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 recent news you might have overlooked this week.
Genfinity Weekly News Recap – Apr 11, 2024
Bitcoin & Ethereum
Ethereum experienced a surge in value during the early hours of Monday, surpassing Bitcoin’s relatively stable performance. This rise saw Ethereum prices reaching $3600, while Bitcoin hovered around $71,000.
Conversely, on Tuesday, Bitcoin experienced a decline below $69,000 as the cryptocurrency market saw a slide, following a period of optimism spurred by Monday’s rally. Bitcoin slipped to around $68,580 from its previous level above $71,000. The downward movement triggered significant liquidations, with approximately $200 million worth of leveraged derivatives trading positions also being liquidated across all digital assets. With these figures being reported upon by CoinDesk, we also saw a rise back up to 70K on Wednesday. At the time of writing, Bitcoin is at $70,600.
Bitcoin ETFs
According to Reuters, Michael Sonnenshein, CEO of Grayscale Investments, stated that outflows from the Grayscale Bitcoin Trust (GBTC.P) seem to be stabilizing after months of investor selling. Grayscale has faced competition in the Bitcoin exchange-traded fund (ETF) market, with the emergence of rival offerings from nine other issuers since January.
Despite outflows totaling over $15 billion in the last three months, Grayscale’s assets under management have only slightly decreased to $23.13 billion, aided by the surge in Bitcoin’s value. Sonnenshein noted that the fund appears to have reached equilibrium, with anticipated outflows potentially behind them, including selling related to bankruptcy settlements of FTX and other defunct crypto companies. Daily outflows, though still negative, have decreased from March’s levels, with Monday seeing outflows of $303 million.
Looking ahead, Grayscale aims to attract more investors and innovate its product offerings, possibly competing with newer offerings from BlackRock and Fidelity. Grayscale plans to seek SEC approval for a Bitcoin Mini Trust with lower fees, as its current fee of 1.5% is higher than its rivals’ average of about 0.25%. Sonnenshein expressed optimism about winning SEC approval for a spot Ethereum ETF and expects the SEC to permit such products to come to market.
Additionally, the next day, CoinDesk reported that Bitcoin outflows for Grayscale were at their lowest daily record since ETFs were first approved.
Ethereum ETFs
CoinDesk reported that JPMorgan believes the chance of a spot Ethereum ETF approval in May is no more than 50%. If the SEC doesn’t approve the products, litigation against the regulator is expected. JPMorgan predicts eventual approval for spot Ethereum ETFs, though not in May.
Recent SEC investigations into Ethereum Foundation-associated companies align with JPMorgan’s skepticism. The bank expects the SEC to lose potential litigation, as seen in previous cases like Grayscale and Ripple. One reason cited is the decreasing concentration in staking on Ethereum, reducing concerns about Ethereum being labeled as a security.
Meme Coin Index ?!
WOO X, in collaboration with Wintermute and GMCI, launched index perpetual contracts tied to meme coins, top cryptocurrencies, and layer-2 tokens. This initiative follows WOO X’s recent $9 million funding round, backed by Wintermute and Amber.
Traders can now access GMCI’s MEME index, covering popular meme coins like SHIB, PEPE, and DOGE, as well as an L2 index tracking scaling tokens such as MATIC, IMX, and OP. These indexes mirror traditional finance’s approach, offering traders diverse exposure through linked products. Covered by CoinDesk, WOO X plans to introduce copy-trading and on-chain U.S. Treasury bills soon, according to COO Willy Chuang.
For a considerable segment of the crypto community, meme coins aren’t just digital assets; they symbolize personal identity, core beliefs, and an exhilarating investment opportunity. These individuals see meme coins as more than just speculative assets; they view them as a reflection of their values and a way to participate in a vibrant and dynamic digital culture.
However, for some, meme coins are simply part of the “crypto casino,” where speculative frenzy and high-risk trading dominate. They may view these coins as volatile and unpredictable, akin to gambling rather than strategic investment. Thus, while meme coins hold different meanings for different people, they undeniably represent a fascinating intersection of culture, finance, and technology within the crypto space.
The SEC targets Uniswap
The U.S. Securities and Exchange Commission’s (SEC) potential enforcement action against Uniswap Labs, revealed in a recent blog post, underscores the regulator’s growing scrutiny of digital asset-related companies. While the exact reasons for the SEC’s warning remain undisclosed, it’s likely part of the regulator’s broader campaign to apply U.S. securities law to cryptocurrency firms, similar to its ongoing battle with Coinbase.
Reported by Reuters, Uniswap’s receipt of a Wells Notice, indicating impending legal action, marks the latest development in the SEC’s prolonged conflict with the crypto industry. This move represents an escalation, given the SEC’s previous lawsuits against centralized exchanges like Coinbase and Kraken. Uniswap’s announcement of the Wells Notice suggests that the SEC’s actions may be politically motivated, targeting even reputable blockchain technology developers.
Despite the uncertainty surrounding the potential charges, the news raises concerns about legal risks for decentralized finance (DeFi) platforms like Uniswap. The SEC’s past actions and ongoing cases against other decentralized platforms highlight the regulatory uncertainty facing DeFi projects. Why is the SEC’s scrutiny of the DeFi sector intensifying, and why go after decentralized exchanges (DEX)?
Regulation
In a recent report, the Bank for International Settlements (BIS) has underscored the challenges facing stablecoins due to regulatory fragmentation across jurisdictions. Although many regulatory approaches share similarities in authorization, reserve requirements, and risk management, differences in structuring and definitions lead to varied regulations. For instance, while some nations treat algorithmic stablecoins similarly to fiat-pegged stablecoins, others regulate them separately or even ban them entirely.
This regulatory disparity complicates integration into the global financial system, posing significant challenges. Reserves, audit, and liquidity requirements exhibit substantial variation, while technological standards tend to be more consistent. Moreover, stablecoins’ interaction with central bank digital currencies and other digital assets requires further exploration.
The BIS report aligns with its recommendations on stablecoin regulation from February, emphasizing the need for governments to cooperate and address key issues. Additionally, various international bodies, including the International Monetary Fund and the Financial Stability Board, aim to advance policies on stablecoins, reflecting the growing global attention to this issue.
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