In markets

The resurgence of confidence in crypto markets continues, with Bitcoin hitting its highest price in more than a year on news BlackRock had resubmitted its application for a Bitcoin ETF. Bitcoin is currently changing hands at A$46,580 (US$31.1K), which is 2.9% up for the week, while Ethereum is trading at A$2,923 ($1,953), up 5.2%. Bitcoin is up almost 90% this year, while Ethereum hasn’t seen a monthly loss in 2023 and has notched up gains in excess of 60%. Ripple finished the week up 1.9%, Cardano gained 5.8%, Doge (5.6%), Polygon (10.4%), and Bitcoin Cash surged another 28.7%. The Crypto Fear and Greed Index is at 62, or Greed.

20230704 AUD crypto pricing

In headlines

ETF optimism

Surging optimism about the possibility of a Bitcoin ETF approval hit a speed bump this week when the Securities and Exchange Commission told Nasdaq and CBOE (which filed the ETF applications on behalf of BlackRock and Fidelity) that the applications were not sufficiently clear or comprehensive. Bitcoin fell 5% on the news, but there was an immediate wave of resubmissions. BlackRock’s resubmission highlights a formal surveillance sharing agreement with Coinbase which it says accounts for 56% of the Bitcoin/USD volume on US-based platforms. A report from brokerage firm Bernstein suggests the SEC’s previous approval of a Bitcoin Futures ETF and a leveraged ETF means it has little room to manoeuvre to deny a spot Bitcoin ETF. The report highlighted Grayscale’s lawsuit against the SEC for denying a Bitcoin ETF. It argued the SEC would prefer to bring in “a regulated Bitcoin ETF led by more mainstream Wall Street participants” than deal with Grayscale.

Will ARK/21 shares get the first Bitcoin ETF approval?

Cathie Wood’s ARK is reportedly the first in line to get its Bitcoin ETF approved. ARK analyst Yassine Elmandjra said that ARK and 21 Shares had filed their application for a spot Bitcoin ETF in April and were ahead of BlackRock in the queue. Bloomberg Intelligence ETF analyst James Seyffart said the ARK application would be decided on August 13.

Institutions optimistic about crypto

A survey of 208 institutions and large traders in April and May found that 63.5% expressed optimism about the crypto sector over the next twelve months. And when the timeframe was extended to ten years, almost nine in 10 had a positive outlook. Nearly half of the participants had maintained their crypto holdings in the past year, while 35.6% increased their holdings.

Bear market for scams

Web3 security firm Beosin released a report showing the total value of crypto lost to scams, hacks, and rug pulls was US$656 million (A$983M) in the first half of this year. While that sounds like a lot, it’s considerably less than the US$2.1 billion (A$3.1B) lost in the second half of 2021. Most of the funds were lost in 108 protocol attacks (US$471.43M/A$706M), with the rest lost to phishing scams, and rug pulls. Around 45% of the stolen assets were recovered, which is a significant increase on the 8% recovered in 2022.

Asia embraces crypto regulation

The Monetary Authority of Singapore has published proposed measures requiring crypto token providers to keep customer assets separate from the firm’s assets in a statutory trust. It also wants to restrict crypto lending and staking to institutional and accredited investors. In the same announcement, MAS also published a separate consultation paper to address unfair trading practices. It will set out legislative provisions and the types of wrongful conduct that constitute offences. Lasanka Perera, CEO of Independent Reserve Singapore, described the new rules as “a huge step forward [that will] inspire greater confidence from the corporate and institutional sectors with interest in this space”.

South Korea passed its Virtual Asset User Protection legislation, which integrates 19 crypto-related bills and aims to clean up the industry. Thailand’s SEC has also issued new crypto rules prohibiting providers from using customer funds for lending or investment and requiring warnings about the risks of crypto trading.

Altseason incoming?

Former Goldman Sachs executive and Real Vision CEO Raoul Pal believes altcoins are gearing for a big leg up. He shared the TOTAL3 chart, which looks at the total market cap of cryptocurrencies other than Bitcoin and Ethereum, and noted that at US$332.65 billion (A$498M), it looked like a “gorgeous chart.” “It is one of the most bullish and perfect charts I’ve ever seen, and the measured objective is well over US$4 trillion (A$5.99T),” he said. That would represent a 1,100% gain. That’s pretty bullish, and while big gains in Bitcoin and Ethereum in previous cycles were followed by a rotation of capital into altcoins, the SEC hadn’t labelled many of them securities back then.

Gary Gensler resigning according to chatbot

Highlighting just how easily fake news with zero credibility spreads on Crypto Twitter, an AI-generated story from a no-name crypto blog fueled the unlikely rumour on the weekend that SEC boss Gary Gensler had resigned. Given no one had ever heard of the site, no source was mentioned, and ZeroGPT showed ChatGPT wrote 96.81%, it’s surprising anyone took it seriously. The SEC officially denied the rumour.

Hong Kong’s Web3 taskforce

The Hong Kong government has announced a new task force dedicated to promoting Web3 development. Financial Secretary Paul Chan leads the task force and includes other government officials, regulators, and industry experts like Animoca’s Yat Siu. Chan talked up blockchain’s advantages around disintermediation, security, transparency, and cost: “It has the potential to solve many difficulties and pain points encountered in finance, trade, business operations and even day-to-day life.”

Ten years of Independent Reserve

Adrian Przelozny, the CEO of Independent Reserve, told Stockhead that the exchange notching up a decade was a significant achievement. However, he firmly believes “the best years for Independent Reserve, and more broadly the industry, are still ahead of us.” He said the exchange is working on new products, partners and further expansion, and he expressed confidence “that Australia is on the right path towards sensible, pragmatic crypto regulation.”

Until next week, Happy Trading!