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Interest in Crypto Investment Products Weakens Further in July: Report
Interest in cryptocurrency investment products continued to decline in July as the price of bitcoin fell below the $30,000 threshold.
A new report from CryptoCompare highlights the decline in trading activity as well as a drop in total assets under management (AUM) in the digital asset investment sphere.
Compared with traditional asset classes, digital asset markets still have a “long way to go before more risk-averse investors are fully at ease,” according to CryptoCompare.
Related: NFT Craze Remains a Nonfactor for Ether’s Price
Key findings from the report include:
- Since June, total assets under management across exchange and over the counter-traded digital asset investment products decreased by 14% to $34.8 billion according to the report.
- “Grayscale products represent the vast majority of AUM at $27.9bn (80.1% of total) followed by those of XBT Provider ($2.7bn, 7.8% of total) and 21Shares ($949mn, 2.7% of total)” according to the report. (Grayscale is a unit of Digital Currency Group, which also owns CoinDesk.)
- The report also found that trading activity in the investment products continued to slow, with aggregate daily volumes of $319 million, down 35% so far in July compared with June levels. Grayscale’s bitcoin trust product (GBTC) sustained its majority share of trust product volume at 59.1%. However, average daily volume for GBTC was down 37% to $160 million
- Despite the decrease in trading activity and drop in AUM, net investment flows turned positive in July. Net inflows increased to $58.5 million, in comparison to net outflows of $59.5 million in June.
Index Coop, Bankless DAO Team Up to Launch New Crypto Index
Index Cooperative, the decentralized autonomous organization (DAO) behind tokens like the DeFi Pulse Index, has partnered with another DAO, Bankless, to launch a new crypto token called the BED index.
First proposed in February, the BED index contains an even split of bitcoin, ether and decentralized finance (DeFi), which will be represented by Index Coop’s DeFi Pulse Index (DPI).
According to Index Coop, BED and other crypto indexes offer an easy way for crypto newcomers to get diversified exposure to different assets in a way that is simple and transparent.
Related: NFT Craze Remains a Nonfactor for Ether’s Price
As decentralization becomes a bigger theme in crypto, DAOs are gaining momentum. They are collections of people and entities on the internet who band together to run a leaderless organization. They are essentially companies for a decentralized world.
And in the case of the BED index, what they are offering is a traditional finance product – an index – for the nontraditional crypto markets.
Bankless DAO devised the methodology for the BED index, and will be responsible for monthly rebalancing as needed.
The BED index will be represented by a fully collateralized ERC-20 token and will be available for purchase on Uniswap v3, Index Coop and TokenSets.
Related StoriesBlockFi Faces Crackdown by a Third US State, Texas
Texas regulators alleged on Thursday that BlockFi’s Interest Account (BIA) product is a security under state rules in the latest blow to the crypto lender’s business model.
The Texas State Securities Board (TSSB) filed for a cease-and-desist order against BlockFi, BlockFi Trading and BlockFi Lending. The cease-and-desist hasn’t taken effect, and won’t unless a judge signs off after a hearing in October, CoinDesk has learned. The filing gives the company a chance to formally respond to the allegations. The company is allowed to continue operations until the hearing.
“This legal action affords BlockFi and its affiliates the opportunity to respond to our allegations and present admissible evidence,” Joe Rotunda, TSSB’s director of enforcement, said. He shared a copy of the notice with CoinDesk.
Related: BlockFi Is Pursuing Plans to Go Public – Even as Regulators Close In
The proposed cease-and-desist order would prevent BlockFi from offering its BIA product without at least registering with the state’s securities regulator.
Texas joins Alabama and New Jersey in alleging that the crypto lending platform’s interest-bearing product might violate state securities laws.
While a spokesperson could not immediately be reached for comment, the company tweeted, “we firmly believe that the BIA is lawful” after the publication of this article.
Like New Jersey, Texas is arguing the fact that the company’s customers place their cryptocurrencies in the lending platform’s control for BlockFi to invest and commingle with other customer and corporate funds may violate the state’s securities laws.
Related: BlockFi Is in Regulators’ Crosshairs. DeFi Is Next
“The BIAs constitute investment contracts, notes, or evidences of indebtedness regulated as securities as that term is defined by Section 4.A of the Securities Act,” the filing said.
Texas said it notified BlockFi in late April that its lending product might be violating state securities rules. The lender continued to illegally offer BIA in Texas, TSSB alleged.
