Hi degens,

This week rivaled the Met Gala's buzz, breaking records and seeing banks fall (New York Bank, we're looking at you). Amidst the chaos, Bitcoin held strong above $66K.

Catch the latest in our Web3 Creator edition, mixing spicy and sweet from the crypto world. 🍯🧄

BlackRock wants all your Bitcoin

Bitcoin ETFs traded $10 BILLION in volume yesterday, smashing the previous record by more than $2 billion.

But it is BlackRock’s Bitcoin voyeurism that’s catching everyone’s attention. 

A few highlights: 

Bitcoin ETF Net In Flows currently stand at + 4.9K Bitcoin

New All-Time High:  790.9K BTC Held in ETFs

• New 9 ETFs:  + 9.1K BTC  

• Blackrock +4.2K BTC 

• Fidelity + 3.1K BTC

GBTC continues to bleed. It dumped 4.1K BTC yesterday. (Link)

BlackRock's ETF Gobbles Up the Most Bitcoin

BlackRock's iShares Bitcoin Trust (IBIT) has emerged as the most successful ETF launch in history. Together with Fidelity's ETF, they've acquired a staggering 284,000 Bitcoins – exceeding 1% of the total Bitcoin supply that will ever exist.

BlackRock's dominance extends further, with IBIT leading the pack in daily inflows at a record $788 million on Monday. This aggressive accumulation suggests that BlackRock is bullish on Bitcoin's future, unfazed by recent price fluctuations.

BlackRock is leading the charge

BlackRock's Spot Bitcoin ETF is currently the best performer on the market. 

BlackRock has filed with the SEC to include more Bitcoin ETFs in its Strategic Income Opportunities (SIO) Fund. This move highlights their confidence in Bitcoin's potential for income generation and portfolio diversification. 

We are facing a Bitcoin liquidity crisis 🤒

Bitcoin is going parabolic.

It briefly touched $69K on 5th March. But immediately came down to $66k, thanks to $2 billion worth of liquidations. (We told you in the last newsletter. Liquidations have been the culprit all along)

More than 90% of the Bitcoin has been mined. And you might think the most imperative question today is, “What happens when the last Bitcoin gets mined?”

It is not. Instead, a more imminent question is, “What happens when the last $BTC leaves the exchanges and OTC desks?”

Bitcoin is facing a supply crunch.

We have our reasons to posit this thesis:

• Retailers are back on exchanges: Trading volumes have surged by ~150% on exchanges. The initial demand which pushed the prices up to $64K was mostly from ETFs. 

• The ETF demand for bitcoins isn’t slowing: ETFs are sweeping up coins from OTC desks, which are almost empty. ETFs are buying more bitcoins that are being mined each day. After halving, the supply will be halved. 

Right now, ETFs are buying from the open market.  

• Depleting Exchange Supply: Bitcoin is draining from exchanges at 11.64%. Friday saw a massive $2.3B withdrawal. There are no bitcoins left on Binance sell wall and even Coinbase. CashApp has already exhausted its Bitcoin. 

MicroStrategy has raised $700 million to purchase more bitcoins. There are more institutions sanctioning approvals for ETFs and adding them to retirement plans. 

The American Banking crisis isn’t stopping. And who doesn’t know America alone is in trillions of debt currently. Egypt debased its currency against the dollar by 45%. Fiat is failing its users. And more and more people are finding Bitcoin’s virtues as viable. 

A potential supply crunch lies near. It won’t be a surprise if $BTC touches $1M or we get to see Bitcoin auctions, too. 

Ethereum is under a great centralization threat ⚠️

Ethereum is at a yearly high of $3,800 and is pushing for another ATH.  

Ethereum is at another high. For the first time, the amount of Ethereum staked has reached 26.38% of the total supply. 

Yet, some concerns around centralization are raising eyebrows from all quarters. Ethereum is undergoing a diversity threat on several grounds, including: 

• Its consensus and execution of clients

• Staking protocols 

• Geographical distribution of nodes

Client Diversity

Client diversity is critical for the stability of any network.  If a single client is used by 2/3rds (66%) of validators, there's a very real risk this can result in disrupting the chain and monetary loss for node operators.

33% is the market goal for all clients -- execution and consensus. 

However, Geth execution client has a 72% majority on the #Ethereum execution layer. This level of dependency could cause a chain split! 

Prysm consensus client has a 35% share of the consensus layer. Any client bug over 33.3% could mean a loss of finality.

A shoutout to Kiln, who has migrated 50.1% to Nethermind. 👏

Coinbase is also migrating to 50% Nethermind. Both of them are concerning Erigon as a client, too. 

Ethereum staking

$ETH staking is highly concentrated: 

• 30.05% of the Ether is staked through the staking protocol Lido 

• 13.9% and 3.9% on Coinbase and Binance exchanges  

33.3% is the threshold limit. Lido is slowly becoming a systematic threat to Ethereum. 

Find the detailed breakdown here (Link)

Geographical distribution of nodes

Ethereum network participants are in 90 countries. 🌍

However, the geographic distribution of #Ethereum’s node count isn’t optimal:

US: 34%

Germany: 18%

Finland: 7%

Ethereum is already losing out to L2s in terms of:

1. Transaction count

2. The fees generated

As the Dencun upgrade approaches, we expect Ethereum to be able to scale, diversify, and execute better.

Until then, we have our 👀 and hopes on. 

News from the crypto market 

• Is Tesla buying Bitcoin again: Arkham Intel revealed Tesla's Bitcoin holdings grew by 1,789, raising questions about a potential new purchase. This comes after Tesla's last reported holdings of 9,720 BTC. (Link)

• Pantera to fundraise $250M for SOL purchase: Investment firm Pantera Capital is raising $250 million to purchase Solana tokens from the bankrupt FTX estate. This move suggests they see buying potential in SOL despite the FTX crash. (Link) 

• SEC delays ETH ETF approval: The SEC delayed decisions on BlackRock and Fidelity's Ethereum ETF applications, opening a public comment period. Analysts expect delays to continue until May 23rd, with ETF issuer actions potentially influencing the SEC's final decision. (Link)

• $BTC miner revenue records 2nd best day in history: Bitcoin miner revenue hit a record high of $75.9 million on the same day a major mining facility shut down due to high energy costs. This highlights the delicate balance between profitability and operational challenges in Bitcoin mining.(Link)

• Uniswap hits a 2-year high led by the fee-share proposal: Uniswap's governance token, UNI, surged 46% to over $17, its highest price since January 2022. This rally follows a proposed upgrade to increase community involvement through fee distribution to UNI holders. (Link)

Some more news for you:

• Ethereum’s Dencun upgrade will push the L1 into a rollup-centric future 

• ETFs fuel a $100K price target for Bitcoin ending its accumulation phase 

• BlockFi customers could receive $250 million ahead of other FTX creators

Meme of the Week

Tweet of the Week:

That’s a wrap. See you next week!