Bitcoin (BTC) was once touted as digital gold – a hedge against currency instability and market turmoil. But recent price movements tell a unique story.
With increasing institutional participation, particularly through exchange-traded funds and other traditional instruments, Bitcoin is increasingly trading in lockstep with risk assets. The recent downturn in software stocks, sparked by renewed uncertainty over AI's impact on the sector, has been reflected in crypto markets and raises latest questions on Bitcoin's evolving identity.
This changing dynamic sets the tone for this week's Crypto Biz. New research from Grayscale examines Bitcoin's increasing correlation with growth stocks as an Ether (ETH) financial firm doubles despite multibillion-dollar paper losses. Elsewhere, BlackRock is expanding its tokenization push with a Uniswap integration, and Polymarket is taking its battle over government regulation to federal court.
Grayscale: Bitcoin is trading like a growth stock, not digital gold
New research from Grayscale suggests that Bitcoin's store of value narrative has taken a backseat of late and the digital asset is behaving more like a growth stock.
In the report, writer Zach Pandl said that Grayscale continues to view Bitcoin as a long-term store of value as a consequence of its fixed supply and independence from central banks, but its short-term trading patterns are much like those of high-growth stocks.
The evaluation found a robust correlation between Bitcoin and software stocks over the past two years. That connection has turn into clearer as software firms face renewed selling pressure amid concerns that artificial intelligence could revolutionize parts of the industry.
With this in mind, Bitcoin's recent decline seems less surprising as its price has closely tracked the movements of the software sector.
Bitcoin's recent price performance is basically much like that of software stocks. Source: Grayscale
BitMine adds 40,613 ETH during market selloff
Ether financing firm BitMine Immersion Technologies added 40,613 ETH to its holdings through the recent market sell-off, reiterating its long-term bet on Ether whilst prices fall and paper losses reach billions of dollars.
The purchase increased BitMine's total Ether holdings to greater than 4.326 million ETH, which is value around $8.8 billion at current levels. According to DropsTab, the corporate is currently sitting on around $8.1 billion in unrealized losses on its ETH position, reflecting a big gap between its cost base and today's market price.
Despite criticism from investors and pressure on its share price, which has fallen sharply in recent months, BitMine Chairman Tom Lee said the corporate's strategy is designed to trace Ether's long-term performance and profit from future recoveries. The company's broader crypto and money portfolio is value around $10 billion.
BitMine's paper losses now exceed $8.1 billion. Source: DropStab
BlackRock buys UNI and brings BUIDL to Uniswap
BlackRock deepens its push into decentralized finance by listing its tokenized money market fund on Uniswap, a key step for institutional adoption of DeFi.
The asset manager’s USD Institutional Digital Liquidity Fund (BUIDL) is now available on the decentralized exchange, giving whitelisted institutional investors the flexibility to trade the tokenized treasury product on-chain. As a part of this move, BlackRock can also be purchasing Uniswap’s governance token, UNI.
BUIDL is the biggest tokenized money market fund with greater than $2.1 billion in assets. The fund shall be issued across multiple blockchains including Ethereum, Solana and Avalanche. In December, the corporate exceeded $100 million in cumulative distributions from its U.S. Treasury holdings.
BlackRock's BUIDL has greater than $2.1 billion in assets. Source: RWA.xyz
Polymarket is suing Massachusetts over state regulation of prediction markets
Decentralized prediction market Polymarket has filed a federal lawsuit against the state of Massachusetts, difficult state authorities' efforts to limit or shut down its event-based trading products.
Polymarket Chief Legal Officer Neal Kumar confirmed the filing on Monday and said unresolved legal questions on jurisdiction ought to be resolved on the federal level, not through state enforcement. The lawsuit is a pre-emptive motion aimed toward blocking any motion by Massachusetts Attorney General Andrea Campbell that Polymarket believes would unlawfully intervene in federally regulated markets.
The company argues that the Commodity Futures Trading Commission (CFTC), not individual states, has exclusive authority over event contracts like those offered on its platform and that state actions risk fragmenting national markets.
Source: Neal Kumar
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