Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
After weeks of trading in the red, token prices rallied across the board this week, with BTC rising above US$30,000 on Thursday, the highest point since April. Some investors were heartened by BlackRock, the world’s largest asset manager with more than US$10 trillion worth of assets under management, applying to launch a Bitcoin exchange-traded fund (ETF), followed by firms like Invesco and WisdomTree doing the same.
(as of 1:30 AM UTC, June 23, 2023)
TradFi is moving into crypto in a more serious way than ever before. If any of these ETF applications are approved, it will enable anyone to invest in Bitcoin without managing crypto assets on their own, and other TradFi-developed crypto products would likely be released later.
It’s easy to read these developments as TradFi attempting to absorb crypto, but we believe that these entries signal that crypto is about to go mainstream in a significant way. Firms like BlackRock, Invesco, and WisdomTree are recognized names that investors know and trust, and they have the means to give investors around the world exposure to on-chain assets.
Besides, the fact that these firms are pursuing Bitcoin ETFs signifies that there is demand among their clients to invest in crypto. There’s no better measure that leads to the conclusion that millions of investors are about to benefit from the wealth-building opportunities that digital assets offer — if any of the ETF applications are approved.
Investing in crypto may become incredibly convenient soon, and crypto might be entering an exciting new phase.
- In a surprising turn of events, Good Gensler (GENSLR), a meme coin inspired by SEC Chair Gary Gensler, briefly outperformed the entire crypto market, doubling in value over the past month. This rally came at a time when the crypto market faced significant losses due to the SEC’s lawsuits against major players like Binance and Coinbase, causing a decline in the market value by over US$100 billion. Good Gensler, with its humorous take on the crypto villain, aims to foster a community that creatively expresses the need for a more crypto-friendly policy framework. However, it’s important to note that meme coins are highly volatile, and caution should be exercised when investing in them. By the end of this week, the price of GENSLR had receded, losing more than half its value.
- Etherscan, the Ethereum blockchain explorer, has introduced a new AI-powered tool called Code Reader that leverages OpenAI’s large language model. The tool allows users to gain insights into the source code of any smart contract by generating AI prompts and explanations for specific code sections or functions. Etherscan highlighted that this feature is particularly valuable for users interacting with smart contracts for the first time, as it provides a thorough understanding of their operations and functionality. Code Reader also enables users to explore code for integrating smart contracts with decentralized applications. Etherscan emphasized that the tool is in beta and cautioned users not to assume that all answers are correct, encouraging feedback for further improvement.
- Deutsche Bank, Germany’s largest bank with assets worth US$1.3 trillion, has reportedly applied for a digital asset custody platform license with the German finance regulator, BaFin. The bank has been working on the custody platform for over two years and aims to establish a “minimum viable product” while exploring client interest. This move reflects a significant shift in Deutsche Bank’s stance on digital assets, as it had previously described Bitcoin’s value as based on “wishful thinking.” Germany has generally been crypto-friendly, introducing legislation in 2019 to enable crypto custody and trading services. BaFin has already issued licenses for crypto custody to several institutions, including Coinbase Germany, Boerse Stuttgart Digital, and Finoa.
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- Hong Kong’s Cyberport, a government-backed digital hub, has attracted over 150 Web3 firms in the past year, according to Financial Secretary Paul Chan Mo-po. The influx of companies came after the Hong Kong government invested US$7 million to accelerate the development of Web3 with blockchain technology. Chan highlighted the government’s support for the sector, including allocating US$64 million in funding for the Digital Transformation Support Pilot Program to assist small and medium-sized businesses in implementing digital solutions. With a total of 1,900 enterprises hosted at Cyberport, Hong Kong continues to position itself as a major crypto and fintech hub, having recently introduced its own crypto legislation and receiving tacit approval from Chinese officials.
- Disgraced former crypto executive Do Kwon, wanted in the United States and South Korea on fraud charges, has been sentenced to four months in prison in Montenegro. Kwon, also known as Kwon Do-hyeong, along with another South Korean national, Han Chang-Joon, were found guilty of falsifying documents. The two men were arrested in March while attempting to board a flight to Dubai. Authorities seized multiple passports and identity cards from them. Kwon, the founder of the blockchain platform Terraform Labs, was charged by the US Securities and Exchange Commission for defrauding investors. He also faces fraud charges in South Korea. Kwon has denied the allegations and claimed they were politically motivated. The court’s decision can be appealed within eight days.
- Gemini, a New York-based crypto exchange, has announced plans to expand its operations in the Asia-Pacific (APAC) region to capture the “next wave of growth for crypto.” The company aims to establish itself outside of the US amidst increased regulatory actions against crypto exchanges in the country. Gemini will increase its headcount in Singapore, which will serve as the regional hub, to over 100 employees within the next year. Additionally, the exchange plans to open an engineering center in India. Currently, Gemini supports the Singapore dollar (SGD), Hong Kong dollar (HKD), and the Australian dollar (AUD) for cryptocurrency trading on its platform. The expansion reflects the company’s commitment to tapping into the potential of the APAC market.
- EDX Markets, a new crypto exchange backed by a consortium of traditional Wall Street firms including Charles Schwab and Citadel Securities, has launched and begun processing trades. This move poses a threat to platforms like Coinbase as it brings the traditional structure of the securities industry to cryptocurrency trading. EDX differentiates itself by focusing solely on the role of the exchange, unlike many crypto trading platforms that combine exchange, custodian, and broker functions. This separation of roles aligns with the calls made by US Securities and Exchange Commission (SEC) Chair Gary Gensler for mitigating conflicts of interest. The SEC recently sued Coinbase for allegedly operating as an unregistered securities exchange, broker, and clearing agency. EDX’s launch signifies a shift towards applying traditional market rules to the crypto industry, with prominent Wall Street backers indicating support for this new approach.
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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.