In a recent 13F filing with the Securities and Exchange Commission, the State of Wisconsin Investment Board disclosed substantial investments in various crypto entities, marking a significant foray into the digital asset space.

The Board revealed ownership of 2,450,400 shares of the iShares Bitcoin Trust (IBIT), a spot bitcoin exchange-traded fund managed by BlackRock, valued at approximately $99.2 million by the end of the first quarter of 2024. Additionally, the Board disclosed ownership of 1,013,000 shares of the Grayscale Bitcoin Trust (GBTC), valued at around $63.7 million.

Aside from bitcoin trusts, the Board’s crypto portfolio includes investments in leading cryptocurrency firms such as Coinbase, Marathon Digital, Riot Platforms, Block, Cipher Mining, Cleanspark, and MicroStrategy.

This significant move by the State of Wisconsin Investment Board underscores the growing institutional interest in digital assets. The Board, tasked with managing investments for public retirement and other trust funds in Wisconsin, has joined the ranks of institutional investors embracing cryptocurrencies as part of their diversified investment strategies.

BlackRock’s IBIT and Grayscale’s GBTC are prominent players in the spot bitcoin ETF market, commanding significant market share. The Board’s substantial investment in these ETFs reflects its confidence in the long-term potential of cryptocurrencies as an asset class.

Commentary from Bloomberg’s ETF analyst highlights the swift adoption of spot bitcoin ETFs by institutional investors. The Board’s quick entry into IBIT signals a departure from the usual timeline for institutional adoption, indicating growing confidence in the maturity and liquidity of crypto ETFs.

IBIT’s rapid growth and surpassing of previous ETF records underscore its significance in the evolving investment landscape. As institutional investors continue to explore opportunities in digital assets, the trajectory of spot bitcoin ETFs like IBIT will likely shape the future of crypto investment strategies.

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Galaxy Digital Holdings disclosed robust growth in revenue and profits for the first quarter, propelled by its mining operation’s exceptional performance amidst the cryptocurrency price surge.

The financial services firm focused on digital assets revealed that its net income surged to $421.7 million ($1.23 per share) in the quarter ending March, marking a remarkable 214% increase compared to the same period last year. This significant bottom-line growth was underpinned by a surge in revenue, which reached $259.7 million, up from $146.7 million year-on-year. These impressive results signal Galaxy’s recovery trajectory following a $1 billion net loss in 2022.

Breaking down the company’s business segments, Galaxy’s mining operation emerged as a key contributor, generating $31.5 million in revenue. This division’s robust performance was driven by a record hashrate of 5.7 exahash per second for mining transactions, demonstrating its resilience amidst market fluctuations. Notably, the mining operation’s revenue surge complemented similar increases recorded by Galaxy’s Global Markets and Asset Management divisions during the first quarter.

In April, Galaxy secured $125 million in funding, earmarked for expanding its trading operations and enhancing its mining infrastructure. This strategic move underscores Galaxy’s commitment to capitalizing on market opportunities and strengthening its position in the rapidly evolving digital assets landscape.

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Polymarket, a cryptocurrency-based prediction market platform, has successfully raised $45 million in a Series B funding round amid a surge in popularity leading up to the U.S. presidential election. The round was led by Peter Thiel’s Founders Fund, with notable contributions from Ethereum’s creator Vitalik Buterin, 1confirmation, ParaFi, and Dragonfly Capital, according to Polymarket founder Shayne Coplan, who communicated with CoinDesk via Telegram. The company’s valuation in this round was not disclosed.

This latest investment follows a previously undisclosed $25 million Series A funding round led by General Catalyst and includes a $4 million seed round from 2020, bringing Polymarket’s total raised funds to over $70 million. To support its next growth phase, Polymarket has appointed Richard Jaycobs as the head of market expansion, who previously held executive roles at traditional finance firms, including President of Cantor Exchange and CEO of The Clearing Corporation.

