After the sentencing of Sam Bankman-Fried to nearly 25 years in prison for his role in FTX’s financial mismanagement, attention shifts to his former associates. The cryptocurrency world eyes the upcoming Bitcoin halving, expected between April 18 to April 22, 2024. Blackrock’s Ishares Bitcoin Trust (IBIT) sees its holdings skyrocket past 252,011 BTC. Ethena announces […]
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Multiple US banking groups are seeking inclusion in the Bitcoin exchange-traded funds (ETFs) landscape, prompting a request for a rule change to facilitate their participation.
In a Feb. 14 letter to SEC Chair Gary Gensler, a coalition comprising the Bank Policy Institute, the American Bankers Association, the Securities Industry and Financial Markets Association, and the Financial Services Forum advocated their stance.
Crypto custodial
The coalition urged the SEC to reassess a regulation that made it expensive for traditional banks to offer crypto custody services. Current rules require these financial institutions to classify cryptocurrencies as liabilities on their balance sheets. Therefore, the banks must allocate assets equivalent to the crypto holdings to mitigate potential losses and adhere to the strict regulatory capital requirements.
The coalition contended that this rule hampered them from acting as custodians for the newly introduced Bitcoin ETFs, a role they commonly undertook for most other Exchange-Traded Products (ETPs). This limitation, the group argued, stemmed from factors such as the “Tier 1 capital ratio and other reserve and capital requirements.”
They added:
“If regulated banking organizations are effectively precluded from providing digital asset safeguarding services at scale, investors and customers, and ultimately the financial system, will be worse off, with the market limited to custody providers that do not afford their customers the legal and supervisory protections provided by federally-regulated banking organizations.”
The group further emphasized the need to mitigate the concentration risk of a single non-bank entity dominating the custodial services for these Bitcoin ETFs. According to the group, allowing prudentially regulated banks to offer custodial services for SEC-regulated ETFs, akin to qualified non-bank asset custodians, could address this concern.
Coinbase, the largest US-based crypto trading platform, is the unnamed non-bank entity mentioned in the letter. The exchange serves as the asset custodian for 8 of the ETF issuers.
The group urged the SEC to refine the definition of crypto outlined in Staff Accounting Bulletin 121 (SAB 121) to exclude traditional financial assets recorded or transferred on blockchain networks.
“SAB 121 makes no distinction between asset types and use cases, but instead generally states that crypto-assets pose certain technological, legal, and regulatory risks requiring on-balance sheet treatment,” they added.
Additionally, they proposed exempting banks from the on-balance sheet requirements while upholding disclosure obligations. This approach would enable banks to partake in select crypto activities while maintaining transparency for investors.
Europe-based asset management firm CoinShares has exercised its option to acquire Valkyrie’s crypto-focused exchange-traded funds (ETF) investment advisory business, expanding its business into the U.S.
In a Jan. 12 statement, CoinShares explained that the deal follows the recent approval of Valkyrie’s spot Bitcoin ETF, the Valkyrie Bitcoin Fund (BRRR), by the U.S. Securities and Exchange Commission (SEC).
According to the asset manager, this move would allow it to expand its digital asset offerings to the U.S. market and align with its vision of becoming a global leader in the digital asset space through strategic acquisitions. CoinShares secured the exclusive option to purchase Valkyrie Funds last November.
As such, CoinShares will integrate Valkyrie’s ETF portfolio, comprising the Valkyrie Bitcoin Fund (BRRR), the Valkyrie Bitcoin and Ether Strategy ETF (Nasdaq: BTF), and the Valkyrie Bitcoin Miners ETF (Nasdaq: WGMI, into its existing assets under management (AUM). The firm stated that these 3 ETFs will add approximately $110 million to CoinShares’ AUM, which currently stands at $4.5 billion.
However, the acquisition still requires legal agreements and board approval. Upon completion, Valkyrie Funds will retain its operational independence.
Jean-Marie Mognetti, CEO of CoinShares, expressed commitment to extending the firm’s European success into the U.S. market. He further emphasized the significance of these acquisitions in supporting the company’s global leadership ambition.
“Our expertise has enabled us to dominate the European market, commanding over 40% of all assets under management in crypto ETPs. Exercising our option to acquire Valkyrie Funds aims at extending our European success in the U.S, offering unparalleled access to regulated digital asset products to American investors,” Mognetti said.
Leah Wald, CEO of Valkyrie Funds, acknowledged CoinShares’ standing as a premier player in the industry and expressed excitement about leveraging the European firm’s capabilities and expertise to advance digital asset investment in the American market.
The Shiba Inu (SHIB) price currently treads on crucial technical terrains. As highlighted in previous comprehensive analysis, the potential impacts of two distinct chart patterns were observed on the 1-week timeframe for SHIB, both leading to vastly different price trajectories.
The 1-week chart reveals a compelling quadruple bottom formation for SHIB. If this pattern materializes, it could suggest a bullish surge of up to 250% from its breakout point, as delineated in prior assessments. Conversely, a starkly contrasting pattern emerges in the form of a descending triangle, which has taken shape over a span of 60 weeks. A conclusive break below its defining neckline could induce substantial declines in SHIB’s valuation.
Currently, the bearish sentiment around Shiba Inu seems to be intensifying in the wake of the crypto market downturn. With SHIB recording a price of $0.00000695 at the press time and briefly touching a low of $0.00000674 yesterday, it has breached the descending triangle’s neckline pegged at $0.00000715.
Should SHIB close this week below this key support level, it might portend strong bearish implications, possibly steering the price toward its annual low of $0.000006. Yet, a closure below $0.00000715, while foreboding, is not conclusively bearish.
An analogous dip occurred in June, which was swiftly followed by a robust rally. Over an 8-week period, SHIB ascended by 59%, only to face resistance at the 50-day EMA of $0.00001140, leading to a renewed breach under the descending triangle’s trend line on the weekly chart.
At this juncture, if SHIB can secure a weekly close above the $0.00000715 mark either this week or the next, it might bolster the case for the bullish quadruple bottom setup. So SHIB could see a similar rally to June this year.
From a technical viewpoint, the cryptocurrency will then confront key resistance barriers: the 20-day EMA at $0.00000806, the descending triangle’s trendline approximately at $0.000009, and the 50-day EMA at $0.00001019. Subsequently, a monumental target, pinpointed at the 23.6% Fibonacci retracement level of $0.00002545, representing a rally in excess of 250%, could be attainable.
When interpreting these patterns, investors must decide whether the quadruple bottom or the descending triangle holds more weight for them, making it a buy or sell position.
In a recent post on X (previously known as Twitter), prominent SHIB influencer, Lucie, urged the Shiba Inu community to persevere: “In these turbulent times, it’s imperative for us to remain resilient. The crypto landscape is indeed tumultuous, inundated with unsettling global updates. However, as the formidable ShibArmy, our collective endeavours will undoubtedly yield dividends. Let’s remain united, weathering challenges and championing our shared vision.”
Investors and traders are encouraged to exercise caution and conduct due diligence, keeping a close watch on the unfolding SHIB price narrative.
Featured image from Shutterstock, chart from TradingView.com