Weekly Newsletter[Block#834,188]
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A. Bitcoin Ecosystem
1. Bitcoin hits all-time high
2. Stanford’s Blyth Fund allocates 7% of its portfolio to bitcoin
3. MicroStrategy announces private offering of $700 million of convertible senior notes
4. BlackRock wants to buy spot Bitcoin ETFs for global allocation fund
B. Regulation
1. Arizona’s Senate mulls proposal to add Bitcoin ETFs to retirement portfolios
2. The U.K. economic crime legislation will include civil recovery orders for confiscating crypto assets
C. Macroeconomy
1. US consumer spending slides while inflation in services is too high
2. Domestic liquidity has been flat lately based on most indicators
D. Bitcoin Tech Development
1. PSBTs for multiple concurrent MuSig2 signing sessions
2. Notable code and documentation changes
A. Bitcoin Ecosystem
1. Bitcoin hits all-time high
Bitcoin has surged surpassing its previous all-time highs and set a new record of above $70,000 with a market capitalization of nearly $1.37 trillion. The Bitcoin price hits its new record after a period of two years and the rise can be attributed to the market’s booming interest in Spot Bitcoin ETFs. According to the Farside Investors data, Bitcoin ETFs daily inflow has soared to an excellent level of $6.7 billion since the Securities and Exchange Commission gave them an approval at the beginning of the year. These Bitcoin ETFs, on average, are clocking a daily inflow of nearly $210 million. In the last few months, the price surge has been triggered by allocation by institutional players and increased retail participation owing to Spot Bitcoin ETFs and the upcoming Bitcoin Halving event.
Reference:
https://www.coindesk.com/price/bitcoin/
https://www.forbes.com/advisor/in/investing/cryptocurrency/bitcoin-hits-69000-new-all-time-high/
2. Stanford’s Blyth Fund allocates 7% of its portfolio to bitcoin
On March 5, computer science major and leader at the Stanford Blockchain Club Kole Lee announced that the university’s student-run Blyth Fund allocated around 7% of the portfolio to bitcoin following his pitch to the fund in February. The fund “has bought bitcoin at $45,000,” he said before adding that he pitched BlackRock’s IBIT exchange-traded fund (ETF) to the Blyth Fund. His arguments, “which tried to remain as objectively bullish as possible while catering to an audience of skeptics,” revolved around three key factors: ETF inflows, crypto market cycles and a hedge against “monetary chaos and war,” he said. The student-led fund, established in 1978 in honor of legendary banker Charles Blyth, manages a six-figure portion of Stanford’s Expendable Funds Pool by investing in stocks, bonds and other assets, which now include bitcoin.
Reference:
https://cointelegraph.com/news/stanford-university-blyth-fund-allocates-7-percent-portfolio-bitcoin
3. MicroStrategy announces private offering of $700 million of convertible senior notes
MicroStrategy Incorporated (Nasdaq: MSTR) originally announced on March 4th that it intends to offer, subject to market conditions and other factors, $600 million aggregate principal amount of convertible senior notes due 2030 (the “notes”) in a private offering to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The company then upsize its principle amount to $700 million aggregate principal amount of 0.625% convertible senior notes on March 6th. MicroStrategy also expects to grant to the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $100 million aggregate principal amount of the notes. The offering is closed on March 8, 2024. MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes.
Reference:
https://www.microstrategy.com/press/microstrategy-announces-proposed-private-offering-of-600-million-of-convertible-senior-notes_03-04-2024
https://www.streetinsider.com/Corporate+News/Microstrategy+%28MSTR%29+Announces+Proposed+Private+Offering+of+%24600+Million+of+Convertible+Senior+Notes/22878127.html
4. BlackRock wants to buy spot Bitcoin ETFs for global allocation fund
BlackRock, one of the largest asset managers in the world, is planning to buy spot bitcoin exchange-traded funds (ETFs) for its Global Allocation Fund (MALOX). According to a March 7 update to the filing with the United States Securities and Exchange Commission Launched in 1989, the BlackRock Global Allocation Fund seeks to provide investment return through a fully managed investment policy utilizing U.S. and foreign equity, debt and money market securities, including companies like Microsoft, Apple and others. As of March 7, MALOX had $17.8 billion in assets under management.
