Welcome to the latest edition of our Market Roundup, where we cover the past week’s highlights in the rapidly evolving world of blockchain and decentralized technologies.
(as of 10:30 AM Singapore Time, October 20, 2023)
Bitcoin spiked this week on false news that an application submitted by BlackRock for a spot BTC exchange-traded fund (ETF) was approved in the United States. BTC went up by as much as 10% (compared to 24 hours prior) after Cointelegraph tweeted about the rumor, nearly touching US$30,000. While its price has since adjusted down, BTC is still 6.91% higher than a week ago.
Over the several hours after Cointelegraph’s tweets, nearly US$79 million worth of short positions were liquidated, according to CoinGlass data.
If nothing else, the brouhaha demonstrates immense interest in BTC, with traders waiting to pounce on positive news.
A spot BTC ETF has immense appeal for traditional institutional and retail investors. It would provide exposure to the largest cryptocurrency by market capitalization without having to manage wallets and the related storage and security issues.
Rumors aside, the scales seem to be tipping in favor of those who support an ETF that invests directly in Bitcoin. The US Securities and Exchange Commission (SEC) has opted not to appeal a ruling issued in August. At the time, a court decided that the regulator was wrong to reject an application from Grayscale Investments to convert its US$16.7 billion Bitcoin Trust into an ETF.
That’s not to say the conversion is in the bag. The SEC contends that bitcoin trades on unregulated exchanges, and is prone to fraud and manipulation. Including Grayscale, 11 firms have filed spot BTC ETF applications in the US. All are still pending a decision.
Meanwhile, some analysts believe that approvals may come in January and set off a bull run. This space is worth watching closely.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
- In an adaptation to emerging financial trends, Ferrari has commenced accepting cryptocurrency as a valid form of payment for its luxury vehicles in the United States, with plans to expand this payment option to Europe by early 2024. The decision aligns with demands from its affluent clientele, some of whom have substantially invested in digital currencies. The initiative facilitates purchases using BTC, ETH, and USDC, utilizing BitPay as the payment processor to shield dealers from the notorious volatility of cryptocurrency markets by converting payments into traditional currency instantaneously. Ferrari’s vehicles start at US$211,000.
- Mastercard, collaborating with the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre, has advanced its central bank digital currency (CBDC) pilot project, achieving a noteworthy milestone by facilitating a live transaction purchasing a non-fungible token (NFT) on the Ethereum blockchain using a “wrapped” CBDC. Developed alongside financial service company Cuscal and blockchain platform Mintable, the technology aims to render CBDCs interoperable across diverse blockchain networks, thereby potentially broadening consumer choice and fostering collaboration between public and private networks in the digital currency sphere. The pilot assures legal claims on the Reserve Bank of Australia and is nested within Mastercard’s broader Multi-Token Network initiative, which aspires to leverage blockchain technology to drive mainstream adoption of digital currencies by enabling use cases with various financial entities.
- The FTX bankruptcy estate has staked around US$122 million in Solana (SOL) and 3,200 Ethereum (ETH) valued at around US$5 million, as recent on-chain transfers show. These moves were tracked to Figment, a staking validator catering to institutional clientele, and the wallets involved were linked to Alameda Research, FTX’s affiliate trading company. Previously, FTX received court authorization to liquidate up to US$3.4 billion in various crypto assets, including SOL and ETH, as part of its bankruptcy proceedings. This recent staking action offers a way to generate passive income from the held assets. The estate has the option to sell US$100 million worth of crypto each week, with the possibility of increasing the limit to US$200 million.
- Despite the FTX estate’s enthusiasm to stake ETH and participate in network validation, general demand dried up, with the queue to become a validator hitting zero early this week. The number of parties in line to become validators has since gone up to the mid-hundreds, but that’s far from the peak of 96,500 in mid-June. It takes 32 ETH to operate a validator on the Ethereum network, currently worth more than US$50,000, and up to 3,600 validators can enter or exit the validation process every 24 hours. Anyone seeking passive yield may be seeking higher returns through instruments such as short-term US Treasury notes, which currently offer 5.35% interest, higher than the 3.5% in ETH given to validators on Ethereum.
Stories You Might Have Missed
- Ripple posted a new job listing for a “shareholders communications senior manager,” leading to speculation that it is heading toward an initial public offering (IPO). Some observers argue this position could be for liaising with private shareholders. Ripple has yet to issue a statement about the matter. As a company develops a range of payment and remittance products, there have long been discussions about the possibility of Ripple going public. For now, there are few cryptocurrency and Web3 companies whose shares are publicly traded. Most that are on bourses have crypto mining as their core business. It isn’t clear how an IPO would impact the price of Ripple’s token, XRP.
- Tether, a leading stablecoin issuer, has elevated Paolo Ardoino to the position of CEO, succeeding Jean-Louis van der Velde, who will assume an advisory role while maintaining his CEO position at Bitfinex. Ardoino, having significantly contributed to Tether’s monumental growth from a market cap that was under US$100 million to US$83.5 billion since becoming CTO in 2017, envisions propelling the company into becoming a “tech powerhouse” that will mold the future of finance. Ardoino’s strategic focus includes broadening the influence of the USDT in global trade and ensuring its utility across emerging markets.
- In a brief and unexpected incident, cryptocurrency wallet MetaMask was momentarily pulled from the Apple App Store in the United States, only to be reinstated within hours. The temporary removal was attributed to “an internal operational error” by a spokesperson from MetaMask and was not a deliberate act by Apple. While the wallet app was inaccessible, MetaMask lead product manager Taylor Monahan and ConsenSys’ global public relations director Elo Gimenez appealed to the crypto community to report any false MetaMask apps appearing in the App Store, emphasizing that protecting users from potentially malicious apps was a priority. The occurrence was not related to any security concerns or malicious activities, and no user action or compromise was involved. Other cryptocurrency wallets like Coinbase, Uniswap, and Binance remained available in the App Store during the incident.
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