Polymarket is recognized as a leading platform for building prediction markets on cryptocurrency infrastructure. In these markets, participants place bets on the outcomes of real-world events within a specified timeframe, ranging from sports games to political events. For instance, a current market on Polymarket is gauging whether the U.S. Securities and Exchange Commission will approve a spot exchange-traded fund for Ethereum by May 31, with “Yes” shares trading at 16 cents, suggesting a 16% probability of approval.

These markets are touted not just as gambling venues but as tools for gaining a more accurate understanding of public sentiment and providing more reliable forecasts than traditional polls and punditry, a standpoint long advocated by economist Robin Hanson.

Despite a regulatory setback in 2022 that barred Polymarket from serving U.S. residents under a Commodity Futures Trading Commission settlement, the platform continues to see significant betting activity. This year alone, $202 million has been wagered on various events, with over $125 million staked on the presidential election. This exclusion from the U.S. market contrasts with Kalshi, the only CFTC-regulated prediction market, which faces potential regulatory challenges from the CFTC’s recent proposals to ban election-related bets, a rule that would not affect Polymarket.

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The Bitcoin network witnessed a steep 99% drop in daily Rune etchings, plummeting to just 157 Runes on Monday from a high of 14,700 in late April, as reported by Dune Analytics. This significant decline in the activity of the Rune etchings, which are part of a fungible token protocol, has dramatically decreased transaction fee income for Bitcoin miners.

On April 26, the network recorded a peak of 23,061 Rune etchings, but the recent slump has resulted in transaction fees from these etchings dropping to a mere US$3,835 on Monday. Despite this downturn, Rune transactions have remained a dominant force in Bitcoin network activity to date, with over 91,200 Runes etched on the Bitcoin blockchain.

The Runes protocol was launched on April 20, initially providing a substantial boost to miners’ earnings by generating significant transaction fees. This was particularly beneficial following the fourth Bitcoin halving event, which reduced the block subsidy to 3.125 BTC but was offset by increased transaction volumes from Rune etchings.

Developed by Ordinals creator Casey Rodarmor, the Runes protocol aims to efficiently utilize block space for creating fungible tokens, adhering to Bitcoin’s unspent transaction output (UTXO) model, offering a more streamlined approach compared to BRC-20s. However, some Bitcoin core developers have expressed concerns, criticizing the Runes protocol for potentially exploiting vulnerabilities within the Bitcoin network.

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The latest report from Bernstein reveals a notable 6% decline in Bitcoin (BTC) mining difficulty last week, marking the most substantial drop since the crypto winter of December 2022. This downturn is seen as a beneficial shift for miners, particularly those with lower operational costs.

According to analysts Gautam Chhugani and Mahika Sapra, this adjustment in mining difficulty reflects broader market dynamics post-Bitcoin halving, with higher-cost mining rigs being phased out due to escalating costs and lower Bitcoin prices. This has led to a decrease in the overall hashrate—the total computational power used in mining and processing transactions on Bitcoin’s proof-of-work blockchain.

The report highlights that the reduction in hashrate has allowed lower-cost miners to increase their market share by approximately 20 basis points since the halving. Companies like Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK), known for their low production costs and robust financial positions, are particularly well-placed to benefit. These companies are expected to continue consolidating their market share through both organic growth and mergers and acquisitions.

Bernstein also points out that a temporary stabilization in Bitcoin prices could advantage these efficient miners, allowing them to capitalize on their expansion strategies without the pressure of a rising hashrate. Furthermore, when Bitcoin prices eventually regain momentum, these miners are positioned to generate increased revenue due to higher production capabilities.

Despite the current fluctuations, Bernstein does not foresee a significant downturn in Bitcoin prices. They predict that the cryptocurrency will remain range-bound in the short term, with the potential for an upward breakout as spot exchange-traded funds (ETFs) begin to receive allocations from registered investment advisors (RIAs), wealth platforms, and other institutional investors.

Bernstein maintains an ‘outperform’ rating for CleanSpark and Riot Platforms, indicating a favorable outlook for these firms, while Marathon Digital (NASDAQ:MARA) holds a ‘market-perform’ rating, suggesting a more neutral expectation.

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