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Grayscale Pushes SEC to Approve Bitcoin Trust Conversion to ETF Following Recent Court Ruling
Grayscale Investments is pressing the U.S. Securities and Exchange Commission (SEC) to approve its proposal to convert the Grayscale Bitcoin Trust into a spot Bitcoin exchange-traded fund (ETF). In light of a recent ruling by the U.S. Court of Appeals for the D.C. Circuit, Grayscale's lawyers are emphasizing that their trust should not be treated differently from Bitcoin futures ETFs, which have received SEC approval. The court's decision critiqued the SEC's disparate treatment of spot Bitcoin ETFs versus futures-based funds.
While no spot Bitcoin ETF has been approved by the SEC yet, the recent court opinion might influence decisions on pending applications from significant players like BlackRock and Fidelity. The SEC could potentially request a rehearing, await a detailed mandate post the 45-day window, or even seek a Supreme Court review on the matter.
Visa Expands USDC Settlement Service to Solana Blockchain
Visa has expanded its stablecoin settlement system to allow partners to send and receive USDC payments via the Solana blockchain. The company can now forward USDC-denominated payments to Worldpay and Nuvei, which can subsequently send these payments to their respective merchants. Visa's integration aims to modernize and expedite the settlement process for crypto-centric issuers, simplifying their card program management. This initiative aligns with Visa's ongoing strategy of connecting traditional finance with the cryptocurrency domain and follows their tests with USDC in their treasury operations last year.
China's Shandong Province Aims to Grow Metaverse Industry to $20.5 Billion by 2025
China's Shandong province is making strides to boost its metaverse industry, aiming for a market size of 150 billion yuan (US$20.5 billion) by 2025. The provincial government plans to establish several metaverse-related industrial parks and foster the growth of at least 100 metaverse companies. Furthermore, they aim to support businesses in obtaining over 3,000 patents by 2025, both domestically and internationally.
The province's definition of the metaverse includes a blend of technologies such as virtual reality, blockchain, and artificial intelligence. Despite China's ban on cryptocurrency transactions, it remains optimistic about its domestic blockchain technologies and digital economies. Other provinces, like Sichuan, have set similar ambitious targets for the development of their metaverse sectors.
Trading Desk Insights
Stock futures are showing a modest decline, indicating a potential pullback on Wall Street for today's session. The uptrend in oil prices, reaching their peak since November due to extended supply cuts by Saudi Arabia and Russia, contributes to this sentiment. The surge in oil prices plays into broader concerns about inflation. This subsequently influences bond yields and anticipations regarding the Federal Reserve's next moves.
On the economic data front, we are awaiting the Fed’s beige book at 2pm EST that summarizes economic activity in the US. This morning at 10am EST, we are also expecting an announcement from the Bank of Canada regarding an interest rate decision. The market expects the central bank to hold rates steady after the economy shrank in Q2.
Bitcoin continues to trade sideways with no clear direction in sight. Given that we keep testing the previous lows, it still makes more sense in terms of risk reward to go long, but it seems that eventually we will break this price range to the downside. Both BTC and ETH are set to close at their lowest level since the month of June, a sign of weakness. Volatility smiles showed minimal change in terms of level, but did show a significant change in skew to the put side. A break above 26,300 would be important to trigger additional bullish implications. A break past the support of 25,000 would drag prices much lower.
Economic calendar:
MONDAY
US Bank Holiday
TUESDAY
N/A
WEDNESDAY
US ISM Services PMI
US Fed Beige Book
Bank of Canada interest rate decision
THURSDAY
US unemployment claims
FRIDAY
CAD unemployment rate
China CPI
Technical Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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