Reference:
https://cointelegraph.com/news/blackrock-buy-spot-bitcoin-etf-global-allocation-fund
B. Regulation
1. Arizona’s Senate mulls proposal to add Bitcoin ETFs to retirement portfolios
The Arizona State Senate is considering a proposal to encourage the inclusion of Bitcoin exchange-traded funds (ETFs) in two of the state’s retirement portfolios. The resolution is currently being reviewed by the House for a second time after it passed the Senate’s Third Reading in a 16–13 vote on Feb. 22, records show. If passed, the proposal would encourage the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to consider adding exposure to Bitcoin ETFs in their respective portfolios, according to state records.
Reference:
https://cointelegraph.com/news/arizona-senate-consider-bitcoin-etfs-retirement-portfolios
2. The U.K. economic crime legislation will include civil recovery orders for confiscating crypto assets
The United Kingdom government recently released statutory instrument documentation stating that U.K. law enforcement authorities will be able to freeze crypto assets used in crime without requiring a conviction from the end of April. Published on Feb. 29, the document outlines the amendments made to the Economic Crime and Corporate Transparency Act 2023, which expands the power of the National Crime Agency to confiscate and seize crypto assets the agency suspects are linked to suspicious illicit activities, without needing to go through extensive legal procedures. Additionally, authorities will be able to retrieve crypto assets directly from exchanges and custodian wallet providers.
Reference:
https://cointelegraph.com/news/uk-government-seize-crypto-economic-crime-corporate-transparency-act
C. Macroeconomy
1. US consumer spending slides while inflation in services is too high
In January, real (inflation-adjusted) disposable income (income after taxes) was unchanged from the previous month. Real consumer spending fell 0.1% from December to January. The personal savings rate increased from 3.7% in December to 3.8% in January. The real decline in spending included a 2.1% drop in spending on durable goods, a 0.5% drop in spending on non-durable goods, and a 0.4% increase in spending on services. On the one hand, the year-over-year increase in prices continues to decelerate. On the other hand, monthly price gains accelerated, especially for services–which are labor-intensive. In other words, the tightness of the labor market, and the consequent rise in labor costs, is contributing to sustained high inflation for services. This, in turn, is preventing inflation from decelerating toward the 2% target. For the Federal Reserve, this implies a need to sustain a tight monetary policy to weaken the labor market and thereby ease wage pressure.
Reference:
https://www2.deloitte.com/us/en/insights/economy/global-economic-outlook/weekly-update.html
2. Domestic liquidity has been flat lately based on most indicators
The Federal Reserve keeps reducing their balance sheet, which is negative for liquidity, but the Treasury General Account has been flat, and the reverse repo facility has been declining, which is positive for liquidity. However, the rate of decline for the reverse repo facility has slowed down, which has contributed to the lack of domestic liquidity growth lately.
D. Bitcoin Tech Development
1. PSBTs for multiple concurrent MuSig2 signing sessions
Salvatore Ingala posted to Delving Bitcoin about minimizing the amount of state needed to perform multiple MuSig2 signing sessions in parallel. Using the signing algorithm described in BIP327, a group of co-signers will need to temporarily store a linearly increasing amount of data for each additional input they want to add to a transaction they create. With many hardware signing devices limited in the amount of storage they have available, it would be very useful to minimize the amount of state required (without reducing security). Ingala proposes generating a single state object for an entire PSBT and then deterministically deriving the per-input state from it in a way that still makes the result indistinguishable from random. That way the amount of state a signer needs to store is constant no matter how many inputs a transaction has.
2. Notable code and documentation changes
Bitcoin Core #29412 adds code that checks for every known way to take a valid block, mutate it, and produce an alternative block that is invalid but has the same block header hash. Mutated blocks have caused multiple vulnerabilities in the past. In 2012, and again in 2017, Bitcoin Core’s cached rejection of invalid blocks meant that an attacker could take a new valid block, mutate it into an invalid block, and submit it to a victim’s node; that node would reject it as invalid and would not later accept the valid form of the block (until the node was next restarted), forking it off the best block chain and allowing the attacker to perform a type of eclipse attack; see Newsletter #37 for details. More recently, when Bitcoin Core would request a block from one peer, a different peer could send a mutated block that would lead Bitcoin Core to stop waiting for the block from the first peer.
