19 November

“The added pressure comes after Genesis Global Capital, an arm of Digital Currency Group (DCG), owner of Grayscale Investments, which manages GBTC, announced this week that it would halt customer withdrawals from its lending unit. According to QCP Capital, many observers are now expecting DCG to ‘use the most liquid part of the business – Grayscale – to shore up Genesis and other parts of the business.’

The friction is that Grayscale would then have to give up rights to a contractual stream of fees, currently 2% of assets under management. There’s also the question of DCG’s own holdings of GBTC. In October 2021, DCG said in an announcement it had purchased $388 million worth of GBTC shares.

Those expecting GBTC to allow a one-off redemption for Genesis to meet liquidity needs are misguided, as this has to be done with the SEC’s approval. On the bright side this also means a low chance of a large one-off BTC selling pressure from this.

For some investors, the recent widening of the discount may have made the vehicle even more attractive: Bloomberg reported that Cathie Wood’s Ark Investment Management bought more than 315,000 shares worth roughly $2.8 million of GBTC shares earlier this week.”

See Also: Genesis Sought $1B Bailout From Investors Before Halting Withdrawals: Report
See Also: FTX Catastrophe Likely Triggered By Terra Collapse: Nansen

London-based investment manager Man Group Plc is preparing to launch a cryptocurrency hedge fund, signaling continued investor appetite for digital assets in the wake of FTX’s monumental collapse earlier this month. By the end of September, Man Group had $138.4 billion in assets under management.

Institutional appetite for digital assets like Bitcoin (BTC) has grown over the past two years, driven partly by the recognition that crypto represents a new investment class. However, broad institutional exposure to crypto has been hindered by a lack of clear regulations and the perception that fiduciary standards prevent fund managers from openly advocating for the sector.”

See Also: Bitcoin Holds Fast Over 16K
See Also: 4 Key Takeaways from the FTX Fiasco

The Chief Growth Officer at METACO believes all financial assets will eventually be represented on distributed ledgers. As such, Donoghue mentioned that there is an imperative to redesign the financial market infrastructure.

This is the reason why virtually all tier-1 banks are now investing in building new infrastructure: not for the currently bearish crypto market, but for the much larger vision of how every asset will be represented and how value will be created and exchanged, globally.

Donoghue added that banks will eventually become the bridge for institutions seeking exposure to digital assets and DeFi. He explained that this is due to the fact that traditional financial institutions have consumer trust, large balance sheets and a network of market participants creating liquidity, along with a customer base with unmet needs.

The crypto market is not much of a factor affecting banks, particularly when it comes to DeFi. For instance, he pointed out that JPMorgan used Polygon to conduct a live cross-currency transaction that involved tokenized Singapore dollar and Japanese yen deposits, along with a simulation of tokenized government bonds. According to Butler, those assets have no correlation with crypto prices.

Essentially, financial institutions are looking for ways to tokenize traditional assets — and this could be anything, from bonds and fiat currencies to real estate deeds — and transact them digitally. The latest advancements in DeFi can help make the whole process of transacting significantly more efficient and convenient.”

See Also: BofA: Don’t Tarnish Blockchain Technology With Speculative Crypto Trading

Tether today announced a $1 billion chain swap to convert USDT it had on the Solana blockchain to the Ethereum blockchain. Tether has done this in the past when demand to use its stablecoins shifts from one blockchain to another. For example, in mid-2020, Tether twice swapped $1 billion in USDT from Tron to Ethereum, within the span of two months.

The announcement comes as Solana, which just weeks ago ranked within the top 5 biggest cryptocurrencies by market cap, faces difficulties following the collapse of crypto exchange FTX. Solana now ranks 16th by market cap and is down 25.4% in the last seven days. It is currently trading hands for $13.33, down 95% from its all-time high of $256.

FTX, once one of the biggest exchanges, has deep ties to Solana: the company has invested heavily in several Solana-related crypto projects and was instrumental in developing Solana’s primary decentralized exchange and DeFi liquidity provider, Serum.”

“[The Subcommittee on Economic and Consumer Policy] is seeking detailed information on the significant liquidity issues faced by FTX, the company’s abrupt decision to declare bankruptcy, and the potential impact of these actions on customers who used your exchange.

The action comes on the heels of the House Financial Services Committee’s announcement that a hearing about FTX’s collapse will be held next month. Across Capital Hill, Senators Elizabeth Warren (D-Mass.) and Richard Durbin (D-Ill.) have also sent their own letter to FTX asking for answers.”

See Also: FINRA Targets Crypto Communications/Ads After FTX Collapse
See Also: Bahamas Securities Regulator Says It Ordered FTX Crypto Transferred to Government Wallets

“The firm sees real potential in the technology creating new and more efficient ways for businesses and consumers to interact with each other. Mabbott stated that virtual interactions on metaverse platforms could not only revolutionize client engagement and service delivery but potentially also open up additional revenue streams for the firm.

I think there will be an explosion actually in terms of uptake and use and applicability of these technologies as well.”

“The system will walk the line between preserving privacy and allowing regulators and auditors a backdoor into the system when permission is granted.”

See Also: Cardano-Based Regulated Stablecoin USDA Will Hit the Market in Early 2023