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.
The prices of most top cryptocurrencies rapidly climbed early in the week, then traders took profits on Friday to bring the market back down to roughly where it was seven days ago.
(as of 9:30 AM Singapore Time, September 1, 2023)
BTC touched US$28,000 on Tuesday after news broke about Grayscale’s win against the United States Securities and Exchange Commission (SEC). In June 2022, Grayscale sued the SEC when the regulator prevented it from converting its Grayscale Bitcoin Trust into an exchange-traded fund (ETF).
We’ve covered this in our news recaps before: an ETF like the one proposed by Grayscale would give investors a way to gain exposure to Bitcoin without owning any crypto. The SEC said it believes spot bitcoin ETFs are susceptible to manipulation, and it has yet to approve any spot Bitcoin ETF applications, but has given the green light to bitcoin futures ETFs, which track agreements to buy or sell BTC at predetermined prices.
After the ruling on Tuesday, the SEC has 45 days to file an appeal.
Grayscale is not alone in its drive to launch a spot bitcoin ETF. BlackRock, Fidelity, and other major names have all submitted proposals for spot bitcoin ETFs to be listed on the Nasdaq.
Notably, bitcoin believers managed to scoop up US$388 million worth of BTC in the months leading up to the ruling. Those who accumulated enjoyed profits after Grayscale’s win was announced.
The euphoria from Tuesday was tempered later in the week when the SEC said it needs more time to make a call on the applications put forward by three firms — WisdomTree, Valkyrie, and Invesco. After the announcement, prices dropped to about the same level as before judges ruled in Grayscale’s case.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
- In 2022, stablecoin transactions surged to a remarkable $11 trillion, nearly rivaling Visa’s $11.6 trillion transaction volume, according to a report by Brevan Howard Digital. This analysis, based on blockchain transactions, revealed that approximately 5 million active stablecoin addresses emerge weekly, with three-quarters of these addresses handling transactions of less than US$1,000, suggesting a predominance of small retail users. Notably, Tron and BNB Chain dominated the stablecoin landscape, accounting for 75% of transactions and 41% of total volume. This concentration raises questions about the reliability of the data, given Tron’s alleged association with wash trading and the ongoing scrutiny faced by its founder, Justin Sun. The report also pointed out that Tron and BNB Chain primarily utilize Tether (USDT), while other networks lean towards USD Coin (USDC). Despite the impressive figures, the potential influence of wash trading and regulatory concerns cast a shadow over the accuracy and legitimacy of the observed trends.
- Shibarium, the Layer 2 blockchain developed by the creators of the Shiba Inu (SHIB) memecoin, has resumed fund withdrawals on its Ethereum bridge after a brief suspension due to scalability concerns. Originally launched on August 16, the mainnet and bridge withdrawals were halted due to a surge in transactions, leaving user funds inaccessible. The team has resolved the issues, allowing users to withdraw assets like ETH, SHIB, LEASH, and WETH, with wait times of 45 minutes to 4 hours. Withdrawals of the native BONE token are also possible, although they may take up to 7 days. This move restores access to millions of dollars in trapped user funds and eases concerns within the community.
- Robinhood has extended its Web3 wallet’s support to the Bitcoin and Dogecoin networks, marking a significant expansion since its March launch. Initially introduced with Polygon compatibility, the wallet has steadily grown in functionality and accessibility. Notably, users can now conduct in-app swaps on Ethereum and access Layer 2 solutions like Arbitrum and Optimism. The wallet is available on iOS in 130 countries and aims to simplify DeFi complexities, catering to mainstream users. By incorporating Bitcoin and Dogecoin network support, along with upcoming plans to broaden access to other low-cost Layer 2 blockchains, Robinhood continues to emphasize self-custody while making crypto more accessible.
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- The US Securities and Exchange Commission (SEC) has filed charges against Impact Theory, a Los Angeles-based media and entertainment company, for conducting an unregistered offering of crypto asset securities via their NFT launch in 2021. The SEC argues that Impact Theory marketed their Founder’s Keys NFTs as investment opportunities in their business, categorizing them as investment contracts. Impact Theory raised approximately US$30 million by selling three tiers of NFTs — Legendary, Heroic, and Relentless — and promoted their NFTs with claims of building a significant entertainment brand akin to Disney. As part of the settlement, Impact Theory has agreed to a cease-and-desist order and will pay around US$6.1 million, including disgorgement, prejudgment interest, and a civil penalty. Additionally, the company will establish a “Fair Fund” to reimburse affected investors, while all unsold Founder’s Keys will be eliminated. The SEC’s charges underscore the requirement for proper registration of securities offerings, emphasizing the significance of compliance within the evolving NFT landscape.
- Western Union is diving into the cryptocurrency world, highlighting its commitment to innovation in the ever-evolving financial sector. The company’s CEO, Hikmet Ersek, recently disclosed efforts to integrate Ripple’s blockchain technology and its native coin, XRP. This includes exploring xRapid, a system that seamlessly merges XRP into payment platforms. Ripple confirmed their ongoing tests and solutions with Western Union, even as it faces legal challenges with the SEC over its token sales.
- Aside from being a frontrunner in the race for SEC approval for the first directly collateralized BTC ETF in the US, BlackRock also stands out as a prominent investor in Bitcoin mining. The company is the second largest shareholder in four of the top five publicly traded Bitcoin mining firms in the US: Riot Blockchain, Marathon Digital Holdings, Cipher Mining, and TeraWulf. Combined, these stakes are valued at over US$411 million as of August 2023.
- Hong Kong’s Financial Secretary Paul Chan Mo-po advocates embracing the potential of Web3, the next evolution of the internet, beyond just online entertainment, as a means to boost the economy. Chan allocated HK$50 million (US$6.4 million) in the 2023–24 budget to advance the Web3 ecosystem, emphasizing that this technology isn’t limited to virtual assets but can address challenges in finance, business, trade, supply chain management, and daily life. He highlighted the success of Web3 in accelerating the online entertainment industry through immersive experiences, citing the growth projections of the global online entertainment market. Chan leads a dedicated task force focused on responsible Web3 development and has already convened over 180 Web3-related firms in Cyberport, signifying a growing interest in this technology.
- Starting September 1, South Korean crypto exchanges are mandated to maintain at least 3 billion won (US$2.3 million) in reserve funds in bank accounts. The reserves must either equate to 30% of the daily average deposits (capped at 20 billion won) or 3 billion won, whichever is higher. This initiative, introduced to enhance consumer protections, is set by the Virtual Asset Real-Name Account Operation Guidelines from the Korea Federation of Banks. While major exchanges like Upbit and Bithumb are prepared to comply, smaller exchanges, especially those without fiat trading pairs, face challenges meeting this new requirement.
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