Fueled by the excitement surrounding bitcoin spot ETFs and legal victories by industry giants against the US Securities and Exchange Commission (SEC), the crypto asset market, and bitcoin in particular, has once again regained unexplored valuations for 18 months. But the question lingers in the mysteries of speculation: is this momentum a prelude to a sustained rise, or just a passing blip? We return to this in Cryptic Analysis after the essential messages to remember.
Block 1: Essential news
- Tether, towards greater transparency
Tether, the company issues USDTthe most capitalized stablecoin on the market, predicts to make its reserves transparent and verifiable in real time by 2024. This approach follows criticism over the lack of transparency of reserve management and a fine received in 2021. Although Tether has started publishing quarterly updates of its reserves, many consider them insufficient as they are only certifications and not complete audits. The goal is to achieve full transparency and thereby increase trust in USDT.
- France: towards the regulation of Web3 games
The French National Assembly has approved a bill aimed at regulating Web3 games with monetizable digital objects (Jonum), such as Play-to-Earn games. This regulation, with a trial period of three years, imposes standards of transparency, integrity and protection of minors on Jonum companies. Although the text is perceived as beneficial for clarifying the legal framework and supporting the development of the sector, actors such asUbisoft express reservations, fearing that the regulations are too burdensome and restrictive and potentially hinder innovation in Web3 games.
- Sam Bankman-Fried is expected to perform
Sam Bankman-Fried (SBF), former CEO of cryptocurrency exchange FTX, is is expected to testify during his ongoing trial in the United States. Exceptionally, the accused himself will appear, who will face questions regarding the revelation of massive fraud in FTX by his former associates. SBF lawyers have so far struggled to present a convincing defense and SBF could be sentenced to more than 100 years in prison if the allegations are proven true. Testimony that could prove crucial is set to continue, with cross-examination expected on Friday.
- Mastercard partners with MoonPay
MasterCard yours partner to MoonPay, a crypto-payments company, to explore how Web3 technologies can enhance “experiential marketing,” which aims to create immersive experiences and establish emotional connections with brands. This collaboration was announced during the Money20/20 event in Las Vegas. MoonPay will use Mastercard Web3 technologies, including the Mastercard Crypto Credential, and will also integrate Mastercard’s non-crypto-native solutions into its services. This initiative reinforces Mastercard’s growing interest in blockchain solutions.
— MoonPay 🟣 (@moonpay) October 25, 2023
Block 2: Cryptic analysis of the week
As the cryptosphere watched the Sam Bankman-Fried trial, Bitcoin regained color this week, flirting with the technical and psychological $35,000 mark, a zone uncharted since the May 2022 crash of TerraUSD and Luna. The crypto-asset industry has since been marked by a series of catastrophic events, including a series of insolvencies and bankruptcies that have overshadowed the sector over the past year and a half.
However, renewed interest from investors has reignited a new wave of speculation in the market this week, fueled by winds of optimism aroundIntroducing a BTC-backed spot exchange-traded fund (ETF). But that is not all.
this monday decisive legal victory for the crypto asset management titan, Grayscale against the US regulator, also served as a catalyst that once again sent positive waves through the market. Subsequent speculation fueled the belief that approval of the Bitcoin Spot ETF by the US Securities and Exchange Commission (SEC) could be an imminent reality. This is especially indicated by sector magnates such as the Winklevoss twins, co-founders of the Gemini platform.
The window to buy Bitcoin before the IPO is closing fast.
— Cameron Winklevoss (@cameron) October 23, 2023
And it wasn’t the first time Bitcoin was buoyed by ETF optimism over the past seven days. October 16The token has seen an intraday increase of 10% after rumors that the SEC had already approved a BlackRock bitcoin spot ETF, but demand then dropped when it appeared that the green light was not given after all.
While the immediate realization of such an ETF is still pending, the speculative wind surrounding these bitcoin equity products has significantly helped bitcoin double its valuation since the beginning of the year.
Development of BTC since the beginning of the year
But the crypto landscape remains riddled with uncertainty, raising questions about the sustainability of the market’s current enthusiasm. As a reminder, the SEC approved its first ETF linked to Bitcoin futures in 2021, a decision that traders believed would mark a turning point in the adoption of cryptocurrencies by the general public. The year that followed ended up being probably the most dramatic crypto investors have ever experienced.
Back then, the first issuer to launch absorbed most of the demand, leaving little volume for other funds to follow later. That war is expected to repeat itself this time around, with BlackRock, Invesco and Fidelity vying to be first in line.
There are also macroeconomic differences. Compared to 2021, Bitcoin faces a more challenging environment with rising US Treasury yields and general risk aversion in the markets. Finally,Former SEC attorney Tom Gorman says SEC approval of a bitcoin ETF is not guaranteed, could take time, and will require significant regulation to avoid the risks associated with these assets. You can find his interview below.
Ultimately, despite all the hype surrounding these ETFs, the question remains: Will spot ETFs really appease investors who are most reluctant to gain exposure to crypto-assets? And will it really encourage institutional investors to acquire bitcoins through the well-known processes of traditional financing? Bets are open.
Block 3: Tops & Flops
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Block 4: Reading of the week
Sam Bankman-Fried will testify in his own trial. This is a legit Hail Mary (Wired, in English)
The Fallen King of CryptocurrenciesSam Bankman-Fried, was “perfectly placed to make a religion out of himself” (Interview, in English)