TSSB said BlockFi has at least 25,000 clients in Texas with $691 million in total assets.
In a tweet responding to the allegations from Alabama’s regulator, BlockFi said its interest accounts aren’t securities.
Read the filing here:
UPDATE (July 22, 2021, 22:12 UTC): Updated with a tweet from BlockFi; further clarifies that Texas filed for a cease-and-desist but it has not yet taken effect.
Related StoriesColombia Central Bank Launches Blockchain Bond Project
The Central Bank of Colombia (Banco de la República), IDB Group and Banco Davivienda have launched the pilot of Colombia’s first blockchain bond.
According to an official statement by Banco de la República, the bond will be issued, placed, traded and settled on blockchain technology through the use of smart contracts for the Colombian securities market.
IDB Group is composed of the Inter-American Development Bank, the Inter-American Investment Corporation and the Multilateral Investment Fund.
Related: China Unveils Cryptography Research Center to Support Digital Yuan
The pilot program “seeks to verify the benefits of this new technology in the life cycle of a security, from issuance to maturity,” and is expected to last six months, Banco de la República added.
Banco Davivienda, a Colombian bank based in Bogotá, will issue the bond and IDB Invest will underwrite the entire issue. The statement added that the operation will be recorded in LACChain, a platform launched by BID Lab, “leaving the complete traceability of the bond in blockchain technology.”
The money under the pilot program will be processed by the payment system of Banco de la República, which will act as an observer node in the blockchain network.
IDB Group will contribute technical support for the implementation of the proof of concept, and will offer advice on both regulatory and technical aspects of the operation, the statement added.
Related StoriesReddit Rolls With Arbitrum to Scale Its Ethereum-Based Community Points System
Arbitrum has been upvoted by Reddit.
The rollup technology was selected by the social media site to make Reddit’s Ethereum-based Community Points system ready for prime time. Rollups, a solution for the world computer’s limited capacity, temporarily bundle transactions on a sidechain so that more users can participate in the primary network.
Reddit said Thursday that Arbitrum beat out 21 other entrants to become the winner of its “Scaling Bake-Off.” Other projects being considered included Solana, StarkWare and Polygon, to name a few.
Related: Market Wrap: Bitcoin Holds Above $30K as Sentiment Improves
Community Points, which are ERC-20 tokens that can be earned by Reddit users for quality comments or other contributions, can be spent on things such as exclusive badges, custom emojis and GIFs.
In a statement, Reddit said Arbitrum, a project of New York’s Offchain Labs, was “the most promising scaling technology for Community Points,” citing the fact that Arbitrum is decentralized, developer-friendly and has broad ecosystem support.
Scaling warsThe decision is yet another feather in the cap of Arbitrum, which, since launching for developers on May 28, has seen adoption or interest from projects such as Alchemy, Uniswap, Chainlink and Etherscan as projects look for layer 2 solutions to thwart Ethereum’s high gas fees.
Reddit launched its own layer 2 rollup using Arbitrum tech on the Rinkeby testnet today, before migrating to the Ethereum mainnet.
Related: Uniswap Poll Signals Strong Support for Putting v3 on Ethereum Scaler Arbitrum
Community Points are being experimented with in two communities. One is r/CryptoCurrency, where the Points come in the form of “Moons;” the other is r/FortNiteBR, where the Points are known as “Bricks.” Together, these two communities contain around 4.8 million members.
Reddit noted that while it migrates Moons and Bricks to the scaling network, each will be unavailable for a few hours and updates will be posted in each community when completed.
In addition, Reddit is looking for developers to build a more decentralized web at “Reddit-level scale.”
Related StoriesJPMorgan’s Retail Customers Can Now Tap Crypto – Just Not Directly
JPMorgan Chase & Co. is allowing its wealth management clients to invest in a selection of crypto funds, including Grayscale Bitcoin Trust (GBTC), a source told CoinDesk.
The mega-bank will also help retail clients invest in GBTC, Grayscale’s Ethereum Trust, Bitcoin Cash Trust, Ethereum Classic Trust as well as Osprey Bitcoin Trust through their brokerage accounts, as Business Insider first reported. The Grayscale products are issued by Grayscale, a subsidiary of CoinDesk parent company Digital Currency Group.
