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SEC Rejects VanEck Spot Bitcoin Trust Proposal

by Blockchain NewsMarch 11, 2023

The United States Securities and Exchange Commission has denied a proposal by investment manager VanEck for the creation of a spot Bitcoin trust, a financial product that would allow investors to trade Bitcoin on regulated exchanges. This marks the latest instance of the SEC denying every application for a spot Bitcoin trust, with almost 20 such applications having been filed over the last six years.

In a statement, SEC Commissioners Mark Uyeda and Hester Peirce criticized the Commission’s decision and alleged that it was using a different set of criteria to evaluate spot Bitcoin trusts as compared to other commodity-based exchange-traded products (ETPs). The statement reads, “In our view, the Commission is using a different set of goalposts from those it used—and still uses—for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate.”

The SEC’s decision comes amidst increasing institutional interest in Bitcoin and cryptocurrency investments, with Bitcoin recently reaching all-time highs in price. However, the SEC has been hesitant to approve financial products based on cryptocurrencies due to concerns about market manipulation, volatility, and fraud.

The proposed spot Bitcoin trust would have allowed investors to trade Bitcoin on regulated exchanges, providing greater accessibility to the cryptocurrency market. However, the SEC’s decision means that investors will continue to be limited in their ability to invest in Bitcoin through regulated channels.

VanEck had previously attempted to launch a Bitcoin ETF (exchange-traded fund) in 2017 but withdrew its application after facing resistance from the SEC. The investment manager had hoped that its proposal for a spot Bitcoin trust, which would have required less regulatory approval than an ETF, would have been more successful.

Despite the SEC’s decision, Bitcoin and other cryptocurrencies remain popular investments among retail and institutional investors. However, the lack of regulatory oversight and potential for market manipulation in the cryptocurrency market continues to be a concern for regulators and investors alike. The denial of VanEck’s proposal for a spot Bitcoin trust highlights the ongoing debate over how best to regulate and integrate cryptocurrency investments into traditional financial systems.

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DeFi Funding Skyrockets 190 in 2022

by Blockchain NewsMarch 6, 2023

The world of digital finance has seen a major shift in investments in recent years, with decentralized finance (DeFi) emerging as a clear winner in 2022. According to a report by CoinGecko, investment in DeFi projects skyrocketed by a staggering 190% in 2022, with digital asset investment firms pouring $2.7 billion into this sector alone. In contrast, investments in centralized finance (CeFi) projects plummeted by 73% over the same time period, with just $4.3 billion invested.

This trend is particularly striking given that overall crypto funding figures fell from $31.92 billion in 2021 to $18.25 billion in 2022, due to the market shifting from bull to bear. Despite this downturn, DeFi investment saw a near three-fold increase, potentially pointing to it as the new high-growth area for the crypto industry. The report also suggests that the decrease in funding towards CeFi could be an indicator that the sector has reached a degree of saturation.

According to CoinGecko’s report, the largest DeFi funding in 2022 came from Luna Foundation Guard’s (LFG) $1 billion sale of LUNA tokens in February. This was followed by Ethereum-native decentralized exchange (DEX) Uniswap, which raised $164 million, and Ethereum staking protocol Lido Finance, which raised $94 million.

Meanwhile, FTX and FTX US were the largest recipients of CeFi funding, having raised $800 million in January 2022, accounting for 18.6% of CeFi funding in that year alone. However, both crypto exchanges later collapsed and filed for bankruptcy just 10 months later.

The report also noted that blockchain infrastructure and blockchain technology companies raised $2.8 billion and $2.7 billion, respectively, making them other areas of significant investment. This trend has remained strong over the last five years, according to CoinGecko.

Henrik Andersson, the chief investment officer of Australia-based asset fund manager Apollo Crypto, says his firm is currently focusing on four specific sectors within crypto. The first is “NFTfi,” a combination of DeFi and NFTs that includes NFT projects using DeFi to implement various trading strategies to earn passive income, or long or short-trade NFT projects, among other things.

Overall, the rise of DeFi investment is a clear indication of the rapidly changing landscape of digital finance. As the market continues to evolve, it will be interesting to see how DeFi and CeFi continue to compete and evolve, and what other trends and innovations emerge in this exciting and ever-changing industry.

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Tagged : Cefi / Coingecko / CRYPTO FUNDING / DeFi / Investment / News

After slipping to lows of $15.5K amid FTX’s liquidity crunch, Bitcoin (BTC) gained momentum due to better-than-expected consumer price index (CPI) numbers released by the U.S. Bureau of Labor Statistics.

