Over Half Billion Crypto Users in 2023

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The Blends Briefs
TL’DR: Here’s a sneak peek into today’s newsletter

• Investors are shifting from crypto funds to Bitcoin ETFs.

• Terraform Labs files for Bankruptcy. 

• Over half a billion crypto users in 2023.

• Hong Kong may see the first spot in crypto ETFs by mid-2024.

• Dictionomics:  Crypto Haven

Global Biscuits

Investors are shifting from crypto funds to Bitcoin ETFs.
Cash is reportedly leaving high-profile crypto funds following the launch of spot Bitcoin exchange-traded funds (ETFs) in January. According to CoinShares, investors withdrew $21 million from crypto fund issuers last week, and since the launch of Bitcoin ETFs, $2.9 billion has been pulled out of top funds like Grayscale, CoinShares, and 21Shares. On the other hand, Bitcoin ETFs have seen $4.13 billion in inflows since their launch. The report suggests that investors are moving towards the new Bitcoin ETFs while pulling money out of other types of crypto funds.

Terraform Labs files for Bankruptcy.
Terraform Labs, the company behind the algorithmic stablecoin TerraUSD and cryptocurrency Luna, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The company's liabilities and assets are estimated to be between $100 million and $500 million. Terraform Labs collapsed in May 2022, and in February 2023, the U.S. Securities and Exchange Commission charged the firm and then-CEO Kwon Do-hyeong with fraud. The bankruptcy filing is expected to help the company manage ongoing legal affairs, including the SEC lawsuit and pending litigation in Singapore. Co-founder and former CEO Do Kwon is awaiting extradition from Montenegro.

Over half a billion crypto users in 2023.
According to a market sizing report by Crypto.com, the global number of cryptocurrency users increased by 34% in 2023, reaching 580 million people, up from 432 million. Ether (ETH) ownership rose from 89 million to 124 million users, while Bitcoin (BTC) ownership increased from 222 million to 296 million. The report notes that despite macroeconomic challenges, including monetary tightening by Western central banks and geopolitical conflicts, cryptocurrency adoption achieved new milestones in 2023. Factors such as Ethereum's Shanghai upgrade, the introduction of NFT functionality on the Bitcoin blockchain, and speculation around the approval of Bitcoin ETFs contributed to the growth. 

Tastes of the regions

Hong Kong may see the first spot in crypto ETFs by mid-2024.
Gary Tiu, executive director of OSL, a Hong Kong-licensed crypto exchange, has suggested that the city could potentially see the issuance of its first spot crypto exchange-traded funds (ETFs) by the middle of this year. Tiu mentioned that OSL is in close communication with multiple fund companies, with five to ten companies studying such an ETF. Around five companies have progressed faster than others, making it possible for Hong Kong to see its first spot crypto ETFs by mid-year. Tiu emphasized the importance of ensuring that fees are not excessively high in collaboration with fund companies.

Dictionomics:   Crypto Haven

Crypto haven is a term used to describe a jurisdiction that offers favorable conditions for the development and adoption of cryptocurrencies and blockchain technology. Some of the factors that make a crypto haven attractive are low or no taxes, clear and supportive regulations, strong privacy and security laws, and access to talent and capital. Some examples of crypto havens are Switzerland.

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