The move gives a wide array of JPMorgan clients – including those plugged into the commission-free Chase trading app – easy access to indirect crypto investing. Trust products from Grayscale and Osprey are “price exposure” vehicles that sidestep custody headaches. These clients, however, cannot invest in crypto directly through their JPM accounts.
Related: Rothschild Investment Corp More Than Tripled Bitcoin Exposure in Q2
Advisers are prohibited from soliciting orders in the crypto funds, Business Insider reported. They cannot make buy or sell recommendations for their clients.
In April, CoinDesk reported that JPMorgan was preparing to launch a bitcoin fund for its private bank clients.
Related StoriesFTX CEO Says US Is Next Big Target Market
Flush with $900 million of fresh capital, Hong Kong-based crypto derivatives exchange FTX has an eye on expanding business in its CEO’s home country.
“When you look at FTX US, there’s an enormous amount of potential growth in the states,” Sam Bankman-Fried said Thursday on CoinDesk TV’s “First Mover” program.
“There isn’t nearly as much business going on right now as you would expect given the size of the economy,” the 29-year-old California-born entrepreneur went on. “A lot of that is regulatory. It’s something that we’re working on there.”
Related: China Unveils Cryptography Research Center to Support Digital Yuan
FTX has clearly been laying the groundwork to become a household name in the U.S. through high-profile, sports-related marketing deals with basketball, baseball and (American) football luminaries.
As it stands, FTX’s global customer base is “everywhere….all over the place,” Bankman-Fried said. “There isn’t any dominant jurisdiction,” and no single jurisdiction makes up more than 10% of the company’s revenues, he said.
While acknowledging that China’s recent crypto crackdown has weighed significantly on the price of bitcoin and the asset class broadly, Bankman-Fried downplayed the direct impact on FTX’s business.
“While it is a relevant jurisdiction, it’s not an overwhelming one,” he said of China. “While I think have a lot of Chinese users for a non-Chinese exchange, we don’t nearly as many as Chinese-native ones do.”
Related: Stellar Foundation Eyes Potential Acquisition of MoneyGram: Report
Asked how FTX would deploy the proceeds of the record-setting Series B round announced this week, the CEO said that acquisitions would likely be the main investment. In particular, FTX is interested in buying firms that would expand its set of licenses, user base and familiarity with assets such as fiat currency and stocks “that we don’t have much expertise with.”
Related StoriesVCs Pumped $4B Into Crypto Firms in Q2: CB Insights
The second quarter of 2021 saw a record $4 billion in venture capital raised by cryptocurrency firms, amid a bumper crop of $30.8 billion in fintech deals generally, according to business trend watcher CB Insights.
The report mentioned sizable rounds like those from stablecoin company Circle, which snagged a then-record $440 million in May. (The record for largest funding round by a crypto firm was crushed this week by a $900 million Series B for Sam Bankman-Fried’s FTX exchange.)
Also noted by CB Insights was hardware wallet maker Ledger’s $380 million raise in June; a $300 million round in April for custody firm Paxos (which, like Circle, also acts as the steward of stablecoins); Block.one’s $300 million raise in May for its Bullish exchange; and Mexico City-based crypto exchange Bitso’s $250 million haul in May.
Related: Crypto Venture Studio Thesis Raises $21M to Keep Building
While bitcoin and other cryptocurrency prices have flattened in recent weeks, the size of crypto raises appears to be increasing into Q3, with FTX leading the charge.
“Q2’21 was the largest funding quarter on record,” the report said of the entire fundraising landscape, adding:
“Across 657 deals, global VC-backed fintech companies raised a record $30.8B, shattering last quarter’s funding record by 30%. This impressive funding growth was accompanied by a modest 2% deal growth quarter-over-quarter (QoQ) and a 29% increase year-over-year (YoY).”
Sectors to watchCrypto has brought about a new age in banking compliance, said the report. Blockchain analytics companies, used to track transactions and aid regulators and law enforcement, are another hot area in terms of funding.
Related: Magic Numbers: Ethereum-Based Authentication Platform Raises $27M
The report mentioned two major rounds in June: Chainalysis raising $100 million and CipherTrace raising $27 million.
CB Insights also singled out crypto custody and infrastructure as an especially fecund sub-segment; in addition to the Ledger and Paxos raises, San Francisco custody tech firm PolySign raised $53 million and London-based custody firm Copper raised $25 million. Watch this space.
