12/3 FAL Weekly Digest
Welcome to the FAL Weekly Digest, a source for this week’s biggest news articles and crypto market updates.
Here is what you need to know:
Demand for U.S. based Bitcoin exchange traded funds continues to increase as investors increasingly demand exposure to the digital asset.
The Race for a U.S. Spot Bitcoin ETF Heats Up
Demand for exchange traded products (ETPs) such as exchange traded funds (ETFs) continues to grow across the world as mainstream cryptocurrency adoption increases. Following the approval and listing of the first Bitcoin ETF on the New York Stock Exchange (NYSE) in October, several institutions have sought approval for a Bitcoin “spot” ETF where shares of the fund would be backed by actual Bitcoin purchases as opposed to being based on futures derivatives contracts. The SEC has continuously rejected these “spot” based ETFs, claiming a need for investor protections and that BTC futures have already been overseen by the Commodities Futures Trading Commission (CFTC) for four years.
One of the contenders in the race for a true “spot” Bitcoin ETF is digital investment group Grayscale, which has already submitted an application to convert their Bitcoin Trust into a true Bitcoin Spot ETF. Grayscale has more recently sent a letter to the SEC arguing that the regulator “has no basis for the position that investing in the derivatives market for an asset is acceptable for investors while investing in the asset itself is not.” The letter highlights the inconsistencies in the SEC’s ruling regarding BTC ETP’s, particularly focusing on the SEC’s shift to claiming that derivatives (speculative contracts) are a safer investment than holding the asset itself.
While investment groups continue to wait for U.S. regulators to change their stance regarding spot ETF’s, several firms have begun to look towards the international market. U.S. based investment firm Fidelity Investments has launched a spot BTC ETF on the Toronto Stock Exchange in Canada, and asset manager WisdomTree has listed its “Crypto Mega Cap Equal Weight” ETP on exchanges in France, Germany, and the Netherlands. If U.S. regulators continue to have unfavorable stances towards cryptocurrency based investment products, fund managers will likely look to the international markets that have much more favorable policies.
Market Update - Bitcoin
The overall cryptocurrency market capitalization is about $2.45 trillion USD, a 0.4% decrease from last week’s valuation of $2.45 trillion. At the time of publication, Bitcoin ($BTC) is valued at $53,255 per bitcoin with a market capitalization of $1.01 trillion making up 41.18% of the overall market.
Global financial markets continue to falter as news of the omicron Covid-19 variant’s spread beyond the initial regions of exposure continues. Atleast five U.S. states have now confirmed cases of omicron, including multiple confirmed cases in New York and California. While the markets grapple with revived Covid fears, Chinese real estate developer Evergrande has recently stated there was “no guarantee” it would have enough funds to meet debt repayments prompting the Chinese government to begin interventions and meetings with the embattled real estate developer.
Bitcoin ($BTC) continued to struggle to breach the $60,000 resistance level as it retested the current downtrend multiple occasions throughout the week. The greater macro uptrend established from late July (blue line) has not been broken so far. At the time of publication it has fallen to fresh lows of about $53,000, coinciding with the S&P 500, DJIA, and NASDAQ which have all suffered losses this week. For a more in-depth technical analysis, see our article found here.
Jack Dorsey Reshapes His Businesses
Jack Dorsey has announced on Monday that he will step down from his role as CEO of Twitter. Dorsey is the founder and current CEO of both Twitter and the digital payment company Square. While both companies have performed well under Dorsey’s direction, there have been some criticisms from investors that Dorsey should step down as CEO from one as performing the role of chief executive officer in two publicly traded companies simultaneously could inhibit future growth in each company. Parag Agrawal, Twitter’s chief technology officer, has been nominated to takeover the CEO position in Dorsey’s absence. Many speculate Dorsey will use this opportunity to fully commit to creating Bitcoin/blockchain related products and services.
Following Dorsey’s departure from Twitter, Square announced on Wednesday that it will be changing the company name to “Block” as it reorganizes the structure behind the various businesses that it owns. Block will now be comprised of the digital payment company Square, mobile payment service Cash App, music streaming platform Tidal, Square’s new crypto-centric branch “Spiral”, and Dorsey’s decentralized Bitcoin exchange “tbDEX.” For more information regarding Square’s transition into the third dimension, see our full article found here.
Tokens Tokens Tokens! Ethereum Token Breakdown
The amount of projects and tokens operating on the Ethereum network continues to grow as more and more users participate in the Ethereum ecosystem. Part of creating a project on Ethereum involves having a deep understanding of the coding standards and the differences between the types of tokens on the Ethereum blockchain. Our lead developer Stephen Arancio has created an in-depth guide to Ethereum token standards and the differences between ERC-20, ERC-721, and ERC-1155 tokens found here.
FTX Adds Ethereum NFTs to its Marketplace
Popular cryptocurrency exchange FTX has announced that it will now support Ethereum based NFT purchases in addition to the Solana NFTs currently found on the marketplace. The FTX NFT marketplace is now the first of its kind to offer more than just one blockchain’s NFT assets on its platform.
FTX’s marketplace will also allow users to purchase these NFTs priced in USD using their credit card as opposed to only pricing the assets in their native blockchain currency such as $ETH or $SOL. Transaction fees will also be much lower compared to NFT transactions on OpenSea due to FTX marketplace NFT transactions taking place off-chain.
This release marks a significant challenge to OpenSea’s dominance over NFT marketplace trading volume. More than $10 billion USD in volume has been traded on OpenSea just in 2021 alone, and competitors such as FTX and Coinbase are eager to expand into the NFT realm as more users enter the space. For more information, be sure to see our in-depth analysis found here.
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