24 Hrs in Crypto - October 17, 2023
The daily crypto update for institutional investors
In An Interview With Fox Business, BlackRock (NYSE: BLK) CEO Larry Fink Characterized Yesterday’s BTC Rally As A ‘Flight To Quality’ In Light Of The War In Israel & Other Geopolitical Concerns - Fink Has Previously Endorsed The View Of BTC As A Hedge Against Broader Uncertainty
The BlackRock CEO was asked to comment on the BTC rally, which was sparked by crypto news outlet Cointelegraph falsely reporting that the SEC had given a green light to the firm’s spot BTC ETF. Fink responded that the rally is an example of ‘pent up interest in crypto.’ Fink, who uses the term ‘crypto’ and ‘bitcoin’ interchangeably, goes on to mention that clients around the world have expressed ‘the need for crypto.’ Fink concludes that in light of global upheaval, ‘there are more people running into a flight to quality, whether it's in treasuries, gold or crypto.’ According to Fink, ‘crypto will play that type of role’ in regards to a ‘flight to quality.’ In a July interview with Fox Business, Fink made similar remarks. He described BTC as an alternative to gold ‘as a hedge against inflation, a hedge against the onerous problems of any one country, or the devaluation of your currency…’ Fink added that ‘bitcoin is an international asset, it’s not based on any one currency and so it can represent an asset that people can play as an alternative.’
At the end of last month we noted that BTC was rallying into a potential US government shutdown. We noted that the performance was akin to BTC’s price action during the March/April US banking crisis. BTC gained 34% over the period as the banking crisis unfolded. The token’s largest daily trading volume for far in 2023 came in April. As FRNT CEO Stephane Ouellette explained to Bloomberg, in April/March, ‘we actually saw [BTC] rally as a sort of safety-hedge against further banking unrest.’
Takeaway: BTC’s role as a safe haven against broader economic turmoil is well-established among the coin’s most dedicated investors, those adhering to the HODL mantra. In fact, the first block in the network featured the message ‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.’ Larry Fink’s remarks may serve to popularize the notion of BTC as a ‘flight to quality’ asset beyond the token’s core investor base and community.
CRYPTO HEADLINES
FTX has announced a proposed settlement of customer property disputes to resolve related litigation filed against the debtors. The group said the proposed settlement would be filed in an amended restructuring plan on December 16, and if approved by the bankruptcy court, would take place in Q2 2024. The plan includes efforts to distribute assets recovered by the restructuring team to creditors, and eliminate uncertainty related to preference exposure. - link - @FTX
Binance will restrict new users in the UK from accessing services on its platform starting Monday. Last week, new rules from the UK Financial Conduct Authority (FCA) took effect, intensifying the requirements for crypto firms communicating financial promotions. Binance had originally hired UK-based Rebuildingsociety.com to approve relevant marketing communications to local customers, but the FCA subsequently restricted the activity. - link - @Bloomberg
Bankrupt lender crypto Genesis has been ordered by a US judge to comply with a subpoena of Terraform Labs. The company had previously failed to provide the SEC with documents last month in connection to its lawsuit against Terraform Labs and its founder, Do Kwon. The judge set a deadline of five days from October 13 for Genesis to produce ‘all documents that are responsive to the Subpoenas.’ - link - @TheBlock
Squads Labs, a startup building self-custody products on Solana, have closed a USD 5.7M strategic funding round. The raise was led by Placeholder VC, and included participation from Multicoin Capital, Solana Ventures, and Jump Trading’s crypto arm, among others. - link - @TheBlock
Tether has frozen 32 wallet addresses holding USD 873k worth of crypto ‘linked to illicit activity in Israel and Ukraine.’ The company added that it has been working with Israel’s National Bureau for Counter Terror Financing with the aim of blocking terrorism and warfare funded by crypto. - link - @Tether
Ernst & Young announced Fidelity’s crypto unit has become the first enterprise client for its blockchain data analytics platform. The web-based tool, EY Blockchain Analyzer: Reconciler, is a risk management application aimed to help users ‘derive wallet addresses and query on-chain data from an independent third party.’ - link - @EY
The European Securities and Markets Authority (ESMA) urged crypto firms to apply with national regulators under the expected Markets in Cryptoassets (MiCA) regime. The rules are set to come into effect in January 2025, however firms registered prior to the date can be grandfathered into an 18-month transitional phase. ESMA has called on both regulators and industry participants to prepare for the new rules, rather than opt-in to the transitional phase. - link - @Bloomberg
The Basel Committee on Banking Supervision proposed new disclosure requirements for banks with exposure to crypto. In December, Basel finalized rules around capital requirements for banks with certain crypto exposures, and now it is determining what qualitative information and accounting classifications must be disclosed to investors. A public consultation period will take place until the end of January 2024, with the proposed rules taking effect in January 2025. - link - @Reuters
TOP ARTICLES
OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
Bitcoin’s 10% Jump To $30,000 Hints At Trader ‘Playbook’ For ETF Launches, Bloomberg, October 16, 2023
Bloomberg review yesterday's BTC price performance.
CRYPTO MULTIMEDIA
Cathie Wood On 'Spot Bitcoin' Approval, CNBC, October 13, 2023
Ark Invest CEO Cathie Wood talks about her firm's application to list a spot BTC ETF.
CHART OF THE DAY
BTC/USD Price Performance - Fake news that the SEC had approved BlackRock's spot BTC ETF saw the token rally above USD 30,000. The token has continued to trade higher though, and is now ~4% higher compared to prior to the fake news breaking...
