Fidelity, Citadel, and more Institutions Join Crypto Craze | Weekly Digest

June 26, 2023

Welcome to another Crypto Weekly Digest brought to you by VirtualBacon.

This week we’ll delve into the ripple effects of BlackRock's groundbreaking application for a Bitcoin Spot ETF. We'll explore how this bold move might inspire other large asset managers to chart similar courses, further blending traditional finance and the crypto realm. In addition, we turn our attention to the formidable challenges facing Binance. As regulatory pressure escalates, can this crypto giant find a pathway to resolution? As always, we'll conclude with 'Quick Takes', a concise summary of other key headlines.

Institutions Getting Hot for Crypto

Last week we highlighted the bold application by BlackRock for a Bitcoin Spot ETF. This news shook the crypto world given BlackRock's impressive track record with SEC applications. It was rightly perceived as a significant stride towards further Bitcoin legitimization. This week, the impact of BlackRock's move reverberated throughout the financial world as we witnessed a domino effect of similar applications. Three other tradfi firms Invesco, WisdomTree, and Valkyrie all filed their applications for a Spot Bitcoin ETF within the same week.

Invesco Reapplies for Bitcoin ETF

Invesco, a giant in investment management with $1.4 trillion AUM, has joined the fray, reapplying for a spot Bitcoin ETF in partnership with Galaxy Digital. Invesco argues that the lack of a spot Bitcoin ETF drives investors towards riskier options, exemplified by the woes of firms like FTX, Celsius Network, BlockFi, and Voyager.

They propose a surveillance-sharing agreement to mitigate the SEC's concerns around market manipulation.

WisdomTree and Valkyrie Follow Suit, Fidelity to Follow?

WisdomTree, managing around $83 billion in assets, has also filed for a "WisdomTree Bitcoin Trust" spot ETF with the SEC, its third attempt after two previous rejections. Likewise, Valkyrie, known for its Bitcoin futures ETFs, filed an S-1 registration form for a Bitcoin spot ETF to list on the Nasdaq under "BRRR".

The BlackRock's Bitcoin spot ETF application seeming triggered a domino effect. There are also unverified reports hinting at Fidelity's intention to file for a BTC spot ETF.

EDX Markets Launch - TradFi Crypto Exchange Backed by Fidelity, Citadel, and Charles Schwab

The exchange will be led by Jamil Nazarali, a former senior executive at trading giant Citadel Securities.

EDXM offers trading in four major cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Unlike other crypto platforms that hold clients’ digital assets during trading, EDXM works with a third-party custodian that ensures the safety and integrity of clients’ funds. This way, EDXM can focus on providing best-in-class execution, liquidity, and market data for its clients.

EDX Markets' board of directors said in a statement. "Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards.”

The key distinction of this exchange is that it uses the technology of an equity exchange “MEMX”, which aims to separate the exchange features with the exchange operators. So the exchange cannot trade on its own platform, and all user assets are held by traditional asset management firms instead of the exchange.

It’s no coincidence that this highly controlled TradFi exchange is launching among the crackdown in Crypto native exchanges like Binance and Coinbase. The US regulators and financial giants are taking action. They want to get involved in Crypto, at least within the Bitcoin and Ethereum markets. However they will make sure that it is done in their playground with their rules. Crypto native exchanges with their own stablecoin printers and market makers will have to step aside or get beat down in the US markets.

Binance’s Problems Mount

From the trials with the SEC to its enduring struggles on the global stage, Binance, one of the world's foremost cryptocurrency exchanges, finds itself continually at the center of controversy. The company's troubles seem to be far from over, as it faces ongoing legal and regulatory hurdles, sparking anxiety in the crypto community.

UK FCA Cancels Binance Permissions Upon Firm's Request

The UK's Financial Conduct Authority (FCA) has cancelled several permissions previously granted to Binance's UK unit at the firm's request, stating it is no longer authorized to provide regulated services in the UK.

Binance withdraws from Cyprus

After winning registration as a crypto asset service provider (CASP) in Cyprus in October last year, Binance has asked for the registration to be rescinded so it can focus on meeting the requirements of the European Union's Markets in Crypto Assets (MiCA) legislation

French Authorities investigating Binance for "aggravated money laundering".

These permissions pertained to activities Binance never performed or offered, according to a Binance spokesperson. The company cites to be focusing on fewer European jurisdictions with the upcoming EU's Markets in Crypto Assets (MiCA) regulation.

Belgium Cracks Down: Binance Ordered to Halt Crypto Services

Belgium has become the latest country to impose restrictions on Binance, the world's largest cryptocurrency exchange, ordering it to immediately cease offering its crypto services in the country. This move comes amid growing regulatory scrutiny in various jurisdictions, including the United States and France. Notably, the Federal Services and Markets Authority in Belgium has issued an order against Binance's digital asset offerings, asserting that they are prohibited from operating in non-European Economic Area countries.

