Bitcoin’s long-standing whales, once staunch advocates of self-custody, are now increasingly adjusting their strategies to embrace the conveniences offered by traditional finance. Recently, a BlackRock executive disclosed that numerous early Bitcoin investors are discreetly exchanging parts of their holdings for exchange-traded funds (ETFs), thus gaining access to enhanced wealth management tools.

While spot Bitcoin and ETFs have historically catered to distinct groups of investors, onchain analytics indicate that the burgeoning popularity of spot ETFs could be impacting self-custody. Analyst Willy Woo has noted that self-custodied Bitcoin has dipped from a 15-year upward trend as ETF adoption rises.

In this installment of Crypto Biz, we delve into the movement of Bitcoin’s whales toward traditional finance, Ripple’s recent market maneuvers, Galaxy Digital’s impressive third-quarter results, and Wise’s exploration into stablecoin products.

Bitcoin Whales Embracing Traditional Finance

Some of the earliest Bitcoin adopters, having built significant holdings over time, are now switching their spot positions for BlackRock’s Bitcoin ETFs. This decision comes at the cost of relinquishing their private keys, but it allows them to integrate into the traditional financial ecosystem.

Robbie Mitchnick, BlackRock’s head of digital assets, stated that their management has facilitated transactions worth over $3 billion in these conversions. Many early Bitcoin stakeholders are recognizing the advantage of managing their exposure within existing financial advisory services or private banking relationships.

Mitchnick also noted that a recent US Securities and Exchange Commission rule change has accelerated this trend, permitting in-kind transactions for Bitcoin ETFs, allowing for direct exchanges of ETF shares for Bitcoin instead of cash.

Currently, BlackRock’s iShares Bitcoin Trust (IBIT) stands as the leading option in the spot Bitcoin ETF marketplace, currently holding over $88 billion in net assets.

Inflows into spot US Bitcoin ETFs have surged this year. Source: Bitbo

Ripple-Backed Evernorth Goes Public

Evernorth Holdings, a digital asset firm supported by Ripple Labs, has announced plans to go public through a merger with Armada Acquisition Corp. II, paving the way for the establishment of a new XRP-focused treasury entity.

This transaction aims to generate over $1 billion in proceeds, which includes $200 million contributed by Japan’s SBI Holdings. Additional investments will be sourced from Ripple, Kraken, Pantera Capital, and GSR. Upon successful completion of the merger, the company will trade on Nasdaq with the ticker symbol XRPN.

Evernorth’s CEO, Asheesh Birla, mentioned that the objective is to accelerate XRP adoption as interest in digital asset treasuries grows. However, some analysts have raised concerns regarding potential challenges these treasuries might face given the current state of altcoin prices.

David Bailey, the CEO of Nakamoto, commented, **“Toxic financing, unsuccessful altcoins rebranded as DATs, and too many failing ventures without a clear vision have muddled the marketplace narrative.” **Source: Asheesh Birla

Galaxy Digital Reports Strong Earnings

Asset manager Galaxy Digital has released its third-quarter earnings, highlighting significant growth driven by increased trading activity and heightened institutional demand for cryptocurrency services. They facilitated a remarkable transaction involving 80,000 BTC for an unidentified client.

Galaxy recorded a net profit of $505 million for the quarter, with adjusted earnings reaching $629 million, bolstered by gains in their digital asset operations and investments. With a total equity of $3.2 billion, including $1.9 billion in cash and stablecoin holdings, trading volumes have surged 140% compared to the prior quarter.

As reported by Cointelegraph, Galaxy managed a client sale of 80,000 BTC back in July — a transaction valued at around $9 billion — which was part of the investor’s broader estate planning strategy.

Source: Galaxy

Wise Considering Stablecoin Expansion

Global payments giant Wise seems to be venturing into stablecoin products. The $10 billion fintech is looking to hire a product leader focusing on stablecoins.

Matthew Salisbury, Wise’s product director, announced a job opening on LinkedIn for a role based in London aimed at aiding the company’s push into digital assets. The listing specifies that ideal candidates should have experience with direct-to-consumer products in the digital asset domain.

Salisbury wrote, **“If you’ve developed wallets or payment solutions based on stablecoins and wish to do so at Wise, either apply through the ad or DM me.” ** This move toward stablecoins aligns well with Wise’s core business, which is recognized for offering affordable international money transfers to over 160 countries.

Source: Matthew Salisbury

Crypto Biz serves as your weekly update on the business aspects of blockchain and cryptocurrency, delivered to your inbox every Thursday.