Grayscale Reveals 0.15% Fees For Its Bitcoin Mini Trust ETF

  • Grayscale’s new ETF product, the Bitcoin Mini Trust has set fees at 0.15%
  • Grayscale said it will contribute around 10% of GBTC assets to the Mini Fund, some 63,204 bitcoin.
  • Bitcoin Ecosystem Developments in 2023 as BTC Hits Fresh 2023 High
  • Bitcoin Extends Rally as $1B in BTC Withdrawals Suggests Bullish Mood

    Bitcoin Extends Rally as $1B in BTC Withdrawals Suggests Bullish Mood
  • Why Financial Advisors Are So Excited About a Spot Bitcoin ETF

    Why Financial Advisors Are So Excited About a Spot Bitcoin ETF
  • When Could Traders See the Arrival of a Spot Bitcoin ETF?

    When Could Traders See the Arrival of a Spot Bitcoin ETF?

Bitcoin ETF provider Grayscale has provided some details of its spin-off fund, the Bitcoin Mini Trust (BTC), including a more competitive 0.15% fee than the uplisted mothership GBTC product, according to a pro forma financials in its latest filing.

The filing also provides an illustrative example of the amount of Bitcoin (BTC) Grayscale will contribute to the mini fund: 63,204 bitcoin, or 10% of existing assets in GBTC, as per the filing. Shares of the BTC trust are to be issued and distributed automatically to holders of GBTC shares. (Pro forma financial statements are projections of future expenses and revenues, based on a company’s past experience and future plans.)

Grayscale’s Bitcoin Mini Trust was conceived to offer GBTC investors a lower fee option that’s more competitively in line with other bitcoin ETFs approved back in January.

This spinoff is also considered a non-taxable event for GBTC’s existing shareholders, so those investors will not be expected to pay capital-gains tax to automatically transfer into the new fund. Some early stage GBTC investors with gains in the thousands of percentages would face a significant taxable event to switch to a competitor product with a lower fee.

Grayscale’s GBTC, which charges a relatively high fee of 1.5%, appeared over a decade ago originally offered through a private placement. In mid-2015, shares began trading publicly on an over-the-counter basis. This continued until January 2024 when GBTC uplisted to NYSE Arca as a spot Bitcoin ETF.

Grayscale’s current assets under management stands at around $19.6 billion; its nearest rival, which is BlackRock’s IBIT fund, has grown to just over $17.5 billion.

Edited by Nikhilesh De.

Runes Protocol Launches on Bitcoin, Sending Fees Soaring as Users Rush to Mint Tokens

Despite this being the most anticipated Bitcoin halving yet (at least according to Google search history), it was the launch of the high-profile Bitcoin builder Casey Rodamor’s latest creation – Runes – that turned heads, even among long-time blockchain developers who despise the digital tokens that can be minted on the platform.

Rodamor is known for the release of Ordinals, a protocol that allows people to “inscribe” data on the smallest units of bitcoin (i.e. satoshis) to create highly valued assets on Bitcoin. Ordinals is largely credited for inspiring a renewed developer ecosystem on Bitcoin.

Runes is similar to Ordinals, in that it allows people to “etch” and mint tokens on-chain – the main difference is that ordinals are “non-fungible” (i.e. one-of-a-kind) while Runes will function more like meme coins, which have recently taken crypto markets by storm.

The first Runes project to mint was Rodamor’s own UNCOMMON•GOODS project, which was announced well in advance of the halving, as were many of the projects looking to etch themselves on these highly coveted satoshis.

Impossible to know in advance, however, is what other projects would be able to find space on these scarce satoshis. There are already quite literally hundreds of Runes projects that are currently being minted and looking for prospective buyers.

About nine blocks after the halving, Runes minters had already paid 78.6 BTC in fees (~$4.95 million) in order to buy the rarest of the rare. This suggests that, like Ordinals, the Runes protocol could be a boon to Bitcoin’s burgeoning fee economy.

What makes a Runes project potentially viable is something of a subjective measure: being an early project to list — like DOG•GO•TO•THE•MOON, which has the honor of being “Rune Number 3” — is one measure. But buyers are also judging projects based on the “quality” of its ticker.

A number of Runes projects were already starting to mint before the halving happened, including DOG•DOG•DOG•DOG•DOG, MEME•ECONOMICS, SHORT•THE•WORLD and PEPE•WIT•HONKERS, including dozens others, according to runebtc.xyz.

Prior to the halving block being mined, prospective buyers in an X Space hosted by Leonidas, a well-regarded Ordinals collector, users and speculators alike were discussing which Runes to mint and trading ticker names.

Among the names dropped were Taproot Wizards, the Ordinals project co-created by Bitcoin OG influencers Eric Wall and Udi Wertheimer, and a project called Satoshi Nakamoto, named after Bitcoin’s creator, which at press time had over 5,000 holders who minted about 19,000 tokens.

Which projects will actually prove to have long term value is hard to judge.

“Yeah, I don’t see any good memes, like, I mean, I’m just trying to figure it out,” one trader said. “To be quite frank, I haven’t minted anything yet.”

“I’m trying to understand the space in general right now,” someone else responded. “These projects are like early Runes. Do you guys think that these are actually going to be the most valuable ones?”

“I think it depends what happens with them,” someone responded.

Another aspect to consider: how many of the tokens were “pre-mined,” or held in reserve for project creators to potentially release on the market later. Prior to the halving, Leonidas shared guidelines that suggested projects that pre-mine more than 10% of the token supply were “greedy.”

“I think the pre-mines are going to be the ones that win,” one trader said. “Because like, it’s so hard to come up with a good meme with a 13 character limit,” he said, referring to the hardcoded naming system Rodamor added to Runes to try to prevent “ticker squatters.”

In time, Runes tickers will be able to list with shorter names. Within three years, there could be Runes projects with three-letter tickers, for instance.

Though it’s unclear how well this strategy will play out. According to data source Ordiscan, one forethinking developer has already blocked off a series of tickers, including ZZZZ (which will be the “first four letter Rune” to mint in two years), ZZ and Z (the first two letter and one letter Runes to mint in three years) and A (the last single character Rune to mint in four years).

In other words, with something so new, it’s hard to determine what to value.

“As everybody is scrambling to figure out what the hell’s going on, I want to just take a moment to say it’s awesome being here with all of you,” Leonidas told his audience. “This is essentially the start of a new protocol that kicked off about 30 minutes ago. So let’s see what happens. I think it’s going to be very chaotic.”

Edited by Bradley Keoun.

Bitcoin Rally Holds Around $63,700 Following 4th Block Reward Halving

Bitcoin (BTC) held steady around $63,700 in the aftermath of the cryptocurrency’s fourth halving, an event that upends the economics for the miners who power the Bitcoin ecosystem.

BTC recently barely moved from its level right before the 840,000th Bitcoin block was mined just as Saturday began in UTC time. Bitcoin had slumped as low as $59,685 on Friday before rebounding above $65,000.

The halving has historically been a precursor to a rally in the price of bitcoin, with the last one, in May 2020, giving way to a run up from $9,500 to $65,000 during the subsequent year.

But this time, bitcoin has already embarked on a momentous rally to record highs, rising from $15,500 in late 2022 to $73,680, helped by optimism around the approval of spot bitcoin ETFs in the U.S. and then then the ensuing enthusiasm after they began trading in January.

On Thursday, JPMorgan said that it expected bitcoin to drop following the halving as it remained in “overbought conditions” based on the high level of open interest in bitcoin futures. Goldman Sachs added that in order for bitcoin to emulate the success of previous cycles following halving events, macro conditions need to be supportive of risk-taking.

Bitcoin has traded between $59,600 and $73,860 since Feb. 28 with the upside of the range being protected this week alongside the backdrop of rising conflict in Israel, which has had a knock-on effect across all capital markets.

A sell-off on April 12 from $71,000 to $60,000 wiped out $4 billion in open interest from the bitcoin market, according to Coinalyze. The figure across all exchanges excluding CME is $16.1 billion.

Edited by Nick Baker.

Bitcoin Blockchain Undergoes Fourth Halving in 15-Year History, in Show of Monetary Policy Set by Code

  • The quadrennial event is seen as a momentous occasion in the crypto community.
  • Various factors may make this halving an event like no other in Bitcoin’s history.

Soccer has the World Cup. Athletics and many other sports have the Olympics. Crypto has the Bitcoin halving.

The once-every-four-years bitcoin (BTC) reward halving took place at 00:09 UTC on Saturday, when the 840,000th block was added to the Bitcoin blockchain.

The halving, which cuts the reward bitcoin miners receive for adding new blocks by 50%, occurs every 210,000 blocks – in accordance with the original programming when the blockchain’s elusive creator, Satoshi Nakamoto, launched it 2009.

This halving was the fourth in Bitcoin’s history, with the reward dropping to 3.125 BTC. The bitcoin price was holding around $63,700 after the halving.

The Runes protocol for fungible tokens, from Casey Rodarmor, the developer behind the Ordinals platform that launched last year to enable NFTs on Bitcoin, also launched at block 840,000.

A quick glance at the mining fees paid by users to get transactions included in the block might reflect the intense competition by users to mint the new runes: $2.4 million in fees, versus $40,000 to $60,000 for a more typical block. Several of the ensuing blocks also came with more than $1 million of fees.

“We’ve not had anything like this in the history of Bitcoin,” the prominent Bitcoin developer Jimmy Song said during a livestreamed watch party hosted by Tone Vays. “We’re stressing the network in a different way, in ways we’ve never stressed it before.”

For CoinDesk’s complete coverage, please see our Bitcoin Halving landing page.

The mining reward is an incentive for entities who contribute computing power to secure Bitcoin. The miner that wins the race to add each new block to the network takes away the mining reward, the amount of which is fixed until it’s cut again at the next halving, as programmed by the cryptocurrency’s elusive creator, Satoshi Nakamoto.

The quadrennial event is seen as a momentous occasion in the crypto community because it symbolizes bitcoin’s original concept as an autonomous, decentralized financial network whose monetary policy is set by code, as opposed to human organizations like governments and central bankers.

Unlike traditional, or fiat, currencies, whose value has historically been eroded by inflation and government printing, bitcoin is designed to be non-inflationary with a maximum total supply of 21 million BTC in circulation. With the halvings every four years, the pace of new issuance of bitcoins reduces over time until the last one is mined, likely sometime in 2140.

Historically, halvings have been followed by surges in bitcoin’s price. The thinking is that the fewer new BTC are being produced, the more valuable those already in existence become. This time, the outlook is murky. Some market commentators say the halving is already priced into BTC and, therefore, the immediate effects may be muted. Others see the bitcoin price falling, while yet others have suggested a rally is in store.

The potential effects of this present halving may be impossible to predict due to the profound differences in the Bitcoin landscape compared with the three previous events. Notably, January’s long-awaited approval of spot bitcoin exchange-traded funds (ETFs) in the U.S. means greater institutional investment is coming to BTC by orders of magnitude.

Also, following the launch of the Ordinals protocol early last year, there is now much greater activity going on under the hood of Bitcoin, with developments and upgrades to the network potentially bringing far more utility to the notoriously conservative ecosystem.

Edited by Sheldon Reback.

Indian Man Pleads Guilty to Creating Spoofed Coinbase Website, Stealing $9.5M in Crypto

An Indian citizen pleaded guilty this week to U.S. charges that he created a fake version of Coinbase’s website, letting him steal login credentials on the real thing and plunder more than $9.5 million of cryptocurrency from hundreds of victims.

Chirag Tomar, 30, was arrested at the Atlanta airport on Dec. 20, 2023, while visiting family on a travel visa. He was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Both carry a maximum sentence of 20 years in prison.

Tomar’s case was first flagged by Seamus Hughes of CourtWatch.

According to court documents filed in the Western District of North Carolina, Tomar and his co-conspirators created a fake version of Coinbase Pro’s website to fool Coinbase customers to fork over their login info. Between at least June 2021 and Tomar’s arrest in late 2023, at least 542 victims were scammed out of their crypto.

Court documents show that the U.S. Secret Service was able to identify Tomar as a member of the crime ring because he used an email account in his real name to communicate with known and unknown co-conspirators in the fraud. He also kept a spreadsheet of his victims and how much had been stolen from each and sent “stolen or fraudulently obtained” identity documents to other email addresses used to open up accounts at Binance, another cryptocurrency exchange.

Between June 2021 and October 2022, Tomar made internet searches for “fake coinbase page,” “coinbase scam,” “scams in the USA,” and “how to take money from coinbase without OTP.”

Tomar used the same email address to apply for his travel visa to the U.S.

Using the proceeds of his fraud, Tomar funded a lavish lifestyle, purchasing Rolex and Audemars Piguet watches, “high-end luxury vehicles such as Lamborghinis and Porches,” and traveling to London, Dubai and Thailand.

Tomar has not yet been sentenced.

Edited by Nick Baker.

Bitcoin Pioneer Hal Finney Posthumously Wins New Award Named for Him

The Human Rights Foundation has announced that computer scientist and privacy advocate Hal Finney, who played a role in getting Bitcoin going 15 years ago, will posthumously be the first recipient of an award named in his honor.

This roundup is part of CoinDesk’s “Future of Bitcoin” package.

Fran Finney, his widow, will accept the inaugural Finney Freedom Prize on Hal’s behalf and plans to donate the monetary prize of 1 bitcoin (BTC) to a yet-unnamed charity. Hal Finney died in 2014 due to complications from amyotrophic lateral sclerosis, or ALS.

HRF Chief Strategy Officer Alex Gladstein said the award is meant to honor those who make vital contributions to Bitcoin.

“Obviously we can’t give it to Satoshi. So, beyond that, it’s Hal. No one even comes close to his contributions,” Gladstein told CoinDesk in an interview. “He coded until his last days. I mean, he literally contributed to human freedom until his muscles didn’t cooperate anymore.”