Related StoriesIndia’s Central Bank Considering Pilot Programs for CBDC: Report
The Reserve Bank of India is considering running a series of pilot programs for a proposed central bank digital currency (CBDC) Deputy Governor T. Rabi Sankar said.
- The deputy governor said in a speech Thursday that the central bank was weighing a “phased introduction” of a digital rupee to allow time for required legal changes to the country’s foreign-exchange rules, according to a Bloomberg report.
- Sankar said a CBDC would reduce the use of cash and protect citizens from the volatility of cryptocurrencies.
- The RBI published a report in March highlighting the benefits of a CBDC for financial inclusion and drawbacks related to raising the cost of lending through commercial banks.
- While India’s government has previously shown intent to ban cryptocurrencies outright, the mood has changed somewhat in recent months with signs of country taking a more lenient approach and seeking to regulate the crypto market.
Ukraine Presents Road Map for Developing the Digital Assets Industry
Ukraine’s Ministry of Digital Transformation presented a plan, created with input from the local crypto community, for developing the country’s digital assets industry.
The eastern European country, which is a global leader in cryptocurrency adoption according to Chainalysis, is trying to become the jurisdiction of choice for crypto startups, and is one of the few nations in the world to present a strategy for developing its digital asset industry.
The report (in Ukrainian) entitled “Virtual Assets of Ukraine – 2030,” reflects the results of research conducted between March and June this year by the ministry together with crypto exchanges, miners and other crypto-community participants.
Related: Solidus Hires Ex-Head of CFPB to Be Top Regulatory Official
According to the report, to provide an optimal environment for the digital asset market to develop the government needs to tackle legal and educational goals.
Among them:
- Provide an appropriate legal framework.
- Ensure a stable taxation regime for the next 3-5 years.
- Allow crypto companies to open bank accounts.
- Issue a central bank digital currency (CBDC).
- Reform the courts to enhance the protection of private property.
The road map also says the bill on the digital assets currently before parliament ought to be passed this year. Tokenized assets, it says, should become part of the existing financial system, and there should be an official way to buy virtual assets for fiat money.
Education also features in the plan, with the development of programs dedicated to blockchain and virtual assets starting at school-aged children. There should be a special program for members of parliament and a Master’s course on decentralized finance.
Related: Market Wrap: What’s Next for Bitcoin After Break Below $30K
The 11 working groups that compiled the report included examining a way for people to “buy bread for tokens,” the launch of a “fiat-to-crypto gateway,” establishing a regulatory sandbox for the crypto ecosystem projects and creating new policies for regulating the digital assets space.
The report predicts that if its recommendations are followed, by May 2024 Ukraine should become of of the top-10 crypto nations, with 47% of the population using digital assets and 10% of businesses having their assets tokenized.
Read also: Why Ukraine Is Ripe For Crypto Adoption
Related StoriesUS Credit Union Regulator Wants to Know How Its Firms Handle DeFi
The National Credit Union Administration (NCUA) is formally looking for more information about how the financial institutions it regulates can interact with the crypto industry.
The NCUA published a request for information (RFI) on Thursday after its three board members unanimously voted in favor, asking how distributed ledger technology (DLT) and decentralized finance (DeFi) might impact the credit union system, and how its regulated entities might interact with either of these technologies or other crypto-related tools.
The NCUA is a federal U.S. regulator overseeing credit unions, acting as a counterpart to the Office of the Comptroller of the Currency (OCC), which regulates national banks.
Related: Crypto News Roundup for July 22, 2021
With this, every major federal banking regulator is now looking at crypto. In addition to the NCUA and the OCC, the Federal Deposit Insurance Corporation (FDIC) published a RFI in May asking similar questions around crypto, while the Federal Reserve is seeking feedback on a proposal to allow fintech and crypto firms access to its master accounts.
There’s also growing scrutiny around digital assets from regulators, with stablecoins and securities-backed tokens in particular starting to garner attention. The OCC, the Fed and the FDIC are also forming an interagency team to examine crypto.
In its RFI, the NCUA asked about insurance, risk/compliance, operations, supervision and related areas where the NCUA might be involved if a credit union wants to offer a crypto-related service.
The RFI also included a question around stablecoins and how those accounts might be insured.
Related: Tether General Counsel Tells CNBC Audit Is ‘Months’ Away
“Are there distinctions or similarities between stablecoins (cryptocurrencies that are backed by a currency like the U.S. Dollar and are designed to have a stable value compared to other cryptocurrencies) and stored value products where the underlying funds are held at FICUs and, for which pass-through share insurance may be available to members in limited scenarios?” the RFI asked.