Crypto and market education platform IncomeSharks tweeted:

“Bitcoin has an easy path back to $20k as Stocks pushing up and positive CPI numbers.”

Bitcoin was up by 3.78% in the last 24 hours to hit $17,281 during intraday trading, according to CoinMarketCap.

The CPI surge was lower than expected because it rose by 0.4% in October, the lowest since January 2022. The U.S. Bureau of Labor Statistics pointed out:

“The all items index increased 7.7 percent for the 12 months ending October, this was the smallest 12-month increase since the period ending January 2022. The all items less food and energy index rose 6.3 percent over the last 12 months … all of these increases were smaller than for the period ending September.”

The lower CPI numbers triggered a bullish reaction in the BTC market because this might mean that the Federal Reserve (Fed) will ease interest rate hikes, which have been detrimental to the crypto ecosystem.

The Fed has been increasing interest rates to the tune of 75 basis points (bps), and this is one of the primary factors hindering a significant leg up for cryptocurrencies.

Despite the positive CPI numbers, the crypto market is still not out of the woods yet as bears continue to bite. Market insight provider Material Indicators explained:

“CPI was lower, Jobless Claims were higher. FireCharts shows the crypto market’s initial reaction to a beat on the forecasted economic numbers. Bear Market Rally is still alive BTC.”

Source: MaterialIndicators

The collapse of FTX, one of the leading crypto exchanges, has also made the digital asset space shaky.

Reportedly, the liquidity issue facing FTX might have emanated from the exchange’s CEO, Sam Bankman-Fried, secretly transferring at least $4 billion to boost its trading arm Alameda Research, with part of the funds being customer deposits.

Image source: Shutterstock

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Tagged : #BTC / Bitcoin / Cpi / Crypto / Cryptocurrencies / FTX / Investment / Market Analysis / PRICE ACTION

Indonesia Plans to Strengthen Security for Crypto Investments

by Blockchain NewsNovember 10, 2022

Indonesia plans to improve security for cryptocurrency investments in the country.

The Financial Service Authority (OJK) of Indonesia will oversee the regulation, supervision and oversight of crypto investments to improve protection for investors, the Southeast Asian country’s minister said on Thursday.

The cryptocurrency sector in Indonesia is currently under the joint supervision of the Trade Ministry and the Commodity Futures Trading Regulatory Agency.

Finance Minister Sri Mulyani Indrawati put forward the new plan to improve security as part of financial sector legislation that is being debated in parliament.

Cryptocurrency in Southeast Asia’s largest economy has witnessed a boom in crypto investments, but using such assets as means of payment is illegal in Indonesia. However, cryptocurrency transactions for investment purposes are allowed in the commodities market.

According to Sri Mulyani, there were 15.1 million cryptocurrency investors in the country as of June. The number is a massive rise from just 4 million in 2020.

Sri Mulyani told a parliamentary hearing, “we need to build a mechanism of supervision and investor protection that is quite strong and reliable, especially for investment instruments that are high risk.”

She added that the new bill would empower OJK to regulate and supervise “digital asset activities, including crypto assets and financial sector technology innovation.”

Indonesia also announced in late Sept about new rules for crypto asset exchanges.

The South Asian country’s trade ministry is planning to issue new rules to govern crypto exchanges that will require two-thirds of the board of directors and commissioners to be Indonesian citizens and live in Indonesia, a deputy minister said Tuesday.

This change has come about due to the financial issues faced by cryptocurrency exchange Zipmex as it has currently stopped users from withdrawing funds.

“We don’t want to give permits (to exchanges) carelessly, so only for those that meet the requirements and are credible,” deputy trade minister Jerry Sambuaga told reporters after a parliamentary hearing.

Sambuaga added that the ministry’s Commodity Futures Trading Regulatory Agency (Bappebti) would issue the new rule soon.

However, a timeframe has not been provided.

According to a document issued by the ministry, the new rule will require will also require an exchange to use a third party to store client funds and prohibit exchanges from re-investing stored crypto assets.

Didid Noordiatmoko, acting head at Bappebti, told the parliamentary hearing that ensuring two-thirds of the board were Indonesians based in the country “could prevent the top management running away when a problem hits the exchange.”

The country’s performance in terms of crypto transaction taxes has also improved.

Since the rollout of fintech and crypto transaction taxes in May, Indonesia has amassed nearly $6.8 million, according to the nation’s tax compliance special staffer Yon Arsal.

The Indonesian finance ministry imposed a value-added tax (VAT) of 0.1% on crypto-assets purchases on May 1 this year. While the Indonesian administration decided to tax crypto transactions based on surging popularity among local investors.

