Preliminary data from Farside Investors revealed that four of the new spot Bitcoin ETFs had another day of zero flows on April 16.

These were Bitwise (BITB), Invesco Galaxy (BTCO), WisdomTree (BTCW), and Hashdex (DEFI).

Additionally, Grayscale’s GBTC and ARK 21Shares’ ARKB had outflows of $79.4 million and $12.9 million respectively.

Nevertheless, Bloomberg ETF analyst James Seyffart said this was perfectly normal.

To all those people emailing us, saying we have a bug, because that many flows cannot be zero and its too much of a coincidence. See this thread from @JSeyff

Bitcoiners clearly do not understand ETFs, we are so early… https://t.co/aLhTiJX3IS

— Farside Investors (@FarsideUK) April 16, 2024

Why Zeros Don’t Matter

On April 16, Seyffart said that on any given day, the vast majority of ETFs will have a flow number of zero, adding that “this is very normal.”

He said that there are around 3,500 ETFs in the US, and on April 15, 2,903 of them had a flow of exactly zero. Moreover, nine of the newly launched eleven spot Bitcoin ETFs, including Fidelity (FBTC), had a flow of zero that day.

He explained that shares are produced or destroyed in creation units, which only happens when there is a mismatch in supply and demand.

“That mismatch has to be large enough to justify tapping the underlying market,” and a bigger mismatch than a creation unit, he added.

Moreover, creation units are the lots that ETF shares are created and redeemed in. Every ETF can have different-sized creation units. In the case of the spot Bitcoin ETFs, they are blocks of shares ranging from 5,000 to 50,000 shares, he said.

“A creation or redemption will only happen if there is a large enough mismatch in supply and demand AND the cost to make a market by doing that creation or redemption is lower than simply hedging and making markets the old fashioned way.”

Okay too many questions about #Bitcoin ETFs and zero flows — a few quick thoughts:

1. On any given day, the vast majority of ETFs will have a flow number of ZERO — this is very normal. There are ~3,500 ETFs in the US. Yesterday 2,903 of them had a flow of exactly zero

— James Seyffart (@JSeyff) April 16, 2024

Third Day of Outflows

Minor mismatches will see the market makers handle trading of shares just like they would a stock, Seyffart explained. However, “it needs to be lopsided and more than a creation unit in either direction for market makers to tap the underlying market,” he added.

Therefore, when these mismatches are large enough, there will be significant inflows or outflows of the underlying asset, and when they are too small, there will be zeros.

Nevertheless, April 16 was the third trading day in a row with an outflow as a net aggregate of $58 million left spot Bitcoin ETFs. This was due to a tiny inflow of $25.8 million for BlackRock (IBIT) and outflows from GBTC and ARKB.

The underlying asset, BTC, recovered marginally, briefly reclaiming $64,000 during the Wednesday Asian trading session, but slipped in the following hours.

The first quarter of 2024 witnessed over $824 million across 67 hacks as bad actors became more active in targeting high-profile individuals and projects.

According to the latest Hacken report shared with CryptoPotato, breaches in access control emerged as the most frequent category of hacks in terms of both frequency and financial impact, with $682 million being siphoned away. This constituted 83% of the total funds stolen during Q1 2024, spread across 26 separate incidents.

Access Control Breaches Reign

Four major incidents alone comprised 66% of the total losses. These included the $290 million breach at the gaming platform Playdapp, the $112 million incident involving Ripple co-founder Chris Larsen’s wallet hack, the $80 million hack of the Orbit chain bridge, and the $63 million exploit of Munchables, a Web3 gaming protocol on Blast.

Each of these breaches was characterized by unauthorized access, which essentially highlighted access control breaches as the most impactful exploit type during Q1 that allowed hackers to infiltrate critical system components.

Token projects also bore the brunt of hacking activity, with 19 reported incidents, followed by other projects at 10 incidents and lending protocols at 9 incidents. Gaming platforms, led by Playdapp’s substantial losses, suffered the most significant financial hits, followed by Munchables.

Breached wallets belonging to notable individuals, DAOs, tokens, bridges, and CeFi platforms constituted the second-largest category of losses, exemplified by incidents involving figures like Chris Larsen, Jeffrey Zirlin, and AirDAO.

Ray of Hope?

Despite the staggering losses during the first quarter, Hacken found that approximately $444 million was successfully recovered or frozen from various hacks and exploits, equivalent to 54% of the amount stolen. The firm noted that such a recovery effort marks a notable advancement in the industry’s responsiveness to such incidents.

Measures like hackers returning funds for bounties, as seen in the Seneca Protocol hack and Dolomite case, and intervention by white hat hackers, such as @coffeebabe_eth disrupting and returning funds in the Blueberry protocol hack, contributed to this recovery.

The proactive steps taken by project teams and white hat hackers played a crucial role in recovering stolen funds and minimizing further disruptions. While the total amount hacked in this period was substantial, recovering more than half of the stolen funds represents a significant positive development for security and resilience in the industry.

While speaking to CryptoPotato, Edgar Pavlovski, Hacken’s Senior Blockchain Researcher, explained,

“The beginning of this year spawned more of the same – losing control of one’s private key remains the largest vector of attack, accounting for 83% of all funds lost. On the bright side, more than half of all stolen funds were either returned or frozen. This represents big advancement compared to previous years, and we expect this dynamic to continue improving over time.”

TL;DR

• Ripple’s Chief Legal Officer touched upon the recent rumors of a settlement between the company and the US SEC, outlining key court dates set for April and May.
• The trial between the entities is set to begin on April 23 and could significantly influence the future price of XRP and the broader cryptocurrency market.

Are the Enemies About to Shake Hands?

An important event related to the legal spat between Ripple and the United States Securities and Exchange Commission (SEC) recently hinted that a settlement between the two entities could be just around the corner.

As CryptoPotato reported, both parties had a final pretrial conference before Judge Netburn on April 16. The procedure is a court hearing where a prosecutor and a defense attorney meet to discuss whether a lawsuit should go to trial or be resolved via a mutual agreement.

Stuart Alderoty – Chief Legal Officer of Ripple – rejected the rumors that a settlement is in the cards, outlining the next vital dates in the dispute. He clarified that the company will file its response to the SEC’s request for penalties by April 22, whereas the regulator’s reply should come by May 6.

“There is no final pretrial conference because the SEC dismissed the charges against Brad Garlinghouse and Chris Larsen,” Alderoty concluded.

Waiting for the Trial

The final chapter of the lengthy lawsuit between Ripple and the US securities regulator is a trial scheduled for next week (April 23). Some believe the firm will enter it with the upper hand, having secured three vital (yet partial) court victories throughout 2023.

A positive outcome for Ripple might trigger a bull run for XRP, whereas the opposite scenario could hamper the progress of the crypto industry and lead to the implementation of stringent rules.

Those willing to explore the details of the legal battle and how exactly it may impact the asset’s valuation, feel free to take a look at our latest dedicated video below: