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Crypto SWOT: The Hong Kong exchange is considering leveraged and inverse crypto ETFs

Kitco Media
By Frank E Holmes
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Crypto SWOT: The Hong Kong exchange is considering leveraged and inverse crypto ETFs teaser image

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Helium, rising 55.16%.
  • Tether Holdings, the operator of the largest stablecoin, said it posted record net profit of $4.52 billion in the first quarter, reports Bloomberg, largely driven by interest earned from its holdings of U.S. Treasuries and appreciation in Bitcoin and gold. The market value of Tether’s USDt token has climbed over $110 billion, as the demand for the stablecoin rose during the latest crypto bull market.  
  • A key issuer of Hong Kong’s new spot Bitcoin and Ether ETFs suggested the products are a step toward more diversified portfolios for Chinese investors. The launch of funds on Tuesday “opens the door for a lot of RMB holders” seeking alternative investments, writes Bloomberg. 

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Pendle, down 24.64%.
  • The prospect of higher-for-longer interest rates is weighing on crypto, reports Bloomberg, underlined by deepening Bitcoin losses after the token’s worst monthly drop since the collapse of Sam Bankman-Fried’s FTX empire in November 2022. Bitcoin slumped almost 16% in April.

  • Binance founder CZ was ordered to spend four months in prison for failures that allowed cybercriminals and terrorist groups to freely trade on the world’s largest cryptocurrency exchange. Zhao was sentenced Tuesday by U.S. District Judge Richard Jones in Seattle, writes Bloomberg. 

Opportunities

  • Nasdaq listed coal miner Alliance Resource Partners said in an earnings call that it has mined $30 million in bitcoin using excess power at its facilities, reports Bloomberg. The CFO said that the company had 425 bitcoins on its balance sheet which it is valuing at $30 million.
  • Hong Kong’s stock exchange indicated the bourse is open to an expanded roster of crypto exchange-traded funds, as the city’s first spot-Bitcoin and Ether products go live, according to Bloomberg. 
  • The bankruptcy estate of the failed FTX cryptocurrency exchange plans to auction off another unspecified amount of Solana tokens this week. A “blind auction” will be held for the next batch of SOL, according to two people familiar with the process who asked to remain anonymous, writes Bloomberg.  

Threats

  • Roger Ver, an early investor who was sometimes referred to as Bitcoin Jesus, has been charged for mail fraud, tax evasion and filing false returns in order to avoid paying at least $48 million in U.S. taxes, reports Bloomberg. He was arrested over the weekend in Spain over criminal charges.
  • MicroStrategy stock slipped lower on Tuesday after the company reported revenue and profit short of Wall Street’s expectations. The company reported a loss of $3.09 a share on revenue of $115 million in the first quarter, below the loss of 55 cents a share on revenue of $121.7 million expected, writes Bloomberg. 
  • U.S. spot Bitcoin ETFs suffered their largest daily outflow as the digital token heads for its worst week since August 2023. Investors pulled a net $564 million from the batch of almost a dozen funds on Wednesday, writes Bloomberg. 
Kitco Media

Frank E Holmes

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., a boutique investment advisory firm based in San Antonio that manages domestic and offshore funds specializing in the natural resources and emerging markets sectors. The company’s no-load mutual funds include the Global Resources Fund (ticker PSPFX), the World Precious Minerals Fund (UNWPX) and the Gold Shares Fund (USERX).

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