This article briefly:
•Arkham Intelligence has identified addresses for four Bitcoin exchange-traded products, bringing the number of known U.S. spot ETF addresses to five.
•Coinbase, the custodian of eight of the 11 Bitcoin ETFs, faces potential concentration risk that could create a single point of weakness.
•Following the launch of a U.S. Bitcoin ETF, European and Canadian funds lost around 5,000 BTC, leading to a significant drop in European fees.
On-chain analytics firm Arkham Intelligence has identified four Bitcoin exchange-traded product (ETP) addresses. This latest discovery brings the number of exchange-traded fund (ETF) providers with known BTC addresses to five.
Arkham Intelligence has identified product addresses offered by BlackRock, Bitwise, Fidelity and Franklin Templeton.
Bitcoin ETF Providers May Worry About Public Exposure
Data shows that Fidelity holds $1.21 billion worth of Bitcoin in the Fidelity Wise Origin Bitcoin Fund at custodian Fidelity Digital Asset Services LLC. BlackRock, Bitwise, and Franklin Templeton hold BTC worth $1.16 billion, $422.68 million, and $47.09 million on the Coinbase Prime custody platform.
Coinbase is the custodian of eight of the 11 Bitcoin ETFs, which some have called concentration risk. The custodian holds the private keys that enable the address owner to move their BTC. Gemini, a cryptocurrency exchange founded by Cameron Winklevoss and Tyler Winklevoss, is the custodian of the VanEck Bitcoin Trust.
Last February, the U.S. Securities and Exchange Commission proposed new rules for cryptocurrency custodians. It plans to roll out the rules later this year.
The concentration of billions of dollars worth of cryptocurrencies could create a single point of failure. Cybersecurity breaches or legal risks may jeopardize customer funds. A hack of the Coinbase database could reveal transfer information that the institution may not want made public.
CoinMetrics, an analytics firm co-founded by cryptocurrency venture capitalist Nic Carter, said the emergence of new research methods is important as Bitcoin develops. In a recent blog post about on-chain analytics, the company said,
“As Bitcoin continues to develop and mature, the need for critical study of it increases accordingly.”
Coinbase recently revealed that it had received more than 12,000 law enforcement requests in 2023 related to criminal matters. The exchange is currently engaged in a protracted court battle over the security status of several crypto assets.
The impact of U.S. Bitcoin ETFs on Europe
The launch of a U.S. Bitcoin ETF earlier this month led to a loss of around 5,000 Bitcoin in European and Canadian funds. European exchange-traded product (ETP) providers Invesco and WisdomTree have since slashed fees by as much as 60%. Fees on WisdomTree’s physical Bitcoin ETP have been reduced from 0.95% to 0.35%, while Invesco has reduced fees on its physical Bitcoin ETP from 0.99% to 0.39% of assets under management.
European and Canadian Bitcoin ETFs were among the only regulated Bitcoin products for institutions until their U.S. counterparts came online. 21Shares is ARK Invest’s US Bitcoin ETF partner and a well-known ETF provider in Europe. #Arkham #比特币ETF