The general public has 60 days to weigh in on the questions.
NCUA Vice Chair Kyle Hauptman first called for his agency to take a look at crypto earlier this year. He pointed to the OCC’s work in letting national banks interact with stablecoins and provide custody services for cryptocurrencies as a potential example for credit unions, though he said any NCUA guidance might not match up exactly with the OCC.
“At some point, we’ll speak with NCUA staff about doing a side-by-side with what the OCC did and see what we do or don’t want to adapt for credit unions. NCUA benefits a bit from ‘somebody else went first,’ so we can, where appropriate, build on the OCC’s experience,” he told CoinDesk in March.
Related StoriesSolidus Hires Ex-Head of CFPB to Be Top Regulatory Official
Crypto trading surveillance start-up Solidus Labs said Thursday it had hired the former head of the U.S. Consumer Financial Protection Bureau (CFPB) to head up its regulatory team.
Kathy Kraninger, who served as the CFPB’s director from 2018 to 2021, will oversee Solidus Labs’ regulatory strategy and build a global team to work with governments looking more closely at digital asset markets and how to introduce regulatory frameworks.
Solidus makes market surveillance tools to flag manipulation across cryptocurrency trading platforms. This ability is seen as crucial to helping U.S. regulators finally approve a cryptocurrency exchange-traded fund (ETF).
Related: Ukraine Presents Road Map for Developing the Digital Assets Industry
Kraninger is the latest Trump administration regulator to join a cryptocurrency company. Former bank regulator Brian Brooks was appointed the CEO of Binance U.S. in May, while Chris Giancarlo, the former head of the U.S. derivatives regulator, is an investor in Solidus and the founder of the Digital Dollar Project, which supports the development of a digital dollar.
Kraninger had previously held senior government positions at the Office of Management and Budget, the Departments of Homeland Security and Transportation and in both the U.S. Senate and the House of Representatives.
She was asked to resign when President Joe Biden took office.
In May, Solidus Labs announced that it had raised $20 million in a Series A investment round led by Evolution Equity Partners and that included Hanaco Ventures, which led the startup’s $3.75 seed round in early 2019.
Related: Market Wrap: What’s Next for Bitcoin After Break Below $30K
Other investors in the Series A round included FTX and VC Avon Ventures, which is affiliated with Fidelity Investments. Several former regulators also joined the round, including Commodity Commodity Futures Trading Commission (CFTC) alumni Chris Giancarlo and Daniel Gorfine, and former Securities and Exchange Commission (SEC) Commissioner Troy Paredes.
Related StoriesCrypto Venture Studio Thesis Raises $21M to Keep Building
Thesis, the crypto incubator behind the Fold crypto rewards app and the decentralized Keep protocol, announced Thursday that it has raised $21 million in a Series A funding round.
Investors in the round included ParaFi Capital, Nascent, Polychain Capital and others in the crypto space.
According to Thesis CEO and founder Matt Luongo, the venture studio plans to use the funds to build out existing projects and spin up new ones. Thesis’ fifth studio project is a yet-unnamed Web 3 wallet that Luongo described as an “open-source alternative to MetaMask.”
Related: VCs Pumped $4B Into Crypto Firms in Q2: CB Insights
Luongo told CoinDesk that Thesis was inspired to create a MetaMask competitor after the popular, ConsenSys-owned crypto wallet tightened its licenses and switched from open-source to closed-source in August 2020.
Unlike previous funding rounds for Thesis, which have largely been project-specific, the $21 million raised in the Series A is an investment into Thesis itself. For investors, it represents a bet that Thesis will continue successfully incubating and developing projects.
“Thesis is one of the best repeat builders in our ecosystem, leveraging their early crypto expertise to bring to market technology that plays a pivotal role in making crypto more dynamic and accessible,” said Santiago Roel Santos of ParaFi Capital.
Investors in the round will be given equity in Thesis and all of its projects.
Related: Magic Numbers: Ethereum-Based Authentication Platform Raises $27M
“Anyone who invested in this round now has ownership in Fold, Keep, Saddle – really everything that we’ve done so far,” Luongo said.
Related StoriesNatWest Blocks Payments to Binance as Starling Joins the Chorus
NatWest has followed some of its U.K. banking peers in blocking debit and credit card payments to cryptocurrency exchange Binance, while Starling Bank CEO Anne Boden labeled some exchanges as dangerous.
