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BTC’s price has gained 7% over the past week as Traditional Finance ramps up involvement in the crypto sector.
The SEC has been on a rampage the past few months, filing lawsuits against companies and cryptocurrencies they believed to have offered “unregistered securities”. Amidst the chaos, traditional finance companies are seizing the opportunity – targeting coins that have escaped the regulatory body’s ire. Bitcoin, the OG crypto asset, has been one of the big winners. With institutional investment pouring in, BTC’s value has soared past $30k for the first time in over two months.
Several big players from the TradFi world have entered the game. Fidelity, Citadel and Charles Schwab banded together to create a new stock market-esque crypto exchange – EDX Markets.
Trillion-dollar investment managers, Deutsche Bank, BlackRock and Invesco have all filed for Bitcoin ETFs. And Grayscale Bitcoin Trust (GBTC), a Bitcoin derivative available on traditional stock exchanges, saw its trading volume skyrocket by 100% in just a couple of weeks.
But some investors view the surge in interest from traditional finance operators with scepticism. Some of these companies are worth more than the entire cryptocurrency market – and their coordinated entry can be interpreted as an organised takeover. Given the power and resources of businesses like Invesco and BlackRock, it isn’t hard to imagine these institutions compromising the decentralised philosophy of blockchain-based markets.
On the flip side, others see the events as a step towards legitimising the crypto industry. Many believe that global adoption, while not ideal to some people, requires the involvement of TradFi players to ensure the safety of consumers. Either way, the development has been good for Bitcoin’s short-term price – could it be the catalyst for a bull run? Only time will tell, given it was doom and gloom just two weeks ago with the SEC actions.
Colombia’s central bank, Banco de la República, has partnered with Ripple and Peersyst to explore the use of blockchain technology on the XRP Ledger.
The goal? To explore the potential of blockchain technology on the XRP Ledger and Ripple’s central bank digital currency (CBDC) platform. This collaboration, under the supervision of Colombia’s Ministry of Information and Communications Technologies, marks a significant step towards revolutionising the country’s financial infrastructure.
The partnership signifies the growing recognition of blockchain’s potential to transform traditional financial systems. While the initiative may increase interest in XRP, the success of the pilot project hinges on several factors, such as legal requirements, technological feasibility, and public acceptance.
The project holds promise for strengthening Colombia’s financial infrastructure, enhancing security, and fostering innovation. Stakeholders should closely monitor the progress of this pilot project, as it could pave the way for broader adoption of blockchain-based solutions in Colombia and beyond.
The bullish move comes on the back of TradFi platform EDX Markets going live
The cryptocurrency markets are notorious for their volatility. Still, it’s been quite some time since a top-50 market cap coin elevated quite as impressively as Bitcoin Cash did this past week. The Bitcoin fork (ticker: BCH) started the week at $111. By the 28th of June, the coin was trading at over $229, an absurd increase of 106%.
Article link: https://learn.swyftx.com/altcoins/what-is-bitcoin-cash/
This feat largely seems to be due to the announcement and release of EDX Markets, a cooperative effort managed by TradFi behemoths Fidelity, Citadel and Charles Schwab. The platform posits itself as a middle-ground between digital currencies and traditional stock exchanges and offers BTC, ETH, LTC and BCH. It is designed for institutional investors – so your average crypto trader will be priced out. But institutional investment is basically a synonym for “lots and lots of cash” that may be pumped into the crypto markets through this new exchange.
Even beyond EDX Market’s approval, the good news for Bitcoin Cash keeps on coming. Earlier this year, SEC Chairman Gary Gensler previously claimed that “everything other than Bitcoin” is a security. However, the regulatory body has added to their exceptions, releasing a document that did not list Bitcoin Cash as a security (alongside Ethereum and Litecoin).
Bitcoin Cash forked from Bitcoin in 2017 after the community became divided on whether BTC should remain a global payments currency, or fully transition to a store of value. BCH is largely intended for international transactions among consumers.
The crypto exchanges scrubbed the tokens as the SEC continues to target unregistered securities
Robinhood’s crypto arm isn’t exactly having the best week. First, the team announced that they were cutting support for three of the industry’s biggest altcoins – Solana (SOL), Polygon (MATIC) and Cardano (ADA). Worse yet, Robinhood revealed they were laying off 7% of their staff, equivalent to about 150 employees. All of this went down on the 27th of June, as Robinhood’s crypto manager – Jump Trading – liquidated some $70 million in altcoin holdings.
These moves come after the SEC doubled down on its anti-crypto stance, suing Binance and Coinbase earlier this month. The legal tussles are centred around offering “unregistered securities”, and the SEC recently released a list of cryptocurrencies they consider securities. SOL, MATIC and ADA were all featured, causing crypto brokerages like Robinhood to assess their asset listings.
While Robinhood is on the front foot to avoid a probe, once-popular lending platform Celsius has long been under the SEC’s microscope. The company filed for Chapter 11 Bankruptcy in July 2022, effectively ceasing all operations. As part of Celsius’ re-organisation plan, the company is selling off its customer’s altcoins (valued at $215 million) and converting them into BTC and ETH.
The sell-offs didn’t have a massive impact on ADA, MATIC or SOL’s short-term price. Over the 24 hours between the 27th and 28th of June, ADA dropped 0.34%, SOL 0.46% and MATIC 0.64%.
The SEC approves a new type of Bitcoin ETF as fund managers start wetting their feet in the crypto sector.
The Securities and Exchange Commission (SEC), the leading financial regulator in the United States, approved the first-ever leveraged Bitcoin ETF last week. Volatility Shares manages the fund that offers traders a 2x margin on Bitcoin futures determined by the CME Bitcoin Futures Daily Roll Index. The announcement marks the first instance of a leveraged fund being available on traditional stock exchanges.
The first half of 2023 has been tumultuous for cryptocurrency in the United States, as the SEC has cracked down on companies (Binance, Coinbase and Ripple Labs) while also rejecting several Bitcoin ETF applications. Many were dubious that Volatility Shares’ proposal for a leveraged Bitcoin derivative would succeed, given their recent actions. But it appears the regulators have had a change of heart, at least in relation to a leveraged ETF,and may be a sign of things to come.
The 2x Bitcoin Leveraged ETF (ticker: BITX) has granted confidence to other TradFi players looking to get the ball rolling. Several companies have joined the queue and submitted applications to the SEC for their very own crypto ETFs. Participants include: