PDAXScope: Grayscale eliminates double-digit discount

(February 5) Check out other fresh news in the crypto world in today’s issue of the PDAXScope. 📰

• Grayscale eliminates double-digit discount

The Grayscale Bitcoin Trust (GBTC) has successfully transformed into an exchange-traded fund (ETF), ending the fund's discount and closing a chapter on a volatile arbitrage trade. Valued at approximately USD 21 billion, GBTC achieved a milestone with a 0.02% premium to its net asset value on Thursday, according to Bloomberg. The conversion addressed the challenges posed by GBTC's previous structure, which led to significant premiums and double-digit discounts, impacting popular arbitrage strategies involving Bitcoin borrowing and exchange for GBTC shares. This transformation marked the conclusion of an era marked by unpredictable swings in premiums and discounts, driven by changing dynamics in the cryptocurrency market, including the introduction of physically-backed Bitcoin ETFs in Canada in early 2021, which affected the viability of the arbitrage trade and contributed to broader challenges in the crypto investment landscape.

• Three suspects charged over USD 400M FTX scam

Three individuals are now charged with orchestrating a SIM-swapping scam that led to the misappropriation of over USD 400 million from FTX, prompting the cryptocurrency exchange to declare bankruptcy. Following FTX's bankruptcy filing in November 2022 and the resignation of its founder, Sam Bankman-Fried, hackers swiftly drained significant amounts of digital currency from the platform. The stolen funds were then channeled through a complex network of decentralized exchanges. Despite facing potential decades in prison after a fraud conviction last year, Bankman-Fried distanced himself from the hack, speculating that it could have been an inside job. These events highlight the susceptibility of cryptocurrency exchanges to sophisticated scams, and the charges against the individuals underscore the intricate tactics used to exploit security vulnerabilities, underscoring the ongoing challenges in safeguarding digital assets from malicious actors in the cryptocurrency industry.

• Federal reserve chair: Fed may wait beyond March for interest rates cut

Federal Reserve Chair Jerome Powell suggested a potential delay in interest rate cuts beyond March as he elucidated the central bank's rationale in a public interview with CBS' 60 Minutes. Emphasizing the need for additional economic data to ensure a sustainable path toward the Fed's 2% inflation target, Powell exercised caution against premature action, noting that positive economic readings over the past six months may not accurately reflect the true trajectory of inflation. In the discussion with CBS's Scott Pelley, Powell recognized the risks associated with moving too soon, highlighting the importance of completing the economic recovery and underscoring that premature actions may not align with the actual direction of inflation.

• China pledges to stabilize market, but leaves no specific plan

After a tumultuous trading session that led Chinese shares to a five-year low, China has pledged to stabilize the markets, although specific measures were not outlined. The China Securities Regulatory Commission (CSRC) affirmed its commitment to preventing abnormal fluctuations, expressing intentions to guide more medium- and long-term funds into the market while cracking down on illegal activities like malicious short selling and insider trading. Prompted by a sudden 3.4% plunge in the benchmark CSI 300 on Friday, this response comes just days before the Chinese New Year celebrations, eliciting concerns and frustration among individual investors. As China grapples with a market sell-off wiping out over $6 trillion in value, efforts to restore confidence focus on stabilizing the markets, particularly by guiding long-term funds and addressing illicit activities. The lack of specific details leaves investors eagerly awaiting further clarity on the implemented measures.

• Jobless rate may spike to 6.3% for 2024

BMI Country Risk & Industry Research indicates a potential rise in the Philippines' unemployment rate to 6.3% in the current year, impacting consumer spending in 2024. Despite reaching a record-low jobless rate of 3.6% in November 2023, a decline from 4.2% in October and the previous year, the report foresees a potential increase in unemployment, posing challenges to the country's economic landscape. Recent data from the local statistics agency showed a positive trend, with a decrease in the number of unemployed Filipinos by 12.3% in November compared to October and by 15.8% compared to November 2022. However, the report underscores the need for vigilance as the projected rise in the unemployment rate could impact consumer spending patterns in the upcoming year, raising concerns despite exceeding the 5.3%-6.4% target set under the Philippine Development Plan for the first 11 months of 2023.

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