Furthermore, crypto interest on Indonesian soil has skyrocketed since the onset of the COVID-19 pandemic. The number of crypto owners stood at 11 million in 2021.

Image source: Shutterstock

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Tagged : Asia / Blockchain / Crypto / Indonesia / Investment / Regulation

Is Bitcoin Gearing Up to Exit the Current Bottom?

by Blockchain NewsNovember 1, 2022

Since Bitcoin (BTC) has been trading above the psychological price of $20K, Glassnode has released its weekly on-chain report titled “Hammering Out The Bottom,” scrutinizing the stakes and the risks that may lay on the road ahead.

The market insight provider stated:

“Bitcoin has rallied back above the $20k level this week, pushing off a low of $19,215, and trading as high as $20,961. After consolidating in an increasingly tight range since early September, this is the first relief rally in many months.”

Source: Glassnode

Bitcoin was up by 6.6% in the last seven days to hit $20,626 during intraday trading, according to CoinMarketCap.

With the realized price being the average acquisition price per coin, Bitcoin is presently approaching the underside of the realized price set at $21,111. A break above it would signify notable strength.

Source: Glassnode

Redistribution of wealth continues to happen

During the Bottom Discovery phase, diminishing investor profitability usually triggers the redistribution of coin wealth because weaker hands capitulate into severe financial pain.

Using the UTXO Realized Price Distribution (URPD) indicator, Glassnode noted that more consolidation and duration may still be required in the current bear market because coins changing hands are lower than the 2018-2019 bottom discovery phase where 22.7% of total supply was redistributed.

The market insight provider pointed out:

“Performing the same analysis in 2022, we can see that around 14.0% of supply has been redistributed since the price fell below the Realized Price in July, with a total of 20.1% of supply now having been acquired in this price range.”

Even though Bitcoin is getting ready to exit the bottom, the bear-to-bull transition has not completely formed because of the lack of a convincing influx of new demand.

Meanwhile, crypto trading firm Cumberland recently highlighted that Bitcoin volume remained absolutely massive given that BTC derivatives worth approximately $50 billion were being cleared on crypto exchanges daily, Blockchain.News reported.

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Tagged : #BTC / Analysis / Bitcoin / Crypto / Glassnode / Investment / Market / PRICE ACTION

Crypto Firm Q9 Capital Wins Dubai’s Regulatory Approval for Provisional Virtual Asset

by Blockchain NewsOctober 27, 2022

Crypto investment platform Q9 Capital has received regulatory approval for a provisional virtual asset (VA) from Dubai’s Virtual Asset Regulatory Authority (VARA), the company announced.

The entry into the UAE is part of the company’s expansion efforts and aims to acquire a full operating license in accordance with VARA requirements.

“Q9 aims to make a meaningful contribution to the VARA ecosystem as an engine for crypto product creation and execution in a regulated environment,” the company said.

VARA is the world’s first independent regulator for virtual assets.

Following the approval, investors can create and execute products and strategies on Q9’s platform. Furthermore, investors can build and access systematic investment portfolios and white-labelled offerings within VARA’s framework. The company said that the global distribution of these portfolios and offerings will be conducted in an “automated, transparent, regulated and compliant manner.”

Q9 Capital is a crypto investment management platform which helps crypto and TradeFi firms to “expand their offerings, distribute innovative products and simplify operations for enhanced innovation.”

The company’s management system allows investors to build, customize and fully-automate systematic portfolios. They can do so by using a wide product range and simultaneously accessing the entire market.

In Dubai, after winning a full operating license, Q9 will gain access to run its key features to help crypto and TradeFi firms by extending products and services to qualified investors and financial service providers.

Furthermore, Q9 plans to set up a regional hub in Dubai to expand and develop its business in the region and globally.

Besides gaining provisional approval in Dubai, other registrations for Q9 include Hong Kong.

According to Blockchain.News, Dubai is one of the most active influencers among gulf nations.

While many state actors may see it as a threat, many others are embracing the opportunities it brings. Dubai comes off as one of the latter, with the slew of licenses being granted to cryptocurrency exchanges today.

Besides Q9, other companies, such as the crypto trading platform OKX have also been given the green light to operate in Dubai.

As announced by the crypto trading platform, the Dubai Virtual Assets Regulatory Authority (VARA) granted it a provisional virtual assets (VA) license in July, an allowance that will let it offer targeted crypto products to qualifying investors.

Besides OKX, the duo of Binance and Huobi have also tapped related licenses to operate in Dubai. The implication of this is not just for the benefit of the exchanges. The masses will also have a unique diversity in their payment options, while the government will be able to generate revenue in the form of taxes.

