Solana, one of the top proof-of-stake blockchains, has integrated Filecoin, a decentralized file-saving blockchain-based system, to make its block history accessible for third-party apps. According to Filecoin, this will allow Solana to achieve improved redundancy and scalability for part of its data set while leveraging a decentralized solution like Filecoin. Solana to Integrate Filecoin to […]
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The U.S. Energy Information Administration (EIA), a statistics agency of the U.S. Energy Department, has sent letters to cryptocurrency miners requiring data related to energy consumption and configuration of their mining sites. According to one of the letters posted on social media, miners have until February 23 to report the info regarding the activities carried […]
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The Office of the Privacy Commissioner for Personal Data (PCPD) in Hong Kong has initiated an investigation into Worldcoin over data privacy concerns related to its collection of biometric data, according to a Jan. 31 press release.
The PCPD said it executed court warrants to enter six Worldcoin premises on Jan. 31 in Yau Ma Tei, Kwun Tong, Wan Chai, Cyperport, Central, and Causeway Bay.
According to the PCPD, the investigation focuses on the potential misuse of personal data, particularly the biometric data collected by Worldcoin in exchange for cryptocurrency tokens. The regulator said there are significant risks in collecting such sensitive data, and there are concerns that Worldcoin is in “contravention” of regulatory requirements related to data collection and storage.
The PCPD’s action aims to determine whether Worldcoin data collection practices comply with the Personal Data (Privacy) Ordinance (PDPO). The operation involved the collection of documents and information from Worldcoin to review its data collection and processing methods.
The watchdog has advised the public to consider the necessity, purpose, and retention period of biometric data collection before participating in such activities. The regulator emphasized the sensitivity of biometric data, given its unique and unalterable nature.
The PDPO mandates that organizations collect personal data for lawful purposes and secure the data against unauthorized or accidental access and use. It also restricts using personal data for new purposes without explicit consent.
The PCPD also requested that the public submit any complaints and information regarding Worldcoin’s data practices.
The Worldcoin project is undergoing similar investigations in several countries due to privacy concerns over collecting biometric data, notably iris scans, for digital identity verification and cryptocurrency distribution.
The Bavarian State Office for Data Protection Supervision in Germany initiated its investigation in 2022, driven by concerns about the scale of sensitive biometric data processing. The probe focuses on the legality of Worldcoin’s practices under the EU’s strict data protection regulations, particularly scrutinizing issues of user consent and the clarity of information provided to users about their data usage.
Similarly, the Argentine Agency for Access to Public Information (AAIP) launched an investigation into the project after a surge in local interest. The AAIP is examining Worldcoin’s adherence to local data protection laws, specifically focusing on how the company safeguards the privacy of its users in Argentina. This includes reviewing the security measures Worldcoin employs to protect the collected biometric data.
Meanwhile, the Kenyan government has suspended Worldcoin’s operations in the country following an investigation deemed its activities to be “espionage.”The project has been working with the authorities to resolve the situation.
U.S. government-debt yields finished mostly higher on Friday after December inflation data reinforced the possibility of a soft landing for the economy.
The PCE price index, the Federal Reserve’s preferred inflation measure, rose a mild 0.2% in December. The core rate, which excludes food and energy, advanced by the same magnitude — in line with the expectations of economists polled by the Wall Street Journal.
Meanwhile, the annual rate of core inflation eased to 2.9% from 3.2%, marking the lowest level in almost three years and suggesting that the disinflation trend is continuing.
Interest-rate expectations were little changed after the inflation report. Fed-funds futures traders saw a 97.4% chance of no action by the Federal Reserve at its meeting next week, which would leave the main policy-rate target between 5.25%-5.5%, according to the CME FedWatch Tool. The chance of no action again by March was seen at 52.6%. Traders mostly expect five or six quarter-point rate cuts by December.
