What happened this week around blockchain and cryptocurrencies? The most relevant local and international events as well as appealing background reports in a pointed and compact weekly review.
Selected articles of the week:
Exchange-traded funds (ETFs) offer institutional investors easy access to assets within a familiar environment. This is why various product providers have long been striving to launch the first spot-based US Bitcoin ETF. However, the Securities and Exchange Commission (SEC) has remained steadfast in its direction so far, despite approving several futures-based ETFs over the past two years. A court ruling in the Grayscale versus SEC case could potentially bring an end to the agency’s rigid stance. The three-judge appellate panel unanimously declared that the SEC’s rejection of spot products was arbitrary and ordered a review. The BlackRock Bitcoin ETF could soon become a reality.
Crypto product provider Grayscale scored a decisive victory in its court case against the SEC. The spot ETF is within reach.
In light of the recent court ruling, the SEC has once again decided to delay all pending applications for a Bitcoin ETF. The regulatory authority requires additional time to review the anti-market manipulation measures proposed by the applicants. Specifically, BlackRock & Co. have entered into agreements with the US cryptocurrency exchange Coinbase. The postponement of the ETF decision equates to a 45-day extension. With two more extensions, the SEC could push its decision deadline to March 2024. Nevertheless, analysts at Bloomberg Intelligence anticipate a 75% likelihood that the agency will approve a spot ETF already this year.
The SEC has delayed its decision regarding the pending Spot Bitcoin ETFs. while Grayscale’s victory fuels expectations for early approvals.
The process of mining new Bitcoins involves energy-intensive operations, where powerful computers solve complex mathematical puzzles to validate blockchain transactions, preventing a malicious actor from taking control of the network. However, due to the resulting high electricity consumption, potential externalities arise. Particularly in Western countries, this aspect has garnered increasing criticism. Miners are now seeking refuge in locations with excess renewable energy that would otherwise go to waste, showcasing how Bitcoin mining is being utilized for efficient cross-border reallocation of natural resources, illustrated by the example of Iceland.
Bitcoin mining operators are increasingly using surplus energy in Iceland to power their computers.
The relationship between the crypto industry and China has been complex for years. Through bans and restrictions, the People’s Republic has repeatedly curtailed the emerging sector. The latest crackdown on the digital asset class occurred in spring 2021 when Bitcoin mining and other crypto services were criminalized on the Chinese mainland. However, the intervention seems to be ineffective. For almost half a year, Beijing has been reopening to the sector, this time through the Hong Kong Special Administrative Region. Through comprehensive regulation and the licensing of established service providers, the city-state aims to become Asia’s future crypto hub.
Swiss crypto bank SEBA has received an approval-in-principle for a license to conduct regulated crypto-related activities in Hong Kong.
In addition: The memecoin Pepe had an impressive run over the summer. Emerging seemingly out of nowhere, the humorous cryptocurrency climbed into the top 50 of all cryptocurrencies by market capitalization within a few weeks. The success trajectory was only halted by the broader market’s trend reversal. However, controversies have now arisen around the memecoin due to token sales by the founders. The team is said to have sold around $15 million worth of PEPE. Consequently, the price decline over the past few weeks has been sharp.
A summarizing review of what has been happening at the crypto markets of the past week. A look at trending sectors, liquidity, volatility, spreads and more. The weekly report in cooperation with market data provider Kaiko.