Besides its role as one of the world’s most visited tourist locations, Dubai aims to become the financial epicentre of the Middle East, then the world. While the growth of digital assets in the region can be attributed to the bullish nature of VARA, chances are that Dubai will eventually become the most sought-after rallying point for crypto exchanges in the near term.

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Tagged : Bitcoin / Blockchain / Crypto / Dubai / Exchanges / Investment / Q9CAPITAL

92% High-Net-Worth Individuals in SG & HK Are Interested in Digital Assets: KPMG

by Blockchain NewsOctober 25, 2022

To learn crypto perspectives from family offices (FOs) and high-net-worth individuals (HNWIs) in Singapore and Hong Kong, KPMG China and Aspen Digital conducted a study dubbed “Investing in Digital Assets” and discovered that growing interest among this group.

Per the report:

“Despite the volatility in the digital asset market in the past two years, FOs and HNWIs are keen to invest in the sector. The survey found that 92 percent of respondents were interested in digital assets, with 58 percent of FOs and HNWIs already investing and 34 percent planning to do so.”

The growing crypto interest among FOs and HNWIs in Singapore and Hong Kong was being driven by portfolio diversification and high return prospects.

Confidence in digital assets was also being spurred by heightened participation by mainstream institutional investors.

“Family offices and high-net-worth individuals in Hong Kong and Singapore have embraced this new asset class, with more than 90 percent of our survey respondents already investing in the space or planning to do so,” according to the study.

Bitcoin (BTC) and Ethereum (ETH) dominated the group’s investment portfolio. Furthermore, growing interest in decentralized finance (DeFi) and non-fungible tokens (NFTs) was also noted.

Direct equity investment emerged as the primary source of funding for crypto service providers. Matthew Lam, Aspen Digital’s head of research, pointed out:

“We have observed that family offices/HNWIs prefer direct equity investments, while crypto-focused venture capital firms favour equity plus token warrant approach to invest in digital asset service providers.”

Nevertheless, respondents cited inaccurate valuation and the changing global regulatory environment as the biggest hurdles to crypto investment.

For instance, all virtual asset service providers (VASPs) in Hong Kong will be required to apply for an operational license by March 2024. Moreover, Singapore is also eyeing to broaden its crypto regulation scope.

Meanwhile, Hong Kong recently showed its intention to legalize crypto trading after launching several legal initiatives related to emerging technologies in the cryptocurrency industry, Blockchain.News reported.

Image source: Shutterstock

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Tagged : Asia / Crypto / Family Offices / FO / HNWIS / Hong Kong / Investment / Research / Singapore

Are Bitcoin Miners Earning Minimum Reward as Hash Price Plunged to Historic Lows?

by Blockchain NewsOctober 24, 2022

The revenue of Bitcoin (BTC) miners continues to dwindle, given that hash price has nosedived to historic lows of $66,500 per Exahash, according to Glassnode.

The market insight provider explained:

“The Bitcoin Hash Price has reached an all-time-low of $66,500 per Exahash. This means that BTC miners are earning the smallest reward relative to hashpower applied in history, and likely puts the industry under extreme income stress.”

Source: Glassnode

Therefore, this indicates that miners are earning the lowest revenue in Bitcoin’s 13-year journey.

Furthermore, this is happening as the mining difficulty in the Bitcoin network hits an all-time high (ATH). Glassnode added:

“BTC mining difficulty just reached an ATH of 158,208,051,864,292,013,637,632. Previous ATH of 152,947,196,320,564,012,646,400 was observed on 23 October 2022.”

Source: Glassnode

Mining difficulty is a metric of how hard or easy it is to generate new Bitcoin and is often impacted by the number of machines plugged into the network.

High mining difficulty implicates enhanced network security because more computing power is required to mine a similar number of blocks as before.

78% of BTC Supply has been immobile for More Than 6 Months

With the immobile Bitcoin supply reaching ATH, it seems some hodlers have remained steadfast in their objective.

Market analyst Will Clemente pointed out:

“A new all-time high 78% of Bitcoin supply has not moved in at least 6 months. Pretty remarkable in the face of the worst macroeconomic backdrop in recent history, geopolitical uncertainty, and WW3 fears. There is a group of seriously convicted hodlers out there.”

Source: Glassnode

Hodling is one of the favoured strategies in the Bitcoin market because coins are stored for future purposes other than speculation.

For instance, hodled BTC recently hit a 5-year high, Blockchain.News reported.

Meanwhile, Bitcoin price was hovering around $19,315 during intraday trading, according to CoinMarketCap.

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Tagged : #BTC / Analysis / Bitcoin / Crypto / Cryptocurrencies / Investment / Market / Mining / PRICE ACTION