Other data released on Friday showed that pending home sales in December posted their biggest jump since June 2020. With Friday’s data now out of the way, traders have turned their attention to Monday’s release of financing estimates by the Treasury.
See: Wall Street is counting on Treasury’s borrowing needs to trend lower between now and June
“For a market that was looking for a ‘high’ +0.1%, the realized figures were very much in line,” said BMO Capital Markets strategist Ben Jeffery, referring to Friday’s PCE report for December.
“We don’t expect December’s data will materially shift March cut odds ahead of the weekend, and instead we’ll look for next week’s supply announcements, FOMC [Federal Open Market Committee] decision, and payrolls print to quickly take the market’s focus as the PCE print is digested,” he wrote in an email.
On a sure-to-be historic day for Bitcoin, I spent the morning looking back at historical data to see how impactful the first Gold ETF was at the time. We’ve seen plenty of analysts, including our own, talk about how Gold ETFs changed the landscape for the commodity, leading to outsized gains over the proceeding 20 years. Yet, what was it really like at the time? Did gold explode on day one, or did it take time? Let’s dig in.
First, let’s look at the timeline of the relevant exchange-traded products we will look at.
On Nov. 18, 2004, State Street Corporation launched SPDR Gold Shares (GLD), acquiring $114,920,000 in assets under management on launch and $1 billion in its first three trading days.
On Oct. 19, 2021, ProShares launched ProShares Bitcoin Strategy ETF (BITO), which had $570 million in inflows on day one, hitting $1 billion in assets the next day.
On Jan. 11, 2024, eleven spot Bitcoin ETFs will launch in the U.S. with $115.88 million under management via the sponsors’ seed funds. This means once they’ve taken $115 million in inflows, issuers like BlackRock, Ark, VanEck, and company will buy Bitcoin from the open market via Coinbase and Gemini, just like the rest of us.
Thus, before trading commences (removing Grayscale, which is converting its trust* into an ETF that already has $28.58 billion in AUM), the combined spot Bitcoin ETFs will have surpassed GLD’s day one trading. If we include Grayscale, spot Bitcoin ETFs have more assets under management than gold did for the first five years. GLD didn’t garner $29 billion in AUM until Feb. 12, 2009.
However, to be fair, it was no longer the only gold ETF by this point. BlackRock launched its iShares® COMEX® Gold Trust in 2005. Combined with GLD, gold ETFs reached an equivalent AUM around Feb. 10, 2009, with IAU obtaining $2 billion in assets by the end of Q1 2009.
By the end of 2009, three gold-backed ETFs were traded in the United States: ETFS Physical Swiss Gold Shares, SPDR Gold Shares, and iShares Comex Gold Trust.
| Company | Seed Investment ($M) |
|---|---|
| Bitwise | 20 |
| VanEck | 72.50 |
| Valkyrie | 0.52 |
| Franklin Templeton | 2.60 |
| WisdomTree | 4.95 |
| Invesco Galaxy | 4.85 |
| BlackRock | 10 |
| Ark | 0.46 |
| Grayscale | 2,858 |
The first gold ETF was launched in the U.S. on Nov. 18, 2004, and within 12 days, the price of gold was up just 2.82%.
This marked a sixteen-year high for gold, which had not reached $453 per ounce since May 1988. However, it was not at an all-time high. In fact, it would take another four years before that would occur.
Following the local high in Dec. 2004 at $453.40, gold went on a prolonged downward trajectory, with the price down 4% over the next six months. On its sixth-month birthday, GLD had acquired $2.4 billion in assets under management, with gold priced at $419.75.
However, things started to get much better for the flagship commodity. By Nov. 2004, on the anniversary of its launch, gold had risen to $485,85, up 8.15% since launch. Thus, gold was up less than Bitcoin after a year and could swing on a Gary Gensler tweet. Far from the earth-shattering impact many predict from the comparison to the gold ETF launch.
As GLD turned 2 on Nov. 18, 2006, gold was up to $620.50, an increase of around 40%.
