Welcome to the Genfinity Weekly News Recap! As you navigate through your busy work week, staying informed about the latest developments in the realm of Web3 and finance can be a challenge. However, we are here to provide you with an overview of the crypto news you might have overlooked this week.
Genfinity Weekly News Recap
Bitcoin
Coming off the weekend, CoinDesk theorized that the rally back to 70K suggested an end to the recent slump and potentially signals new highs for Bitcoin. Their analysts predicted Bitcoin could reach $83,000 based on technical indicators and dovish central bank policies. Historically, Bitcoin performs well in election years, adding to the bullish outlook.
Bitcoin price surged above $71,000 Tuesday due to several factors. Analyzed by Cointelegraph, more money is flowing into Bitcoin ETFs, and investors are optimistic about the upcoming Bitcoin halving (when mining rewards are cut in half).
- Big investors (whales) are buying more Bitcoin and holding onto it instead of selling on exchanges. This suggests they believe the price will rise.
- The Bitcoin halving event might be overshadowed by strong ETF buying, but it still contributes to a positive outlook.
- Analysts are watching to see if Bitcoin can stay above $70,000 and may even reach $100,000.
At the time of writing, Bitcoin is 70.8K as we head into Friday.
Bitcoin ETFs, ETN + Blackrock
The Bitcoin price surged early Tuesday after the London Stock Exchange announced a market for Bitcoin ETNs. Investors are showing strong demand for Bitcoin, with some banks even surprised by client interest. The broader crypto market also rallied, with some projects linked to Coinbase Ventures gaining the most. This rise erased losses from last week despite lower inflows into Bitcoin ETFs. Analysts believe long-term investors may be taking profits, but it’s not a major concern.
Bitcoin ETFs are attracting fresh investments after a period of outflows. The total inflow for these ETFs on March 26 was $418 million, led by BlackRock’s and Fidelity’s funds. Fidelity’s fund had its largest daily inflow since March 13, at $279.1 million.
Grayscale’s Bitcoin Trust continues to see outflows, but these were outweighed by the inflows into other Bitcoin ETFs. Since converting to an ETF in January, Grayscale has lost almost 277,400 Bitcoins. Despite this, Bitcoin ETFs are showing strong initial performance. Four Bitcoin ETFs made the list of top 30 global funds in their first 50 days of trading.
BlackRock launched the first tokenized fund on a public blockchain, working with partners from both traditional finance and crypto. This could be a new way for asset managers to grow their business. The fund itself is a tokenized money market fund, similar to existing options but notable for its collaboration across industries.
Notably, Hong Kong is expected to approve spot Bitcoin ETFs in the second quarter, allowing investors to exchange ETF shares directly for Bitcoin (in-kind) instead of just cash (unlike US ETFs). This could be a major boost for the Asian crypto market, potentially attracting significant investment from the region and even China.
Regulation
Global
New EU anti-money laundering laws sparked debate about privacy and crime control. While anonymous crypto wallets themselves aren’t banned, crypto exchanges will need to follow stricter Know Your Customer (KYC) rules. This means anonymous accounts won’t be allowed on exchanges, and transfers between exchanges and anonymous wallets may require extra steps. Critics argue these rules hurt privacy and also don’t stop criminals, while others say they mostly align with existing practices in finance.
CoinDesk reported that less than a third of countries worldwide have regulations for cryptocurrency. This lack of oversight creates opportunities for criminals and terrorists. The Financial Action Task Force (FATF) is urging all countries to take action and regulate crypto businesses. They released a report to inform regulators about the issue. The report highlights the risks of unregulated crypto, such as money laundering and terrorist financing by groups like North Korea and ISIS. The FATF wants all countries to implement their recommendations, which include licensing crypto businesses and tracking transactions.
The London Stock Exchange (LSE) is set to launch a market for Bitcoin and Ethereum exchange-traded notes (ETNs) on May 28. This follows a shift in stance by the UK’s Financial Conduct Authority (FCA), which previously banned the sale of crypto ETNs to retail investors in January 2021. The FCA’s March 11 statement indicated they would not object to listings as long as the products are restricted to professional investors.
This move is seen as a significant step towards making the UK a more crypto-friendly environment. The LSE will begin accepting applications for these physically backed ETNs on April 8, with a deadline of April 15 for those hoping to be listed on the launch date. Issuers must submit a prospectus for FCA approval and demonstrate the underlying assets are held “wholly or principally in cold storage.” The exchange’s decision to launch on May 28 aims to maximize the number of issuers participating on the first day of trading.
Cracking down on misleading financial marketing, the UK’s FCA introduced stricter rules for influencers. Social media personalities, or “finfluencers,” now need approval from authorized representatives before promoting financial products, including those in meme format. Covered by The Block, these rules to ensure transparency and prevent scams, especially in the cryptocurrency space where meme-based marketing is prevalent. The FCA is serious about enforcing these regulations, having issued numerous warnings and taken action against illegal promotions in the past.
United States
CoinDesk found that the market for digital versions of U.S. government bonds (tokenized Treasuries) is exploding. Their total value on public blockchains just topped $1 billion for the first time. This surge is likely due to rising interest rates on real Treasuries, making them more attractive. These digital bonds can be traded on blockchains like Ethereum and offer crypto investors a way to spread their investments and make transactions more easily.
Ripple
Cryptocurrency firm Ripple is facing a hefty fine from the SEC. Ripple executives took to social media to criticize the proposed $2 billion penalty, arguing it has no basis in fraud or prior cases. They vowed to challenge the SEC’s accusations, which center around the sale of XRP tokens as unregistered securities. While Ripple has secured some legal victories regarding XRP’s classification, the company is still looking to expand its payments business within the US.
Compared to established tech giants like Nvidia, the XRP token trades at a significantly higher valuation. While XRP boasts a price-to-sales ratio of over 61, Nvidia sits at a more modest 37. Reported by Cointelegraph, this metric, calculated by dividing market cap by annual sales, suggests XRP might be priced more speculatively. Despite some recent gains, XRP’s price remains under pressure due to the ongoing SEC lawsuit.
Furthermore, a high price-to-sales ratio suggests a company’s stock price is relatively expensive compared to its actual sales. It could mean investors are more optimistic about future growth or the company isn’t using invested funds efficiently. The average P/S ratio depends on the industry, so it’s best to compare companies within the same sector.
KuCoin
The US Department of Justice charged cryptocurrency exchange KuCoin and its founders for failing to prevent illegal activities. The charges allege that KuCoin didn’t comply with anti-money laundering regulations, allowing it to be used for money laundering and other crimes. Prosecutors say KuCoin didn’t require customer identification until 2023, never filed suspicious activity reports, and actively marketed itself to US customers seeking to avoid regulations.
KuCoin is accused of operating as an unlicensed money transmitter and failing to maintain an AML program. This lack of compliance allegedly allowed billions of dollars in criminal proceeds to be laundered through the exchange. The founders of KuCoin face charges with potential sentences of 5-10 years in prison, and the investigation is ongoing.
We hope you enjoyed our Genfinity Weekly News Recap! Stay tuned to our website for podcasts, news, and other relative Web3 information.
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