“Hal would have been thrilled to see how this Bitcoin ecosystem has grown, and to learn that this once-obscure software project is now used by tens of millions of people worldwide,” Fran Finney said in a pre-recorded acceptance speech. “He would be honored to be the first recipient of this award, and humbled to have it be in his name. I feel great privilege and responsibility in accepting the first prize on his behalf.”

The Human Rights Foundation has set aside an additional 32 bitcoin, worth over $2 million at current prices, out of its own treasury to make awards well into the future. “Our view is that in 40 years, it’ll probably be the world’s largest cash prize,” Gladstein said.

For the next three years, the foundation will name a new laureate on Jan. 10, also known as “Running Bitcoin Day,” or the day Hal Finney posted on Twitter (now X) about becoming the first person besides Satoshi Nakamoto to download the Bitcoin software. After that, the awards will be handed out to coincide with Bitcoin halvings, approximately every four years. (The next one happens in a few hours from press time.)

The first four awards, including Finney’s, are meant specifically to retroactively reward those who made the biggest contributions to Bitcoin within the periods between each of the first four halvings: 2009-2012 (Finney), 2012-2016, 2016-2020 and 2020-2024. After that, the prize will go to those who contribute most in the intervening four years.

A “Genesis Committee” of seven individuals – including “The Genesis Book” author Aaron van Wirdum, Africa Bitcoin Conference founder Farida Nabourema, Bitcoin Core dev Gloria Zhao, bitcoin++ and Base58 co-founder Lisa Neigut, Fedi founder Obi Nwosu, Stone Ridge Holdings CEO Ross Stevens and Running Bitcoin Challenge co-founder Vitus Zeller – was picked to lead the nomination process until 2028.

Committee members will then nominate their successor, who will serve a four-year term.

“This is a prize that will outlast us all,” Gladstein said, noting that the last Bitcoin halving will take place sometime in the next century. “Hopefully we can have some kind of intellectual lineage here going through the decades. The first seven are only going to choose somebody who they really feel embodies their ideals so hopefully you get a committee in 100 years that’s somewhat reflective of the initial committee.”

Who is Hal Finney?

Even if Hal Finney had never discovered Bitcoin on the Cypherpunk Mailing List, becoming the first person to receive a bitcoin transaction and contribute code to the project, it’s likely he would be remembered by the Bitcoin community for his many contributions to cryptography and his privacy advocacy

A graduate of the California Institute of Technology, Finney began to make contributions to foundational cryptographic communications tool Pretty Good Privacy (better known as PGP) in the early 1990s, before working for the PGP Corp. directly until retirement. The program remains one of the best ways to encrypt online communications.

“The work we are doing here, broadly speaking, is dedicated to this goal of making Big Brother obsolete,” he wrote to a group of cryptographers, at a time when the U.S. government was looking to limit the public’s access to strong encryption.

Finney’s work on PGP led to his interest in digital currencies, which he thought could better protect people’s privacy than the emerging payment options like credit cards that were beginning to dominate (and still dominate) the web. In 2004, Finney created a prototype digital asset that reusable proof-of-work system, which although it didn’t catch on, went on to directly inspire Bitcoin.

Four years later, when Satoshi unveiled the Bitcoin white paper, Finney was one of a few people who took notice. He responded on Satoshi’s announcement post on the cryptography mailing list that he looked forward to seeing how the concept would be developed and was offered early access to the project source code.

Between 2009 and 2013, when Finney announced he was paralyzed on the BitcoinTalk forum, he made several key contributions to the Bitcoin software. Throughout his life he was a frequent marathon runner, alongside his wife Fran. In a 2009 Less Wrong blog post, Finney wrote “my dream is to contribute to open source software projects even from within an immobile body.”

There are some who believe that Finney is Satoshi, or a possible contributor to a group that referred to itself under the collective name. A recent post by Bitcoin OG Jameson Lopp disputes this claim, after reviewing timestamps that show Finney was often probably elsewhere while Satoshi was online. Finney himself denied that he was Satoshi Nakamoto.

“We wanted to do the prize not just to honor Hal’s contributions to Bitcoin, but digital privacy and freedom generally,” Gladstein said. “It is something that is very important to us.”

Edited by Nick Baker.

Bitcoin Whales Bought $1.2B BTC Amid the Price Dip, Fueling the Quick Rebound

  • The whale purchases marked a change in behavior compared to their inaction during previous dips over the past week.
  • The action perhaps helped bitcoin’s rebound to $65,000, marking the $60,000 level as a key support level for bitcoin’s price where buyers step in.

Large bitcoin (BTC) investors substantially increased their holdings as prices dipped below $60,000 in early Friday’s panicky action on the crypto markets ahead of the asset’s much-anticipated halving event.

Blockchain analytics firm IntoTheBlock’s “large holder netflow” metric shows that Bitcoin addresses holding at least 0.1% of the supply added 19,760 BTC worth over $1.2 billion to their holdings on Friday at an average price of $62,500.