Today, gold is priced at around $2,032 as of press time and a staggering 356%. However, that is on a nearly 20-year timeframe. By comparison, were Bitcoin priced at $210,000 on Jan. 11, 2044, how many investors would be happy with that return? Following gold’s trajectory, that’s the price point we’d be looking at.
However, gold and Bitcoin are like comparing apples with oranges. While we may discuss Bitcoin as digital gold, it is undoubtedly much more.
Let’s start by looking at gold in relation to the M2 money supply in the U.S. M2 is a broad measure of the money supply. It includes all components of M1 (notes and coins, checking accounts, other checkable deposits, traveler’s checks) plus savings deposits, small-denomination time deposits (time deposits in amounts of less than $100,000), and balances in retail money market funds.
M2 only excludes large deposits, institutional money market funds, short-term repurchase agreements, and other more considerable liquid assets, making it a relevant long-term metric to assess the spending power of the U.S. dollar.
When adjusted for the M2 supply, gold is up just 42%. Gold followed Gold/M2 pretty tightly from 2004 until 2012, and while the dollar price of gold continued to rise, Gold/M2 has been on a downtrend ever since.
As we can’t compare Bitcoin over the same period as it was not launched until 2009, and its price discovery was highly volatile during its early days, I’ve used 2015 – 2024 in the chart below to compare Gold/M2 to Bitcoin/M2.
As you can see, Bitcoin has performed significantly better than gold (7,082%) over the past decade, even accounting for the 70% increase in the number of dollars included in the M2 supply.
However, not only has Bitcoin shown to increase even against dollar dilution, but it also has a fixed supply and tight market dynamics. Only 30% of all Bitcoin in circulation has been traded within the past 12 months.
Bitcoin’s supply is capped at 21 million coins, making it fundamentally scarce. This scarcity is a crucial driver of its value, akin to precious metals like gold. However, Bitcoin’s supply is predictably finite, unlike gold, where new reserves can be discovered and mined. The introduction of the spot Bitcoin ETFs is likely to amplify the scarcity effect.
As more investors buy into the ETF, a portion of Bitcoin’s limited supply will be locked up to back these investment products, reducing the available supply for regular trading on open markets. This decreased supply could lead to price appreciation, especially in the face of increasing demand (often spurred by easier access through financial products like ETFs). There is also a cyclical effect here whereby ETF issuers must fill baskets of shares with Bitcoin from the open market.
Moreover, the fact that 70% of the current circulating supply of Bitcoin hasn’t moved in over a year indicates a robust holding behavior among current Bitcoin owners. This holding pattern reduces the effective circulation of Bitcoin, further enhancing its scarcity.
When long-term holders hold a significant portion of an asset, any increase in demand, such as that generated by the launch of a new investment vehicle like the spot Bitcoin ETFs, can have a disproportionate effect on the price. There’s less supply available to meet this new demand.
This behavior contrasts with gold, where holding patterns are more diverse and include significant industrial and jewelry use, which can dampen the scarcity-driven price appreciation seen in assets like Bitcoin.
Thus, while gold has seen exceedingly solid gains over the past 20 years, comparing its ETF-fueled growth to Bitcoin may, in reality, be exceedingly underwhelming.
It’s important to note that demand for Bitcoin in relation to its scarcity still has to correlate to its demand at the asking price. It’s unlikely that Bitcoin will have the same demand at $1 million per coin as it would at $1 per coin, for instance. In my view, this is where the rubber meets the road; at what price does the demand for Bitcoin change?
Yesterday, Bitcoin traded $52 billion across all exchanges at around $45,000 – $47,000.
Around 6.2 million BTC are in the market (they moved within the past 12 months). Glassnode estimates around 7.9 million coins have been lost or are unlikely to move any time soon. Given the current circulating supply of around 19.59 million, we can thus estimate a liquid pool of between 6.2 and 11.6 million coins available for purchase.