This order follows a series of recent challenges for Binance, including the dismissal of their license application by the Netherlands, resulting in an exit from the Dutch market, and ongoing investigations in France for alleged money laundering. Binance is expected to comply immediately with the Belgian order or face potential criminal sanctions. As yet, Binance has not publicly responded to these developments.

Business as Usual for Binance Product Releases

Despite the regulatory challenges, Binance has continued to push out releases on its technology and exchange fronts.

BNB Chain has unveiled opBNB, a new layer-2 testnet aimed at resolving scalability issues.

Based on the Optimism OP Stack, this Ethereum Virtual Machine (EVM) compatible layer-2 chain supports Ethereum-based smart contracts, networks, and ERC-20 token standards. opBNB is projected to support over 4,000 transfer transactions per second at an average transaction cost lower than $0.005. This not only enhances transaction speed but also lowers costs, making it an attractive prospect for developers and users.

Binance Labs Incubation Projects Season 5 Concludes, with Official Investments

Binance Launchpad announced its latest token launch Maverick $MAV

Binance Launchpad Projects ROI Analysis

While Binance definitely makes a ton of money launching new Cryptos without clear regulatory certainty, is this necessarily a bad thing? Looking at the data, most Binance IEO projects reached over 20x returns at their all-time-highs, with their lowest prices still being more than 3X ROI from the token sale prices.

Who are the real villains in this game?

Potential Russian Military Coup: Implications for Bitcoin and the Crypto Market

Unrest in Russia, including a possible coup within the country, may bring unexpected bullish sentiment to the crypto market. Russia, a key supplier of oil, gas, and other raw materials, undergoing a civil war could cause significant market turbulence, potentially driving investors towards safer assets like Bitcoin. Further, Russian internal instability could impact the country's invasion of Ukraine, adding another layer of uncertainty.

Remember, Russia recently drafted legislation allowing cryptocurrency in international trade, a strategic move seen as challenging the US Dollar's dominance. Prolonged conflict could amplify Russia's financial difficulties, potentially fueling the use of Bitcoin as a primary digital store of value.

The potential military coup in Russia underlines the profound influence global events can exert on the crypto market. While such situations are laden with uncertainty, they often spotlight the unique resilience offered by the decentralized, borderless nature of blockchain technology. This might be a crucial reminder of the essential value proposition of cryptocurrencies in times of geopolitical instability. We'll continue to monitor these developments closely, acknowledging their potential to shape the digital asset landscape.

Azuki’s Elementals: new NFT Drop on June 27th

The floor price of Azuki plunged over 11% today, from 17.5 ETH to around 14.73 ETH, following the announcement of Azuki's upcoming launch of Azuki Elementals. Slated for release on June 27th, the 20,000-piece collection is set to captivate the NFT community.

Each Azuki holder was airdropped 1 Elemental NFT for free, and during the NFT drop on June 27th, Azuki and Beanz holders can also mint 1 Elemental for each Azuki or Beanz they hold.

Azuki holders have priority access with guaranteed mint, while Beanz holders come after and are first come first serve.

If the launch of Azuki Elementals mirrors the success of the original Azuki collection, this is certainly an event to monitor closely in the NFT space. In my personal opinion, the unique approach of rewarding existing holders with airdrops and locked Elementals creates an intriguing incentive that could potentially stimulate demand and boost prices. As always, do your own research and stay safe in this rapidly evolving market. Exciting times are ahead for the Azuki community!

Mint details

Weekly Bullets

Crypto Macro

🟠IMF Embarks on the Development of aGlobal Digital Currency Platform.

🟠Deutsche Bank SeeksDigital Asset License from German Regulator.

🟠Singapore's MAS ProposesDigital Money System; Amazon and Grab Launch Pilot Trials.

🟠U.S. House Committee to Decide onCrypto Stablecoin Legislation in July.

🟠Supreme Court Upholds Arbitration inCoinbase's Favor.

🟠SEC Allows Launch of First LeveragedBitcoin Futures ETF.

Project Updates

🟠Ripple Receives Approval for Major Payments Institution License in Singapore

🟠Nike.SWOOSH arrives on Fortnite, 'Airphoria' Virtual Experience to 240M Users

🟠Polygon ProposesUpgrade of Original POS Sidechain To ‘zkEVM Validium’

🟠Optimism Changes Name to OP Mainnet with rebrand to 'Superchain' Vision

🟠Ethereum Developers Contemplate a Hefty Validator Limit Increase from 32 to 2048 ETH.

🟠Etherscan Incorporates OpenAI Tool.

🟠Ledger Unveils Hardware Wallet Seed Recovery Tool in New White Paper.

🟠BitGo Calls OffPrime Trust Acquisition Deal.

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