Kategorie: Crypto Markets

• Bitcoin ETFs recorded outflows of $243 millin as markets fell amid Iran’s missile attack on Israel.
• BTC price also fell, hitting lows of $60,300 before recovering to above $61k.

Bitcoin exchange-traded funds recorded net outflows for the first time in two weeks, with $243 million exiting on October 2, 2024.

The outflows followed a sharp decline for Bitcoin (BTC) price on Tuesday as geopolitical tensions in the Middle East threatened to escalate further with Iran’s attack on Israel. With institutional investors largely concerned as the Middle East teeters, spot Bitcoin ETFs hit outflows for the first time since Sept.18.

Bitcoin ETFs break inflows streak

Outflows on Oct. 1 meant the US spot BTC ETFs market broke an eight day streak of net inflows. It also saw the Bitcoin ETFs record the largest outflows since more than $287 million exited the market on Sept. 3. That outflows streak also hit eight consecutive days.

Apart from BlackRock’s IBIT, which recorded inflows of over $40.8 million, all other ETFs either saw outflows or zero net flows.

Fidelity’s FBTC led with over $144.7 million in negative flows, while Ark 21Shares’ ARKB saw more than $84.3 million offloaded. Meanwhile, there were zero net flows for Grayscale’s Mini Bitcoin Trust as well as Franklin, Invesco, Valkyrie, WisdomTree ETFs.

BTC price retreated to $60.3k

Amid these movements, BTC price slumped more than 4%, with losses pushing it to lows of $60,300 across major crypto exchanges. From highs above $64k, it meant bulls gave up almost $4k before finding support.

This was the sharpest price dip for Bitcoin since Sept. 6, when BTC fell from above $56,170 to near $52,500.

As BTC price fell, a major whale dumped over $46 million in BTC on Binance. This particular whale, according to Spot On Chain, had accumulated 3,933 BTC worth more than $234 million between August 29 and September 15, 2024.

Despite the sizable sale, the BTC whale still hodls 9,736 bitcoins worth over $601 million.

Bitcoin has traded to above $61k.

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• The DSS has the “potential to improve efficiency and reduce costs” in financial markets
• The sandbox will boost the UK’s position as a “vibrant financial centre”
• The DSS will operate until December 2028, but could be extended

The Bank of England (BoE) and the UK’s Financial Conduct Authority (FCA) have launched a sandbox exploring new technologies such as distributed ledger technology (DLT) and how it can be applied to improve efficiency in financial markets.

In an announcement, the BoE and the financial regulator said they had opened the Digital Securities Sandbox (DSS), encouraging innovative firms to test the DLT for financial markets.

According to the FCA, the DLT has the “potential to improve efficiency and reduce costs in wholesale markets, benefitting industry and investors.”

“We believe the DSS could also lead to a quicker, more effective and collaborative way of delivering regulatory change.”

The FCA stated that the initiative’s aim will help boost the UK’s leading position as a “global and vibrant financial centre” by providing the best environment for “investment, innovation, and sustainable growth.”

The DSS will be operational until December 2028, but the FCA noted that this could be extended by the UK government. Applications for applying will close around March 2027 giving regulators and firms time to transition to a permanent regime.

Scope of the DSS

The BoE and the FCA have said that the DSS has four stages: testing, go live, scaling, and a permanent regime.

During the second “go live” stage, firms in the DSS will be involved in activities including issuing, trading, and settling real digital securities. According to the FCA, “the aim of the DSS is that these securities should be capable of being used in broadly the same way as traditional securities.”

The FCA noted that these can include equities, corporate and government bonds, money market instruments, fund units, and emissions allowances.

Last July, the FCA launched its digital sandbox as a testing environment for firms to see how their products would perform at an early stage of development. At the time, the FCA said that the digital sandbox fosters innovation and growth, and that its development environment allows experimentation while safeguarding the data assets on the platform.

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• The FSC has restricted access to the virtual asset ETFs to professional institutional investors
• Security companies will need to establish a “virtual asset ETF suitability system”

Taiwan’s financial regulator is allowing professional investors to invest in “foreign virtual asset” exchange-traded funds (ETFs) through a re-entrustment service.

In an announcement, the Financial Supervisory Commission (FSC) explained that the move would give investors a “variety of product choices and enhance the momentum of China’s securities firms’ re-entrustment of business.”

As a result of the high risks involved in crypto-related ETFs, the FSC has restricted this to professional investors. These include professional institutional investors, high-net-worth professionals, and high-asset clients.