At today’s value, this equates to around $291 to $545 billion in liquid coins in the market, or around ten times the daily volume traded.
Thus, hypothetically, each of the 11 spot Bitcoin ETFs launching today would need to acquire around $49 billion in AUM to eat up the entire theoretical liquidity in the market.
As of Jan. 10, 2024, the top gold ETF, GLD, has an AUM of $56 billion. Assessing the overall top ETFs, SPY has $483 billion, and IVV has $396 billion.
The total value of assets under management for all gold ETFs in the U.S. is around $114 billion.
Thus, there is certainly room in the market for spot Bitcoin ETFs to acquire currently liquid coins, but it is still a tight market, and in less than 100 days, it will become even tighter.
When analysts compare the success of a spot gold launch 20 years ago with the potential for Bitcoin to follow suit, I think they may be drastically underestimating the differences between gold and ‘digital gold.’
Putting it into context, if BlackRock acquires the same AUM in Bitcoin as it has in gold (roughly $27 billion,) it would be 5% to 9% of all liquid Bitcoin on the market. Moreover, there are currently 2.35 million BTC on exchanges. So it would need to purchase 24% of exchange-listed Bitcoin… at current prices, that is.
Drawing on the parallels and contrasts between the historical impact of Gold ETFs and the potential influence of the upcoming spot Bitcoin ETFs, it becomes evident that while the success of Gold ETFs was significant, the unique attributes of Bitcoin, such as its fixed supply and prevailing holding patterns, could lead to an even more profound impact on the market, accentuating the potential for a transformative effect far beyond what was observed with gold.
Bit24.cash, an Iranian cryptocurrency exchange, denied claims that it exposed the personal information of its platform users due to a misconfigured storage system.
Earlier today, Cybernews researchers reported that a security flaw on the platform led to the unintended exposure of its users’ Know Your Customer (KYC) data, including IDs, passports, and credit card details, accessible to anyone due to misconfigured cloud storage containers.
The researchers warned that the leak exposes the platform users to threats of identity theft, phishing attempts, and fraudulent transactions.
Cybernews said the vulnerability has been addressed, with the storage now secured and inaccessible as of press time.
Bit24 is one of the leading crypto trading platforms in Iran. The Asian country is one of the few countries that has adopted a pro-crypto stance as part of efforts to circumvent the sanctions imposed against it by Western superpowers.
In an email response to Cybernews, Bit24 denied the occurrence of the vulnerability following an internal investigation.
Hossein Amini, a security engineer at Bit24, asserted that the mentioned misconfiguration is false and inconsistent with the platform’s system architecture and security protocols.
“The reference to a misconfigured MinIO instance granting access to S3 buckets containing KYC data is wholly untrue and does not align with our system architecture or security protocols. We can confirm that our MinIO setup and cloud storage containers remain secure, and there has been no unauthorized access to any sensitive user data,” Amini reportedly said.
Bit24 has yet to respond to CryptoSlate’s request for additional commentary as of press time.
Meanwhile, incidents of data breaches are prevalent in the crypto sector because regulated platforms gather personal data during registration. While these Know Your Customer protocols aim to curb illicit activities, safe storage remains a significant challenge.
Last year, CryptoSlate reported about several crypto entities, including Bitcoin-based payment platform Strike and bankruptcy claims agent Kroll, suffering breaches that revealed their users’ information.
On-chain data suggests the Dogecoin adoption has been picking up recently as a large number of new addresses are popping up on the network.
In a new post on X, analyst Ali talked about how the Dogecoin network activity has been looking like recently in terms of new address creation. A “new address” is one that has taken part in some kind of transaction activity for the first time.
Some of the new addresses that pop up on the network every day belong to the existing users, who may be creating additional addresses for privacy purposes or simply moving to a different wallet.
The rest of the new addresses, though, are being created by fresh investors entering into the market, so the daily total value of the new addresses can provide hints about how the adoption of the meme coin is coming along.
