What happened this week in the world of blockchain and cryptocurrencies? The most relevant local and international events, along with engaging background reports, concisely summarized in the weekly review.
Selected articles of the week:
Exchange Traded Funds (ETFs) are investment products that mirror the performance of a specific asset or a basket of assets. Bitcoin ETFs allow investors to invest in the cryptocurrency within a regulated and familiar banking framework. After their launch in the United States in January 2024, Bitcoin ETFs saw an immediate breakthrough. BlackRock’s “IBIT” now manages over 58 billion USD, marking the most successful ETF launch in history. The asset manager aims to replicate this success in Europe. Based in Switzerland, a BlackRock Bitcoin fund will compete with the numerous European ETPs.
The world’s largest asset manager, BlackRock, is preparing to launch an exchange-traded bitcoin product (ETF) in Switzerland.
Restructuring of the SEC
The U.S. Securities and Exchange Commission (SEC) regulates and enforces securities laws to protect investors and ensure fair markets. Under the Biden administration, the SEC has taken a more aggressive stance on regulating and curbing the crypto industry. Now, the new president is restructuring the SEC to change its approach and realign its regulatory stance. Some high-ranking officials who initiated lawsuits against U.S. crypto firms have been reassigned to other departments. The industry should soon receive a fair regulatory framework that no longer stifles innovation.
Trump eases crypto regulation: SEC pulls back as new leadership adopts an industry-friendly approach.
Billions in liquidations
Over the past weekend, Bitcoin and the crypto markets experienced a sharp crash that led to the largest liquidation cascade in history. According to new data, exchanges were forced to liquidate 8 billion USD worth of leveraged positions. Some cryptocurrencies, like Ethereum, briefly lost -30%. Historically, extreme liquidation cascades often marked the local low. This high volatility is likely to be followed by a consolidation phase.
Over the weekend, Bitcoin and the crypto markets experienced a sharp crash, leading to the largest liquidation cascade in the asset class.
UBS: Blockchain instead of crypto
This week, UBS announced the successful completion of a proof-of-concept for a blockchain-based gold investment product. The bank used an Ethereum Layer-2 scaling solution to improve the efficiency, security, and scalability of digital gold transactions. The project aims to enable smaller gold investments with real-time prices, high liquidity, and physical storage. However, none of UBS’s blockchain experiments have left the testing phase so far. And crypto clients continue to be systematically disadvantaged, as evidenced by numerous anecdotes.
UBS leverages the Ethereum layer-2 solution ZKSync Validium for digital gold investments but remains skeptical of cryptocurrencies.
Passive income through staking
In addition: “Staking” is a popular strategy for investors who want to put their crypto assets to work while earning passive income. In staking, cryptocurrencies are “locked” in the blockchain network for a set period. Investors deposit their coins into a smart contract, which locks them during the staking period, so they cannot be traded or sold. These deposited assets serve as collateral for the network, allowing validators, the nodes in the system, to verify transactions and add new blocks to the blockchain. In return, the “staker” receives a passive return.
Crypto staking is a popular strategy for investors who want to make their crypto assets work and generate passive income.
