 Bitcoin Law mandating acceptance.
- However, the deal awaits final IMF board approval, contingent on El Salvador implementing agreed fiscal and regulatory reforms.
Ark Invest offloads Coinbase shares amid a 10% price slump
Cathie Wood-led investment firm Ark Invest sold 13,780 Coinbase shares worth $3.9 million on Wednesday as it rebalanced its Fintech Innovation fund weightings amid a sharp drop in COIN's price.
- Coinbase's stock price fell 10.2% to close at $279.86 on Wednesday after Fed Chair Jerome Powell's hawkish speech cut the 2025 rate reduction outlook, rattling markets.
- Ark Invest's ARKF maintains a 9.9% Coinbase weighting, making it the fund's second-largest holding behind Spotify, with a market value of around $110 million.
- Coinbase is currently valued at $52.1 billion, according to The Block's data dashboard.
Bitcoin's market cap recently reached 14% of gold's, marking a new all-time high in relative valuation, according to data from Galaxy Research.
- Additionally, combined Bitcoin ETFs in the U.S. now hold $129 billion in assets under management, surpassing the AUM of U.S. gold ETFs, which hold $128 billion and had a 20-year head start, K33 Head of Research Vetle Lunde noted.
- Meanwhile, bitcoin's market cap of $2 trillion ranks it seventh among global assets, ahead of Saudi Aramco and silver, just behind Alphabet (Google).
- The broader cryptocurrency market cap stands at around $3.8 trillion, with bitcoin maintaining dominance at 54%.
Hong Kong accelerates crypto exchange licensing with four new approvals
Hong Kong approved licenses for four more crypto exchanges on Wednesday — HKbitEX, Accumulus, DFX Labs and EX.IO — under its "swift licensing process."
- The Securities and Futures Commission expedited licenses by closely engaging with applicants' management and conducting on-site inspections.
- Hong Kong's crypto licensing regime, launched in June 2023, allows licensed exchanges to provide retail trading services as part of its push to become a crypto hub.
- The SFC has previously issued three such licenses to OSL, HashKey and HKVAX.
The Open Platform launches TON Space self-custodial wallet
TON blockchain venture capital firm and venture builder The Open Platform (TOP) has officially launched TON Space, a self-custodial wallet that claims to have already been used by over 100 million Telegram users during its now-concluded beta phase.
- Following the launch, both TON Space and the custodial Wallet platform on Telegram are presented in the same user interface, allowing users to toggle between the two custody options.
- The wallet also plans to introduce new features, including a dapp catalog, DEX integration and staking solutions designed to support TON blockchain developers and increase the discoverability of their applications.
In the next 24 hours
- U.S. PCE numbers are released at 8:30 a.m. ET on Friday.
- FOMC member Mary Daly is scheduled to speak at 7:30 a.m.
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