The below chart shows the trend in this metric for Dogecoin over the last couple of months:
The value of the metric appears to have seen some overall uptrend in the last few weeks | Source: @ali_charts on X
As displayed in the above graph, the daily number of new Dogecoin addresses started spiking last month and has since been consistently setting new highs as the metric continues in an overall upward trajectory. This would suggest that the network has been receiving a consistently high influx of new investors recently.
Adoption is always a constructive sign for any cryptocurrency, as fresh hands can help build a solid foundation that future uplifts in the price can sustainably grow off. Thus, it’s crucial for assets to continue to look attractive to new users, something that Dogecoin appears to have been doing fine recently.
Any positive effects on the price that come through adoption, though, generally only appear in the long term. Rather, depending on the nature of the adoption, it can in fact impart a negative influence on the cryptocurrency in the short-term.
This happens when too many new users join the blockchain in a short amount of time, only buying into the asset due to FOMO. Recently, the on-chain analytics firm Santiment also discussed this fast pace of address creation on the Dogecoin network, noting that Bitcoin (BTC) is also displaying a similar trend.
The trend in the addresses of the top assets in the sector | Source: Santiment on X
“Though network growth is a great sign long-term, this rapid rate of new wallets is a FOMO sign to be slightly cautious of,” explained the analytics firm in the post.
From the chart, it’s visible that Cardano (ADA) is the only asset among the top cryptocurrencies by market cap that’s not displaying any sort of address growth at all.
Since the rally Dogecoin observed during the starting third of the month, the asset has gone rather stale, as its price has continued to move sideways around the $0.093 level during the last two weeks.
DOGE hasn't enjoyed any upwards momentum in recent days | Source: DOGEUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net, IntoTheBlock.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
A study from two Europe-based nonprofits has found that Microsoft’s artificial intelligence (AI) Bing chatbot, now rebranded as Copilot, produces misleading results on election information and misquotes its sources.
The study was released by AI Forensics and AlgorithmWatch on Dec. 15 and found that Bing’s AI chatbot gave wrong answers 30% of the time to basic questions regarding political elections in Germany and Switzerland. Inaccurate answers were on candidate information, polls, scandals and voting.
It also produced inaccurate responses to questions about the 2024 presidential elections in the United States.
Bing’s AI chatbot was used in the study because it was one of the first AI chatbots to include sources in its answers, and the study said that the inaccuracies are not limited to Bing. They reportedly conducted preliminary tests on ChatGPT-4 and also found discrepancies.
The nonprofits clarified that the false information has not influenced the outcome of elections, though it could contribute to public confusion and misinformation.
“As generative AI becomes more widespread, this could affect one of the cornerstones of democracy: the access to reliable and transparent public information.”
Additionally, the study found that the safeguards built into the AI chatbot were “unevenly” distributed and caused it to provide evasive answers 40% of the time.
Related: Even the Pope has something to say about artificial intelligence
According to a Wall Street Journal report on the topic, Microsoft responded to the findings and said it plans to correct the issues before the U.S. 2024 presidential elections. A Microsoft spokesperson encouraged users to always check for accuracy in the information obtained from AI chatbots.
Earlier this year in October, senators in the U.S. proposed a bill that would reprimand creators of unauthorized AI replicas of actual humans — living or dead.
In November, Meta, the parent company of Facebook and Instagram, introduced a mandate that banned the usage of generative AI ad creation tools for political advertisers as a precaution for the upcoming elections.
Magazine: ‘AI has killed the industry’: EasyTranslate boss on adapting to change
After refusing to give comprehensive viewership data for years, Netflix finally released one metric this week.
Netflix’s
NFLX,
“What We Watched” report provides the number of hours people spent watching the platform’s top 18,000 TV shows and films from January 2023 to June 2023, and some industry experts think it’s enough from the famously private streamer to tell us something important about its business tactics.
