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Over the last week, bitcoin’s frenzied rally has eased. JPMorgan analysts reckon that crypto investors have got ahead of themselves. Meanwhile, a senior official at the European Central Bank has warned of a risk in the new EU crypto rules. Here’s what you need to know:
Last Thursday, BlackRock registered to create an Ethereum trust. People speculated that this could be the first step towards BlackRock asking the SEC to approve an ether-linked exchange-traded fund (ETF) in future.
Ever since BlackRock filed an application for a spot bitcoin ETF back in June, crypto investors have become taken with the idea that such a product would unleash a wave of new investment into bitcoin, bringing in people who have previously steered clear. Thursday’s news gave ether (the currency on the Ethereum blockchain) a boost: it jumped to its highest since April.
In all this excitement, there’s just one hitch: there’s no guarantee that the SEC will approve anyof the spot bitcoin ETF applications that have been filed.
Still, the belief that an approval could be round the corner, as well as an improving outlook for risky assets more generally as investors pencil in future interest rate cuts, saw bitcoin rise 29% last month. But, after peaking at $37,978 last Thursday, the price of bitcoin has crept back down in recent days as the excitement wears off.
JPMorgan analysts said that the crypto rally was “rather overdone”. Even if a spot bitcoin ETF does get approved, JPMorgan said that it doesn’t necessarily mean new investors will be brought in. It’s more likely that funds will just move from other bitcoin-related products, the analysts said.
A fake filing appeared to show BlackRock applying to launch a fund based on Ripple’s cryptocurrency, XRP, and caused a brief spike in the token, Bloomberg News reported. It’s not the first timemarkets have been rattled by fake news about such filings.
Elsewhere, the European Central Bank’s chief supervisor Andrea Enria – in other words, the most important banking supervisor in the EU – warned about a loophole in the EU’s rules to protect the financial system from crypto-related risks. Enria said that under current rules, the things that banks do as a “crypto-asset service provider” (such as acting as a custodian or managing crypto portfolios) fall outside of the ECB’s purview.
This means that the ECB doesn’t have a full view of banks’ exposure to cryptocurrencies and can’t effectively apply safeguards.
His proposed solution? Add crypto-asset service providers to the list of financial institutions the ECB supervises, “as a matter of urgency.”
Remember Celsius?:The crypto lender has been cleared to exit its bankruptcy process, start its restructuring plan and partially repay customers. Its founder has pleaded not guiltyto criminal fraud charges.
Fnality fundraise: Goldman Sachs is among the investors backing a UK-based blockchain payments firm.
Turkey’s rules: Turkey will focus on crypto licensing and tax, as it tries to get off the “grey list” for international financial crime.
Law enforcement: The SEC got nearly $5 billion in penalties last year. It’s stepped up its policing of financial misconduct under Democratic leadership.
The technology behind bitcoin has a process designed to slow the number of tokens that get created. In a process called a “halving”, the rewards miners get for producing the tokens are cut in half.
Bitcoin mining companies are trying to lock in profits before this happens.
Italy’s biggest bank, Intesa Sanpaolo, tried to get its customers to shift to a different app-based entity. Consumer associations and lawmakers protested, and the competition watchdog received more than 2,000 complaints. Now, the bank has extended the deadline for customers to opt out.