Large holders – often called whales in crypto slang – are major market players who control large amounts of a digital asset and are usually considered to be smart, well-informed investors. Their purchases and sales can have a sizable impact on markets, thus crypto watchers closely follow their behavior to anticipate price movements.

“Bitcoin whales may have finally started buying the dip,” IntoTheBlock said in an X post on Friday. “Historically, accumulations by these addresses have often preceded rises in bitcoin’s price.”

The recent action marks a significant change in whales’ behavior compared to earlier this week, when large investors didn’t step in to capitalize on weakness, prompting fears about further downside.

The purchases perhaps fomented bitcoin’s sharp rebound past $65,000 from its overnight lows of $59,600 as Israel carried out airstrikes in Iran. Prominent crypto trader Skew also pointed out that the recovery was at least partly driven by spot BTC buyers. Recently, BTC settled at around $64,000, up 1% over the past 24 hours.

Zooming out, the largest crypto by market capitalization has been consolidating for the past few weeks, cooling off from record-breaking prices last month ahead of its four-year halving scheduled for April 20 (UTC). The event will cut the reward for miners by half, reducing the issuance of new tokens to circulation.

Prices bounced from around the $60,000 area after sell-offs for the third time in a week, carving out a significant support level where buyers step in to capitalize on lower prices.

“While sellers on the margin appear to be derisking, there has also been opportunistic buying between $60,000-62,000 levels,” Coinbase Institutional research analyst David Han said in a Friday report. “We think this directional uncertainty speaks to our thesis of bitcoin’s divergent roles both as a risk and a safe haven asset,” he added.

Edited by Nikhilesh De.

IRS Unveils Form Your Broker May Send Next Year to Report Your Crypto Moves

The U.S. Internal Revenue Service (IRS) has previewed what crypto investors’ future tax form might look like when it finishes its much-debated rule on how cryptocurrency transactions should be reported to the federal government.

The IRS offered a draft of the 1099-DA form that would be meant to figure out the taxable gains or losses when brokered digital assets change hands. The form reveals the agency will likely have an array of individual token codes that can be filled in, and it includes spaces for wallet addresses and where to find transactions on the relevant blockchain.

“Brokers must report proceeds from (and in some cases, basis for) digital asset dispositions to you and the IRS on Form 1099-DA,” according to the instructions included with the form, which shows a 2025 date. “You may be required to recognize gain from these dispositions of digital assets.”

This unveiling is preliminary and may still change depending on the final outcome of the tax rule proposed last year. While the establishment of U.S. tax practices for crypto is among the necessary steps toward ridding investors of uncertainty and confusion, cryptocurrency businesses are nervous about how the IRS will identify the digital asset brokers that would need to comply with the new system – potentially including wallet providers, decentralized platforms and payment processors.

This version of the form asks the filer to check a box that describes the type of broker they are: kiosk operator, digital asset payment processor, hosted wallet provider, unhosted wallet provider or “other.”

“As expected, the look and feel are similar to the Form 1099-B for reporting sales of traditional financial products,” said Jessalyn Dean, vice president of tax information reporting at Ledgible, in an analysis of the form that also noted the IRS has “packed a lot of lines and boxes into this form.”

Dean pointed out references to so-called wash sales and that the form provides for transactions that are only recorded internally by crypto firms. She contended that at least one of the boxes on non-deductible losses would need more guidance on how it works.

Miles Fuller, the head of government solutions at TaxBit, welcomed the “long-awaited” draft in a posting on LinkedIn.

“The form also carries through the requirements in the current draft regulations that wallet addresses and transactions hashes will be provided where relevant,” he wrote. “This was another point that received heavy feedback for a few different reasons. I am curious if this will change as the final regulations are released.”

The IRS is inviting public comments about the draft form. It remains unclear when the tax agency will produce a final rule, though the 2025 form suggests a completion at some point this year.

Read More: New Form 1099-DA: What it Means for Digital Asset Brokers and Their Customers

Edited by Nikhilesh De.

Bitcoin Will Power the Next DeFi Summer

In 2023, we said goodbye to Crypto Winter. Now, it’s time to say hello to a new era of DeFi Summer, this time centering on the most buzzworthy yet also durable trends: Bitcoin. With Ordinals proving demand, exchange-traded fundes (ETFs) providing access and Bitcoin scaling solutions emerging, 2024 is set to unlock the ~$1 trillion asset class in ways previously unseen.

This op-ed is part of CoinDesk’s “Future of Bitcoin” package.

The initial decentralized finance (DeFi) revolution in 2020 centered around smart contracts unleashing blockchain utility beyond the simple maintenance of a ledger and asset. It transformed the technology into a platform for vast, interoperable financial ecosystems. On the Ethereum Virtual Machine (EVM), people worldwide could essentially become their own banks, accessing hundreds of interoperable financial applications. This evolution offered a promising look into a future of finance governed by immutable code rather than fickle human beings.