“I think they’re looking to jump their ad-supported tier,” Bob Mitchell, founder of Mitchell Partnership Alliances and adjunct professor at the Kogod School of Business, told MarketWatch.
Why? Since it’s mostly TV shows topping the list of Netflix’s total hours streamed, Mitchell suggests that the company’s ad-supported tier — which launched last year for $6.99 a month and includes roughly four to five minutes of commercials per hour — could benefit because shows better lend themselves to advertisements.
“Advertisers want to reach viewers,” Mitchell said. And he explained that, “Series are more valuable for advertisers” because they can spread out ads across multiple episodes. Plus, sitting through ads before a TV show episode is seen as a better viewing experience compared to ad-breaks that interrupt feature-length films, because finding natural breaks in a movie is more difficult than placing an ad at the beginning of a shorter episode.
And it turns out, every title landing in the top 10 of Netflix’s most-hours-streamed list was a series or TV show.
Netflix
Experts suggest that TV shows have become a more dominant form of entertainment than movies, and Netflix’s viewership list proves that. Shows, even a limited series, give creators more time to fully tell a story, and they offer the on-demand flexibility for viewers to catch one episode when they have time, while also giving hardcore fans the ability to binge several episodes in one sitting.
Robert Thompson, the director of the Bleier Center for Television and Popular Culture at Syracuse University, told MarketWatch that consuming entertainment on screens from serial TV shows is “a more exciting form than a movie,” in part because a 10- or 12-episode series might be doling out an addictive story for 10 or 12 hours or more. “You can watch ‘Ginny and George’ for longer” than a two-hour movie, he said.
Netflix was one of the last big streamers to create an ad-supported subscription tier last year. And now, Netflix, Amazon Prime Video
AMZN,
Disney+
DIS,
Hulu, Max, Paramount+
PARA,
and Peacock all either have subscription tiers with advertisements, or they’ve announced plans to debut one soon.
Many of these streamers have only recently rolled out their ad plans, so it’s still too early to know for certain how successful they will be — but some platforms have already touted early wins. Disney announced that half of its new subscribers from March 2023 to September 2023 chose its $7.99 per month plan over its more expensive commercial-free plan, and Netflix announced during its October earnings that 30% of all new sign-ups in Q3 were for its ad model.
And the episodic nature of a series is a perfect fit for streamers’ ad models.
“There is a sense that these shorter series especially, the ones that are only 30-ish minutes, might be more amenable to ad interruptions,” Thompson said.
Netflix’s ad model reached 15 million total subscribers in November, something that could be a revenue boom for the company because of the membership margins.
Brandon Katz, an entertainment industry analyst for Parrot Analytics, told MarketWatch in October that Netflix actually has better profit margins on its cheapest plan, which includes ads.
“If they push people to the cheaper, ad-supported tier because of the ad dollars coming in, that also has a higher average revenue per user than their basic plan, so that again makes them more money,” Katz said.
See also: Netflix wants more of your money, but is the streaming industry getting too cocky?
Netflix revealed in its viewership report that “Success on Netflix comes in all shapes and sizes,” an admission that the hours viewed can only tell part of the story, and it doesn’t take into account factors like the completion rate (did people actually watch an entire movie or series, or drop out part of the way through?), the size of the production budget and how many marketing dollars were put behind the title.
Netflix did not respond to MarketWatch’s request for comment.
“Popularity doesn’t equal profitability,” Dan Rayburn, streaming analyst from NAB Show Streaming Summit, told MarketWatch. “That doesn’t tell us what percent of your users watch the show, it doesn’t tell us how many ads you delivered against what portion of that content … [just] this is popular, OK cool, that’s it.”
Even people who believe this TV show-centric report could be bullish for Netflix’s ad business long term agree that more numbers are needed to tell the full story.
It’s “barely the appetizer to a full meal,” Mitchell said.
Shares of Netflix Inc. were down 2.28% during Thursday afternoon trading, but are 61.5% higher over the last 12 months.
