What happened this week in the world of blockchain and cryptocurrencies? The most relevant local and international events as well as appealing background reports in a concise and compact weekly review.
Selected articles of the week:
The topic of “Spot Bitcoin ETFs” in the United States has been the subject of intense debate for some time. The lack of such financial products in the largest capital market has made it challenging for investors to easily invest in the leading cryptocurrency and thus in the emerging asset class of digital assets. After prolonged hesitation by the US Securities and Exchange Commission (SEC), approval for these financial instruments was finally granted. On January 10th, a total of 11 ETFs began trading, offering both institutional and retail investors new opportunities for exposure to Bitcoin.
An analysis of trading activity in the initial weeks reveals some interesting insights. In the first ten trading days after the market launch, a net USD 759 million flowed into the newly launched ETFs. Combined with the already established Grayscale Bitcoin Trust (GBTC), the total assets of Bitcoin-related instruments traded in the USA amount to 26 billion USD. This is already a significant achievement when compared to Gold ETFs with assets of 95 billion USD and Silver ETFs with 11 billion USD. On the first day of trading, the trading volume reached a new record for ETF launches, surpassing all previous records at 4.6 billion USD. The leading issuers in this space include Fidelity with their FBTC, Blackrock with IBIT, and the collaboration between Ark Invest and 21Shares with ARKB.
The development has exceeded most expectations, and the current net inflow (including GBTC outflows) has led to a significant absorption of the Bitcoin supply, which is approximately double the Bitcoin inflation rate. In two months, the Bitcoin inflation rate will halve due to the “Bitcoin Halving”, which will lead to a further significant increase in the absorption rate of Bitcoin supply driven solely by ETF inflows.
The recently approved spot Bitcoin ETFs show inflows of $759 million and a record volume of $14 billion after two weeks.
Similar to the Canton of Zug, Neuchâtel has long been considered a pioneer in the blockchain sector in French-speaking Switzerland. While Bitcoin Suisse laid the foundation for the German-speaking side of the Crypto Valley, Bity started as a Bitcoin exchange in Neuchâtel in 2013, the home canton of its founders. For years, crypto brokers like Bity relied on the Neuchâtel Cantonal Bank (BCN) as their primary bank for accessing the fiat system. However, BCN has now decided to cease business relationships with companies offering crypto trading services starting from June. BCN’s decision could have significant consequences for the crypto ecosystem in the Romandy region, as Neuchâtel has been regarded as an attractive hub for blockchain companies. BCN justifies its decision by citing the increased effort required for effective anti-money laundering measures, including the necessary verification of the source of funds.
In a turnaround, BCN will close its doors to companies offering crypto trading services starting from June.
The EU Parliament and the Council have reached a preliminary agreement on a new package to combat money laundering, which includes the application of the international “Travel Rule” to crypto assets. This regulation requires comprehensive customer verification (KYC/AML) to be conducted for cryptocurrency transfers exceeding 1,000 euros when they occur between regulated third parties, such as crypto exchanges. This adjustment is separate from the Markets in Crypto-Assets (MiCA) proposal, which aims to establish a unified legal framework for crypto service providers in the EU. Both regulations are set to become effective in 2025. The same regulations apply in Switzerland, but without a fixed lower limit.
After preliminary agreement between the EU Parliament and the Council, crypto transfers of more than €1,000 will be subject to stricter controls.
AMINA Bank, formerly known as SEBA, is a Swiss-based bank that focuses on bridging the gap between digital and traditional assets. In 2019, it became one of the first two crypto startups to receive a Swiss banking license from the regulatory authority FINMA. In collaboration with the St. Galler Cantonal Bank, the bank introduced its own crypto offering. In an interview with CVJ.CH, Markus Menzl, CCO of AMINA Bank, explains the company’s objectives and its role in the expanding crypto market and the changing financial world.
AMINA Bank COO Markus Menzl explains the global mission of the company and its activities in the growing Swiss crypto market.
In addition: the simultaneous launch of 11 Bitcoin spot ETFs on the world’s largest exchange has ignited international competition. Issuers in other countries are either preparing to introduce their own vehicles or considering reducing fees for their existing products. Companies like CoinShares, WisdomTree, and Invesco have already announced fee reductions for their crypto products traded in Europe.
A summarizing review of what has been happening at the crypto markets of the past week. A weekly report in cooperation with Kaiko.