As DeFi Summer unfolded, the technology and enthusiasm fueling DeFi extended to non-financial blockchain applications, notably non-fungible tokens (NFTs). Blockchains demonstrated their versatility by hosting not only financial systems but also becoming hubs for art, culture and gaming. Spurred by the constant inquiry of “what’s next,” blockchain technology seemingly expanded into every conceivable use-case, often stretching beyond its core utility and practicality at the height of the craze.

Ultimately, the initial buzz about NFTs and blockchain’s expansion turned to fear during the 2022 crypto winter, although this wouldn’t be the end for NFTs. 2023 witnessed a revival in the blockchain enthusiasm, thanks in part to NFTs making a strong comeback, this time taking the form of Ordinals on Bitcoin. Similar to how DeFi Summer revealed new blockchain capabilities, Ordinals and BRC20 tokens showcased Bitcoin’s potential, sparking excitement about the future possibilities of blockchain technology.

The question arose: If Bitcoin could support NFTs and tokens, what other applications could its unparalleled security and popularity cover?

Unlocking BTCFi

In retrospect, the NFT craze of 2021 can be interpreted as the fading-out of a hype cycle. While valuable, the technology was more a reverberation from DeFi’s big technological splash. In contrast, the current enthusiasm around Ordinals feels like the fading-in of a new cycle, representing newly discovered demand that will undoubtedly have downstream effects. This isn’t merely a repetition of past utility; it’s an intriguing development whose potential is just beginning to unfold.

Prior to the advent of Ordinals and BRC-20, there was a widespread belief that Bitcoin served a solely passive role within the blockchain ecosystem, offering little beyond basic asset functionality. This perception has shifted dramatically. Thanks to a number of significant advancements from a usability standpoint, Bitcoin is emerging as a critical security-provider for DeFi and as an asset with newfound utility and interoperability.

The future of Bitcoin DeFi involves bringing the Bitcoin network’s security to EVM-compatible smart contracts. Leading EVM-compatible Bitcoin scaling solutions are innovating methods to incentivize bitcoin miners to secure both the BTC asset and smart contracts simultaneously but independently. Ensuring miners, and consequently bitcoin itself, gain value is essential for expanding the Bitcoin network beyond safeguarding just the BTC asset.

Unlocking the BTC asset

Historically, BTC has served mainly as a passive store of value, not actively involved in DeFi security or commerce. Yet, much like ETH’s dual role in securing Ethereum and serving as currency, bitcoin has the potential to evolve into a versatile asset beyond the base Bitcoin chain. The introduction of Bitcoin staking in 2024 is set to transform BTC from a passive to a rewards-generating asset, marking a significant shift in its utility.

Once DeFi ecosystems become massively aligned with both bitcoin miners and bitcoin holders/stakers, those ecosystems become the greatest and safest platforms for “BTCFi.” As advancements such as HTLC atomic swaps and innovative bridging solutions overcome technical hurdles, BTC is set to pour into DeFi protocols. This influx will unlock extraordinary utility for the world’s premier and most trusted blockchain-based asset.

Building bitcoin DeFi together

Bitcoin is leading the creative front of blockchain innovation for the first time in years. Now that the Bitcoin base layer is widely recognized as permanently secure, it’s time to build solutions to bring it to new heights. Given that the BTC asset is the definitive self-sovereign asset, it only makes sense that the Bitcoin network should be the core protector of the future of self-sovereign decentralized finance.

We, the Bitcoin community, are acutely aware of the vast potential lying dormant within our network and its currency. It’s time to step forward and unlock this potential, fostering innovations that empower Bitcoin, DeFi and the pursuit of financial independence worldwide.

Edited by Daniel Kuhn.

Google Searches for ‘Bitcoin Halving’ Get Higher Than 4/20

Google searches for the term “Bitcoin halving” have hit an all-time high, surpassing the previous record set during the last halving in May 2020. According to Google Trends data, which uses a 100 point scale to determine the relative popularity of keyphrases, there is more interest than ever in the Bitcoin network halving.

This op-ed is part of CoinDesk’s “Future of Bitcoin” package.

Interest in the term has steadily ramped up since the start of 2024, alongside search interest in the phrase “Bitcoin” (which is still below its 2017 peak in terms of search interest). The surge in interest this month is notable considering bitcoin’s (BTC) recent rally has stalled out, including turbulence this week, which saw it drop from a high around $70,000 last Friday to $63,000 today.