- “It is the case that all payments to Binance are blocked,” a NatWest spokesperson told CoinDesk.
- NatWest joins Santander and Barclays among major banks preventing U.K. customers from purchasing crypto on Binance, following the warning from the Financial Conduct Authority in June that the exchange was operating in the country without permission.
- The bank had previously limited the amount users could spend each day on crypto exchanges in response to concerns over investment scams and fraud.
- In conjunction with this policy, NatWest is blocking outright payments to a small number of crypto firms that pose particularly significant levels of risk, Binance among them, the bank said.
- A number of customers flagged on social media that they had received texts from NatWest informing them all credit and debit card payments to Binance were being declined until further notice.
- A further blow to crypto in the U.K. came Thursday from Anne Boden, CEO of digital banking heavyweight Starling Bank, who described some exchanges as “quite dangerous” on a call with reporters, according to CNBC.
- “The industry as a whole must really be alert to the dangers of people using bitcoin and cryptocurrencies to process fraudulent payments,” she said.
UPDATE (JULY 22, 13:43 UTC): Adds comments from Starling Bank.
Related StoriesMagic Numbers: Ethereum-Based Authentication Platform Raises $27M
Magic, a way of logging into websites without relying on passwords or the centralized honeypots that store vast lists of them, has closed a $27 million funding round.
The Series A round, announced Thursday, was led by Northzone and included Tiger Global, Volt Capital, CoinFund and Digital Currency Group (also the owner of CoinDesk). It brings Magic’s total funding to $31 million, following a $4 million seed round in May 2020 that included the likes of Placeholder, SV Angel and Naval Ravikant.
Passwords are generally the way users prove ownership of long alphanumeric private keys. Those secret passwords are trusted to platforms such as Equifax, LinkedIn or Kickstarter, and once an attacker has infiltrated one of these platforms and accessed a database of hashed passwords, they can attempt to brute force weaker passwords, which are probably used elsewhere too, such as the user’s bank account.
Related: VCs Pumped $4B Into Crypto Firms in Q2: CB Insights
Magic’s authentication system uses key pairs created on the platform-independent Ethereum blockchain. Rather than sharing a secret, the user signs a piece of data with their private key, generating a signature; in computing terms, proving you have knowledge of a secret without revealing anything is called a zero-knowledge proof. Magic makes this all happen via user-friendly emailed links, and it can also be simply plugged in as an SDK by software developers.
“Under the hood, every user that signs up with Magic has an Ethereum key pair generated for them, whether they use that key pair or not,” Magic CEO Sean Lin said in an interview, adding:
“So we actually have users in the millions now, growing at 6% a week, which means we are probably one of the fastest distributors of decentralized identity and blockchain key pairs. Eventually, when the time’s right, they are all going to come back and be Web 3 users.”
Going back a couple of years, the majority of Magic users were non-blockchain apps, or regular Web 2 fans, said Li. However, he said this past year has seen a surge of interest, particularly driven by things like non-fungible tokens (NFTs).
Related: ‘Time Bandit’ Attacks on Ethereum: What They Are and How They Work
“Before this year, I would say about 60% or even 70% was from Web 2,” Li said. “But this year there has been a real shift towards Web 3 and it now accounts for maybe 80% of use.”
Related StoriesGlobal X Joins Firms Filing Bitcoin ETF Application With SEC
New York-based fund manager Global X Digital Assets has joined the list of firms applying to file a bitcoin exchange-traded fund (ETF) in the U.S.
- The fund manager filed a proposal Wednesday with the Securities and Exchange Commission (SEC) to list the Global X Bitcoin Trust on the Cboe BZX Exchange.
- The ETF will reflect the performance of the price of the world’s large cryptocurrency “less the expense of the Trust’s operations,” according to the filing.
- Custody for the bitcoin purchased by Global X will be provided by an unidentified custodian.
- The SEC is now reviewing more than a dozen similar applications, and has approved none. Some have had their formal application windows extended on more than one occasion.
- SEC Chairman Gary Gensler raised concerns before Congress about market manipulation in crypto and investor protection. Market manipulation has been raised as a key concern by the regulator in rejecting past bitcoin ETF applications.
