Welcome to the March 12, 2024 edition of the Genfinity News Recap! As you navigate through your busy workday, staying informed about the latest developments in the realms of Web3 and finance can be a challenge. However, we are here to provide you with an overview of the crypto news you might have overlooked today.
March 12, 2024 Genfinity News Recap
Bitcoin
The BlackRock iShares Bitcoin ETF (IBIT) has accumulated more Bitcoin in less than two months than MicroStrategy (MSTR). Analyzed by CoinDesk, IBIT disclosed holdings of 195,985 Bitcoin on Friday, surpassing MicroStrategy’s reported 193,000 tokens as of Feb. 26.
Since the launch of spot ETFs on Jan. 11, IBIT has consistently added hundreds of millions of dollars worth of Bitcoin daily, making it the largest spot product after the Grayscale Bitcoin Trust. The significant demand for new spot ETFs has contributed to Bitcoin’s massive price surge this year.
Cointelegraph brought a new perspective to ETFs via analytics firm CryptoQuant. Industry analyst Ki Young Ju, CEO of CryptoQuant, predicts a potential “sell-side liquidity crisis” for Bitcoin by September if institutional inflows persist. With US-based spot Bitcoin ETFs holding nearly $30 billion and continuing to see significant inflows, Ki warns of a supply shortage.
He emphasizes that until ETF inflows cease, bears in the market won’t prevail, pointing out that ETFs alone accumulated over 30,000 BTC last week, which poses a risk considering there are only about 3 million BTC in exchange and miner wallets. Ki suggests that when the tipping point from ETF demand occurs, the impact on BTC price may exceed market expectations due to limited sell-side liquidity.
Regulation
This week, President Biden’s 2025 budget was made public, proposing crypto regulations towards wash trading and mining taxes, aiming to generate billions in revenue. The plan targets tax loopholes benefiting the wealthy, closing like-kind exchange and life insurance tax shelters. Wash trading, common in NFT markets, would be curbed, aligning crypto tax rules with traditional securities. CoinDesk noted that previous attempts at similar taxes weren’t adopted.
Notably, a 30% excise tax would be levied upon digital asset mining, with the taxes being phased in starting at 10% in 2025.
Coinbase Inc. (COIN) has accused the U.S. Securities and Exchange Commission (SEC) of disregarding the law by rejecting the company’s formal petition for crypto regulations, as stated in a filing with the U.S. Court of Appeals for the Third Circuit. Summarized by CoinDesk, lawyers for Coinbase argue that the SEC’s authority over crypto assets lacks clear regulations, leading to arbitrary enforcement actions instead of formal rules.
Despite rejecting Coinbase’s petition without explanation, SEC Chair Gary Gensler defended the agency’s approach, emphasizing its discretion in setting rulemaking priorities. Coinbase’s lawsuit aims to compel the SEC to provide a clear explanation for its inaction on crypto regulations. The company criticizes the SEC for imposing unclear securities laws on the industry while failing to establish stable standards through formal rulemaking.
Although this legal challenge is separate from Coinbase’s ongoing court battle with the SEC, both cases highlight the regulator’s reluctance to define crypto securities. The SEC’s mixed record in crypto-related court cases, including wins and losses, indicates ongoing uncertainty in the industry’s regulatory landscape, likely to persist through appeals and potentially reach the U.S. Supreme Court.
Ethereum
The Dencun update for Ethereum, scheduled for Wednesday, aims to enhance user experience and decrease transaction fees on Layer-2 blockchains. Investopedia reported that notable changes include EIP-4844 for proto-danksharding, which optimizes gas fees for Layer-2 data and boosts transaction throughput.
Exchanges like Coinbase and Kraken anticipate delays during the update rollout, affecting Ethereum transactions. Coinbase anticipates a disruption for an hour around 9:45am EST, and Kraken may have a 15 minute delay at 4am EST.
The upgrade should provide more efficient storage of Layer-2 data on the Ethereum blockchain, reducing gas costs significantly. While Ethereum’s scalability and competitiveness could improve with the upgrade, Layer-1 users may not see significant fee reductions. The update could position Ethereum as a global database for Layer-2 networks, potentially increasing its competitiveness against other blockchains.
We hope you enjoyed our March 12, 2024 Genfinity News Recap! Come back tomorrow evening for another news summary and please leave a comment below.
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Now that the EIP-4844 update has been implemented, marking a significant stride in Ethereum’s journey towards enhanced scalability and lower transaction fees for Layer 2 networks, we’re keen to observe its real-world implications. This advancement could redefine Ethereum’s role in the blockchain ecosystem, further solidifying its foundation. At Pinax, having been part of this pivotal development, we’re interested in your experience with these changes. Have they met your expectations? Your insights are valuable to us. – The Pinax Team