(Google Trends)

Less than 60 blocks away, the fourth Bitcoin halving will see the number of bitcoin paid out as a block reward to miners cut in half from the current 6.25 BTC to 3.125 BTC. This particular halving is notable for a number of reasons, including the resurging interest in Bitcoin as a developer ecosystem, the onshoring of the U.S. mining industry following China’s ban and the relatively recent launch of spot bitcoin ETFs that helped ignite a (now ebbing) market rally.

“This is the first halving in which major U.S. asset managers are educating on Bitcoin, and there’s no better Bitcoin education than learning about the halving. It’s a narrative event first – a quadrennial market moment – and a supply event second, though I think both aspects will be impactful,” Galaxy Digital head of research Alex Thorn told CoinDesk via email.

Though it’s not just fund managers having fun. As Decrypt initially reported, search frequency for “Bitcoin halving” surpassed the cannabis culture meme number “420” for the first time in its history. This is especially notable because the halving was initially scheduled to coincide with the April 20 holiday known for its cannabis-oriented celebrations, though is now likely to occur Friday evening.

(Google Trends)(Google Trends)

Leaving Behind Bitcoin Sectarianism

I’ve always tended to be heterodox in my beliefs, my social attitudes and the way I reason outside of scholarly consensus.

Patrick Dugan is the founder of the Omni Foundation, CEO of TradeLayer and coiner of the term “crypto-dollarization”.

This article is part of CoinDesk’s “Future of Bitcoin” package.

It was about 11 years ago that I sent the wire to Mt. Gox to purchase my first bitcoins (BTC). A few months later I relied on those coins to survive getting robbed of all my items and cash in capital controlled Argentina. LocalBitcoins was my realization of the reality of Bitcoin as world-changing technology, and my survival tool in an emergency.

Then after getting into arbitrage trading and dipping into the bull market of 2013, I found work with the Mastercoin Foundation, funded by the first initial coin offering (ICO). In March 2014 I saw the debate over reactivating OP_Return as a soft-fork, but with a lower, 40 byte limit — the argument was that a higher threshold would enable spam.

I saw the vehement passion by which the byte-size conservatives argued, and found it perplexing. Little did I know that this debate over whether the limit should be 40 bytes versus 80 bytes would continue to snowball into a whole ideological sectarian rift in the Bitcoin community.

When I got into crypto, it was all about, you know, being able to control your own money, whether that means surviving being robbed of all your cash in a country with capital controls, buying LSD from a foreign chemist or any number of things synonymous with righteous resistance against tyranny and fostering human freedom and thriving.

But what resulted in the intervening years has been infighting. In short, the Bitcoin community, since the so-called “Blocksize Wars,” has seen fierce opposition between the pro-data people and the people who want Bitcoin to be a data-light form of digital gold.

Meanwhile, I dreamed a dream of decentralized derivatives backing synthetic dollars without any banking, earning yield off of basis trades when bitcoin price trends lead to futures contango (when longer-dated futures have a higher premium so there’s time value in being long bitcoin and short futures).

To quote a famous man:

Here’s what happened:

  • BlackRock made us an offer we couldn’t refuse: Finally putting BTC as a ticker mainstream American baby boomers can purchase with their IRA accounts, causing our USD-denominated wealth to go up
  • U.S. resident participation in most crypto activities became so problematic through tax enforcement complications, know-your-customer headaches and increasingly draconian penalties (such as the i6050 $10,000 threshold penalty for sending someone BTC or any other coin), meaning U.S. bitcoiners became predominantly focused on holding and not using BTC
  • Stablecoins emerged as the de facto blockchain-based way to transfer value (which started on the Mastercoin protocol, but due to the fees, quickly migrated to Ethereum). USDT on Tron is the category winner.
  • The Lightning Network, an attempt to create a flexible, low-cost way to spend BTC, found itself constrained with the irreducible on-chain cost of opening new channels, which limited any routing abstractions to try and fix the problem.
  • The first major upgrade of Bitcoin network that was acceptable to political consensus since the 2017 Segwit upgrade, Taproot, got used as a work-around for the 80 byte OP_Return limit, leading to a renewed burst of NFT-trading activity around Bitcoin, driving up transaction fees. (This has rankled conservative bitcoiners who now want to avert any future upgrade for fear of similar ingenuity.)
  • Jeremy Rubin, a prominent Bitcoin developer with an alternative way to scale the network, has become the subject of insults and scrutiny as possible agent provocateur for the supposed crime of making a moderately conservative upgrade meant to make Bitcoin more usable, mostly at his own expense as well as the expense of years of free labor for the team.
  • BitVM by Robin Linus is the new Lightning; it’s like making a virtual machine out of switches in Minecraft, facilitating peg-in-peg-out without upgrading the core protocol. Jeremy Rubin has volunteered efforts on it such as flattening arrays. There is much debate about its limitations despite these herculean R&D efforts to make a path around the Holy Mountain of an ossified protocol (instead of drilling a tunnel through with a hard fork upgrade).