Bitcoin Stalls at Resistance, Minor Support Nearby
Bitcoin (BTC) pulled back after approaching initial resistance at $32,000. Short-term momentum is improving, which could keep buyers active above the $30,000 support level as bullish sentiment returns.
Buyers have consistently taken profits along the intermediate-term downtrend defined by a series of lower price highs on the charts. There is strong resistance at around $32,000-$34,000, which could limit upside price moves.
Bitcoin was trading at around $31,700 at press time and is roughly flat over the past week.
- The relative strength index (RSI) on the four-hour chart is approaching overbought territory, which could encourage further selling over the short-term.
- The daily RSI is rising from oversold levels since Tuesday and displays a bullish divergence. Higher lows on the daily RSI suggests the intermediate-term downtrend is slowing.
- Bitcoin remains in a tight range of between $30,000 and $36,000 as the broader uptrend weakens.
Related: Bitcoin Looks North After Biggest Single-Day Rise in More Than a Month
Related StoriesBitcoin Stalls at Resistance; Minor Support Nearby
Bitcoin (BTC) pulled back after approaching initial resistance at $32,000. Short-term momentum is improving, which could keep buyers active above the $30,000 support level as bullish sentiment returns.
Buyers have consistently taken profits along the intermediate-term downtrend defined by a series of lower price highs on the charts. There is strong resistance around $32,000-$34,000, which could limit upside price moves.
Bitcoin was trading around $31,700 at press time and is roughly flat over the past week.
- The relative strength index (RSI) on the four-hour chart is approaching overbought territory, which could encourage further selling over the short-term.
- The daily RSI is rising from oversold levels since Tuesday and displays a bullish divergence. Higher lows on the daily RSI suggests the intermediate-term downtrend is slowing.
- Bitcoin remains in a tight range between $30,000 and $36,000 as the broader uptrend weakens.
Bitcoin Looks North After Biggest Single-Day Rise in More Than a Month
Bitcoin appears to have found its footing after Wednesday’s near 10% rise, the biggest gain since July 17, and may soon challenge the upper end of its months-long trading range of $30,000 to $40,000.
“We are now short-term bullish to the topside against the $30,000 region triple-bottom with strong bullish divergence,” Singapore-based QCP Capital said. “In addition to this, the market is short gamma to the topside – a break above $35,000-$36,000 could trigger a quick short squeeze towards the $40,000-$42,000 range top.”
Bitcoin bears have failed at least three times in the past two months to establish a foothold under $30,000. While prices did close (UTC) below the key support earlier this week, Wednesday’s jump to $32,000 negated the bearish breakdown.
Related: Bitcoin Stalls at Resistance; Minor Support Nearby
The persistent defense of the $30,000 mark has taken the shape of a so-called triple bottom pattern on the daily chart, which also shows a bullish divergence of the relative strength index (RSI). The pattern occurs when the indicator prints higher lows, contradicting weakness in price, and is a signal of seller exhaustion and scope for a price bounce.
The 50-day simple moving average (SMA) at $34,500 may offer immediate resistance. According to Katie Stockton, founder and managing partner of Fairlead Strategies, a breakout above the 50-day SMA would target the 200-day SMA near $44,000.
Patrick Heusser, head of trading at Crypto Finance, also pointed to $35,000 as a critical level. “Orderbook flow looks good, but a lot of stale selling orders are coming up in the $35,000 area, which still need to be cleared,” Heusser said.
Lastly, market participants who went “short gamma” by selling call options – or insurance against bullish moves – at or above $35,000 over the past few weeks may resort to hedging, that is buying spot or futures, if prices rise above $35,000.
Related: Market Wrap: Bitcoin Climbs as Elon Musk Tames Shorts
That, in turn, may bolster the bullish move, possibly yielding a test of $40,000-$42,000, as anticipated by QCP Capital. Being short gamma means being an option writer (seller) regardless of whether call or put. Traders typically write options when they expect the underlying asset to see low-volatility consolidation.
Bitcoin is currently trading near $31,800, representing a 1% drop on the day, according to CoinDesk 20.
The cryptocurrency rose from $29,800 to over $32,000 yesterday on a string of bullish news. The day ended with tech entrepreneur and provocateur Elon Musk saying that his aerospace company, SpaceX, holds bitcoin. Musk also said that he owns bitcoin, ether, and dogecoin and added that Tesla might relist bitcoin as a payments alternative.
Also read: Elon Musk Says SpaceX Holds Bitcoin at ‘B Word’ Conference
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