Additionally, the FSC noted that security companies will need to establish a “virtual asset ETF suitability system, which needs to be approved by the board of directors, to determine a client’s professional knowledge of virtual assets before investing in an ETF.

The security companies will also need to provide product information relating to the ETF before a client makes their first purchase. The security firms will also provide regular training and education on virtual assets.

The FSC said it will “continue to pay attention to the handlings of re-entrusted business by securities firms and continue to improve relevant regulations to ensure the rights and interests of investors and enhance the competitiveness of securities firms.”

Cautious approach

Taiwan has, traditionally, taken a cautious stance toward the cryptocurrency market.

However, over the past year, the financial regulator has seen a shift toward the industry. Last September, the FSC released its guidelines for crypto exchanges with the aim of boosting crypto regulation.

Following that, last October, the Taiwan government introduced the Virtual Asset Management Bill.

Focusing on customer protection, regulatory obligations, and industry self-regulation, the bill provides guidelines for virtual asset service providers (VASPs) while building industry growth.

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• Ripple announced the in-principle license from the Dubai Financial Services Authority (DFSA) on Tuesday, Oct. 1.
• DFSA’s approval could see Ripple unlock its end-to-end payment services in the UAE as well as boost overall Middle East presence.

Ripple announced on October 1 that the blockchain company has hit another regulatory milestone in the United Arab Emirates.

Specifically, the Dubai Financial Services Authority (DFSA) has granted Ripple an in-principle approval, allowing the company to expand its services and strengthen its presence in the UAE and broader Middle East.

The approval means Ripple can now offer its services across other locations in the country, expanding from the Dubai International Financial Centre (DIFC).

“This is a pivotal moment for Ripple’s operations in the Middle East. The DFSA is a globally renowned independent regulator with a rigorous regulatory process and we are delighted to have received their in-principal approval,” Reece Merrick, Ripple managing director, Middle East and Africa, said in a statement.

According to Merrick, more than 20% of Ripple’s global user base is in the UAE, and the expansion will help bring products and services to a growing number of people and businesses. Among key developments will be Ripple’s offering of its cross-border payment solutions, including the Ripple Payments Direct, or RPD service.

Ripple’s regulatory compliance

The milestone sets Ripple, the company behind the XRP cryptocurrency, on the path to becoming the first blockchain-based payments provider to secure a license from the DFSA.

UAE is the regional MENA and South Asia headquarter for Ripple, which the company established in Dubai in 2020.

But apart from regulatory compliance in the UAE, added to with this new in-principle license, Ripple has a broader traction in this quest. The company has secured over 55 licenses across various jurisdictions across the world, including the New York Department of Financial Services (NYDFS), the Monetary Authority of Singapore (MAS) and the Central Bank of Ireland (CBI).

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• Ethereal Exchange integration proposal sparked a 20% surge in ENA price.
• The proposal suggests that 15% of future Ethereal governance tokens be allocated to ENA holders.
• ENA price has dropped to $0.384 after hitting a high of $0.42 amid high trading volume.

The recent proposal to integrate Ethereal Exchange with the Ethena Network has stirred significant excitement in the cryptocurrency community, leading to notable fluctuations in the price of Ethena’s native token, ENA.

This integration aims to launch Ethereal, a decentralized exchange (DEX) for both spot and perpetual futures trading, directly tied to Ethena’s reserve management and its native stablecoin, USDe.

Ethereal integration proposal

The proposal submitted on September 29 to the Ethena governance forum by an anonymous author known as Fells0x seeks to integrate the Ethereal DEX into Ethena’s reserve management from launch, providing a fully on-chain venue for managing both spot and derivative positions that back USDe.

The integration promises to enhance the utility and demand for USDe, which has gained a solid foothold in the market as the fourth-largest stablecoin, boasting a market capitalization of $2.5 billion, according to DeFiLlama.

A critical aspect of the proposal is its commitment to allocate 15% of any future Ethereal governance tokens to ENA holders. This incentive is designed to ensure alignment between the Ethereal team and the Ethena community.

Ethena price reaction

Following the announcement, traders quickly reacted to the potential benefits outlined in the proposal, pushing ENA’s price up by an impressive 20% to a peak of $0.42.

The excitement was reflected in trading volumes, which surged by 145% over 24 hours, indicating heightened interest and optimism among investors. The futures market also witnessed a significant uptick, with ENA futures open interest increasing by over 13% within four hours.

However, the volatility of cryptocurrency markets is well-known, and fluctuations are to be expected. At press time, ENA was trading at $0.384, reflecting a considerable decline from $0.42.

Despite these recent dips, ENA has shown remarkable resilience, rallying over 81.4% in the two weeks.

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