From theblock by James Hunt
Quick Take
- FTX co-founder Gary Wang avoided prison time at a sentencing hearing on Wednesday, according to Inner City Press and Reuters.
- BlackRock’s IBIT spot Bitcoin ETF achieved nearly $1.9 billion in notional exposure during its first day of options trading on Tuesday.
- Bernstein analysts named Robinhood the top “crypto deregulation trade,” following Donald Trump’s election win this month, raising their HOOD share price target to $51 — around 45% upside potential.
- The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.
FTX co-founder Gary Wang avoids prison time
FTX co-founder Gary Wang avoided prison time at a sentencing hearing on Wednesday, according to Inner City Press and Reuters.
- Prosecutors praised Wang as the "easiest cooperator" they had worked with, emphasizing his critical role in providing evidence during former FTX CEO Sam Bankman-Fried's trial.
- Judge Lewis Kaplan also acknowledged Wang's cooperation, stating he had "never seen something like what happened here" and that Wang did the "right thing."
- Wang pleaded guilty to fraud-related charges in December 2022, a month after FTX collapsed. The exchange subsequently filed for bankruptcy following a liquidity crisis, and its sister trading firm, Alameda Research, also fell.
- Wang testified about Alameda Research's special privileges on FTX, which Bankman-Fried had secretly implemented despite his objections.
- Sam Bankman-Fried received a nearly 25-year prison sentence for fraud, while former co-CEO of FTX Digital Markets Ryan Salame began a seven-and-a-half-year sentence last month.
- However, former Alameda CEO Caroline Ellison was handed a lighter sentence of two years and FTX's former engineering director Nishad Singh also received no prison time after the pair cooperated with authorities.
- Wang and Bankman-Fried shared a long history, meeting at a high school math camp, maintaining their friendship during college at MIT and later founding Alameda Research and FTX together.
BlackRock Bitcoin ETF sees unprecedented options trading on first day
BlackRock's IBIT spot Bitcoin ETF achieved nearly $1.9 billion in notional exposure during its first day of options trading on Tuesday.
- A call-to-put ratio of 4.4:1 "almost certainly" contributed to the foremost cryptocurrency's push to another all-time high, according to Bloomberg ETF analyst James Seyffart.
- "$1.9 billion is unheard of for day one," fellow Bloomberg ETF analyst Eric Balchunas said. "For context, [first day options trading on ProShares' Bitcoin futures ETF] BITO did $363 million and that's been around for four years."
- Market structure expert Dennis Dick expects bitcoin's volatility to decrease as growing interest in ETF options trading boosts liquidity and market depth.
- While IBIT was the first to be approved, options on Bitcoin ETFs from Bitwise and Grayscale are also set to launch on Wednesday.
Bernstein names Robinhood as top 'crypto deregulation trade' post-Trump win
Bernstein analysts named Robinhood the top "crypto deregulation trade," following Donald Trump's election win this month, raising their HOOD share price target to $51 — around 45% upside potential.
- Trump and the Republican party proposed various pro-crypto policies during the campaign, including establishing a national bitcoin stockpile and promising to "end the war on crypto regulation," which are now anticipated to benefit the industry post-inauguration.
- The analysts expect the firm's crypto revenue to grow by 20%, reaching 38% of total revenues by 2025, driven by new potential token listings to compete with Coinbase.
- Previously constrained under Gary Gensler's hawkish SEC, Robinhood could further benefit from a pro-crypto regulatory shift, enabling additional services like staking, stablecoin access and lending in the U.S., the analysts said.
- Further expansion into Europe via its proposed $200 million acquisition of the crypto exchange Bitstamp is another potential catalyst.
MicroStrategy upsizes convertible note offering to $2.6 billion to buy more bitcoin
MicroStrategy upsized its latest convertible senior note offering from $1.75 billion to $2.6 billion, intending to use the net proceeds from the sale to "acquire additional bitcoin and for general corporate purposes."
- The convertible notes offer MicroStrategy flexibility to manage its debt while leveraging equity growth, aligning with its playbook of using debt and equity to expand its bitcoin holdings since 2020.
- On Monday, the company announced it had acquired another 51,780 BTC for $4.6 billion between Nov. 11 and Nov. 17, bringing its total holdings to 331,200 BTC, worth more than $30 billion.
- MicroStrategy's latest set of acquisitions was its largest in dollar terms, funded through the sale of nearly 13.6 million shares as part of its broader $42 billion capital raise plans for future bitcoin purchases.
China ousts former digital currency chief over alleged corruption involving crypto
The Chinese Communist Party has expelled Yao Qian, a former influential figure in China's blockchain industry and ex-head of the central bank's digital currency institute, for alleged corruption involving crypto.
- Chinese authorities accused Yao of abusing his position and regulatory power, brokering power-for-money deals using cryptocurrency.
- Yao was found to have illegally accepted an "extraordinarily large amount" of funds and assets, the authorities said, without disclosing the sum.
- Yao's alleged criminal activities have been referred for further review and potential prosecution.
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