In other words, in the past 15 years that Bitcoin has been around, a number of attempts designed to make the first and most important blockchain a suitable platform to develop on have failed or been resisted by the community. Did the “number go up”? Yes, yes it did. But is Bitcoin any better off? It’s hard to say.

The time has come to honestly ask: did we fail?

The Bitcoin community is not significantly closer to having a peer-to-peer medium of exchange reality where access to global liquidity and freedom of commercial association is a universally ensconced human right. And our *enemies*, people who hate human freedom, are actually closer to attaining the Carrol Quigley dream of a global college of ordoliberal consensus (i.e. a New World Orderrrr).

We’re still busy arguing about ways to accomplish things that really could be done very easily with a single fork, but the issue is political and a preponderance of precautionary principle precipitating our placid perversions.

Let me put it another way: it’s super weird when an engineering culture of crypto-anarchists develops anti-intellectualism.

Having said that, I’ve been humbled by my own business trip-ups trying to make a work-around to Bitcoin’s inbuilt limitations. After years of experimenting on Bitcoin and having to rewrite my core software due to an avalanche of tech debt trying to cross-compile with the whole Bitcoin C++ project, and many years of boom and bust, I’m finally shipping. And I’m shipping on Litecoin first. Because, hey, Litecoiners are nice people. They, like me, have been humbled by pain.

Being humbled by pain did another things to me. It forced me to start practicing gratitude and that led me back to God, first in a reconstructionist sort of heretical Catholicism or revisionist protestant Christianity, and then to a reconstructionist, Quran-centric Sufi Islam. And one thing I learned from studying religion the last two years (building in the bear market, you might say) is that human beings love to be sectarian. We love it! It’s like, our favorite thing.

Asserting one’s moral superiority over people who are otherwise your ideological brothers based on invented distinctions is one of the “finer things” in life. Repudiating human-made distinctions that distract from the purity of God’s principles is a major theme in the Qur’an (6:159, 30:32,42:14) and Gospels (Mark 7:5-8, Luke 9:46-56). It’s clear that us bitcoiners have fallen into the same tendency, because to err is human, but to forgive is divine mah Brothers!

What’s happening in the state of the Bitcoin Ummah in this, the year of our Lord 2024, the month of April, the 4th halving, is we’re starting to appreciate that we’re too successful to fully succeed at sabotaging ourselves with endless sectarianism. The outspoken voices of a purist minority are being eclipsed by the onslaught of new users and capital inflow, and the unrelenting march of innovation by a few brilliant weirdos who are doing things with zero-knowledge proofs, embedding DeFi with work-arounds, and other hacks, to force Bitcoin to work as a medium of exchange that non-hodlers can utilize.

The time where social media rhetoric dominated Bitcoin discourse is over, the time where usage demonstrates the trade-offs of competing technical solutions has dawned.

Crypto Markets Will Be Driven by Macro Factors Following the Halving, Coinbase Says

  • Crypto markets will be driven by macro factors in the short term, Coinbase said.
  • Previous halvings were accompanied by other cryptocurrency ecosystem catalysts that acted as tailwinds.
  • The growth of investors using bitcoin as a macro hedge has reduced volatility this cycle, the report said.

The direction of digital asset markets following the bitcoin (BTC) halving is more likely to be driven by macroeconomic factors even as crypto fundamentals remain strong, Coinbase (COIN) said in a research report on Thursday.

“These factors are largely exogenous to crypto and include increased geopolitical tensions, higher for longer rates, reflation, and rising national debts,” analyst David Han wrote.

The recent elevated correlation of altcoins to bitcoin underlines this, Han wrote, “indicating BTC’s anchor role in the space even as BTC firms its position as a macro asset.”

While previous halvings have historically kickstarted a bull market, “these cyclical runups have often been accompanied by other ecosystem catalysts that provide additional tailwinds,” the report said.

The quadrennial reward halving slows the rate of growth in bitcoin supply by 50% and is expected to occur late this evening or early tomorrow UTC.

While crypto has been largely been viewed as a “risk on” asset class, Coinbase says “bitcoin’s continued resilience and the approval of spot exchange-traded funds (ETFs) has created a bifurcated pool of investors (for bitcoin in particular) – one which sees bitcoin as a purely speculative asset, and another that treats bitcoin as a ‘digital gold’ and hedge against geopolitical risk.”

The growth of investors that use bitcoin as a macro hedge partly explains the reduced magnitude of pullbacks this cycle, the report added.

Wall Street giant Goldman Sachs (GS) expressed similar sentiment in a report last week. It said “caution should be taken against extrapolating the past cycles and the impact of halving, given the prevailing macro conditions.”

Edited by Sheldon Reback.

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