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According to a report by The Block, JPMorgan analysts, led by Nikolaos Panigirtzoglou, have identified a potential outflow of $2.7 billion from the Grayscale Bitcoin Trust (GBTC) in the event of its conversion to a spot Bitcoin Exchange-Traded Fund (ETF). This projection stems from a noticeable trend since the beginning of the year, where traders have been acquiring GBTC shares at a discount to the trust’s actual Bitcoin holdings.
According to a report by CoinDesk, the Monetary Authority of Singapore (MAS) has completed its final response to the consultation on cryptocurrency service provider regulations, striking a balance between industry growth and consumer safety.
Lugano, one of the most crypto-friendly cities in Europe, is set to integrate the Polygon proof-of-stake (PoS) protocol. Per a report by Cointelegraph, the integration will see the introduction of a multichain digital wallet for personal custody in the city’s payment system, with several tokens already incorporated and plans for further expansion.
Top stories in the Crypto Roundup today:
- JPMorgan Analysts Foresee $2.7 Billion Outflow from Grayscale Bitcoin Trust on Conversion to ETF
- Singapore’s MAS Finalizes Crypto Regulations for Enhanced Consumer Protection
- Swiss City Lugano Advances Digital Currency Infrastructure with Polygon Integration
- The Aftermath of the Battle Between Binance and the DOJ
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JPMorgan Analysts Foresee $2.7 Billion Outflow from Grayscale Bitcoin Trust on Conversion to ETF
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According to a report by The Block, JPMorgan analysts, led by Nikolaos Panigirtzoglou, have identified a potential outflow of $2.7 billion from the Grayscale Bitcoin Trust (GBTC) in the event of its conversion to a spot Bitcoin Exchange-Traded Fund (ETF). This projection stems from a noticeable trend since the beginning of the year, where traders have been acquiring GBTC shares at a discount to the trust’s actual Bitcoin holdings. The strategy appears to be driven by the anticipation of profiting from the discount narrowing once the trust transitions to an ETF.
To estimate the potential outflows, JPMorgan’s team analyzed the cumulative flow into GBTC, taking into account daily trading volumes, share prices, and the direction of price changes. The analysts believe that the $2.7 billion figure is the minimum expected outflow, with the possibility of a higher figure if GBTC’s current management fee of 200 basis points is not substantially reduced following the ETF conversion.
The analysts anticipate that most of the buying activity is speculative, based on expectations of the Grayscale Bitcoin Trust’s transformation into a spot Bitcoin ETF. They suggest that investors are likely to exit their positions to realize profits once the conversion occurs, especially as they have been purchasing shares at significant discounts.
The potential $2.7 billion outflow could have a considerable impact on Bitcoin prices. However, the analysts expect that a majority of this amount will be reallocated into other Bitcoin instruments, such as newly created spot Bitcoin ETFs, post-SEC approval, which is expected to mitigate the negative impact on the market.
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Singapore’s MAS Finalizes Crypto Regulations for Enhanced Consumer Protection
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According to a report by CoinDesk, the Monetary Authority of Singapore (MAS) has completed its final response to the consultation on cryptocurrency service provider regulations, striking a balance between industry growth and consumer safety.
Central to these regulations is MAS’s firm stance against speculative cryptocurrency trading among retail customers. Crypto entities are now barred from offering financing, margin transactions, or trading incentives. Additionally, MAS prohibits accepting payments via locally issued credit cards to limit public access to speculative crypto trading.
A key requirement for crypto service providers is to assess customers’ risk awareness before granting service access, ensuring informed participation in cryptocurrency trading. This follows MAS’s earlier requirement for providers to safeguard customer assets under a statutory trust. The regulations also modify the criteria for accredited investors, allowing some crypto assets to count towards the S$2 million threshold. Exchanges are granted autonomy in token listing criteria, with obligations to disclose conflicts of interest and establish customer dispute resolution procedures.
These rules, which include high availability and risk-incident reporting, align with those for significant financial institutions. They will be implemented in phases from mid-2024, providing a transitional period for compliance. Ho Hern Shin of MAS underscores that while these measures aim to protect consumers, they cannot eliminate the inherent risks of cryptocurrency trading.
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Swiss City Lugano Advances Digital Currency Infrastructure with Polygon Integration
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Lugano, one of the most crypto-friendly cities in Europe, is set to integrate the Polygon proof-of-stake (PoS) protocol. Per a report by Cointelegraph, the integration will see the introduction of a multichain digital wallet for personal custody in the city’s payment system, with several tokens already incorporated and plans for further expansion.
Polygon, renowned for its extensive network of decentralized applications and securing assets worth $5 billion, has been a partner of Lugano since 2022. This collaboration began with Polygon supporting Lugano’s stablecoin, LVGA, highlighting the city’s strategic approach to blockchain technology.
In a unique blend of art and technology, Lugano is launching a nonfungible token (NFT) collection featuring the work of artist Yuri Catania. This collection, which includes a tokenized version of Catania’s artwork at the Palazzo dei Congressi, will utilize the Polygon network for its NFTs.
Lugano’s commitment to cryptocurrency is further evidenced by the widespread use of its payment system, developed in collaboration with Tether, by nearly half of its population. This system facilitates digital currency transactions for local businesses, showcasing Lugano’s progressive stance on digital finance.
March 2022 saw Lugano establish a Center of Excellence for Blockchain Adoption in partnership with Tether. The city is also moving towards enabling cryptocurrency tax payments, with the ultimate goal of accepting crypto for all goods and services, paralleling fiat currency.
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The Aftermath of the Battle Between Binance and the DOJ
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In a recent turn of events, Binance, the world’s largest cryptocurrency exchange, has reached a legal settlement with the U.S. Department of Justice (DOJ), shaking the foundations of the digital asset market. Our latest blog post offers an exclusive analysis of this development, exploring the wider implications and impact on the crypto industry.
The settlement follows a year-long investigation into Binance’s compliance with anti-money laundering regulations, which concluded with the guilty plea of Binance’s founder, Changpeng Zhao (CZ), resulting in his resignation and a $50 million personal fine. Binance itself faces a staggering $4.3 billion in fines and penalties, a figure that has sparked varied responses across the sector.
Subsequently, the U.S. courts imposed specific requirements on Binance, including the appointment of an independent monitor and the implementation of new leadership. As these mandates affect Binance’s future prospects, the price of its token, BNB, reacted, plummeting to a low of $225. At the time of writing, BNB’s value hovers around $234.
CZ founded Binance in July 2017, which has since become the largest centralised exchange within the crypto industry, sustaining this title from early on in its journey. By March of this year, Binance had amassed a market share of 57%, highlighting its domination of the industry, which has been in a steady uptrend since March 2020.
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State of the Crypto by Top Tier Exchange Volume
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