Appold Market Watch - Week 29 April to 3 May 2024
Market Update & Industry News - Week ending 3 May 2024
🔷 Record outflows from US spot Bitcoin ETFs were recorded on Wednesday, with over $560m exiting the funds. BlackRock's IBIT saw outflows for the first time with $36.9m liquidated, with Grayscale Bitcoin Trust (Btc)’s GBTC and Fidelity Investments’s FBTC ETFs seeing $167.4m and $191.1m of losses, respectively.
Appold view: The devil is in the detail. Indeed, Wednesday had a record outflow day of over $560m as some asset managers rebalanced their portfolios at month's end. However, Friday saw net inflows of around $378m. Year to date, the price action and net inflows remain extremely positive.
🔷 China Asset Management (Hong Kong), Bosera Asset Management Co. and Harvest Global Investments Limited launched six spot Bitcoin and Ethereum ETFs on The Stock Exchange of Hong Kong Limited Exchange for the first time in the Asian continent. The six ETFs had a combined trading volume of just £11m, falling short of an expected $100m on day one. However, the six ETFs are only open for trading in Hong Kong and exclude mainland China.
Appold view: An unfortunate day to launch at month end on the day that saw the greatest outflows in the US ETFs. Nonetheless, this is a long-term strategy and despite being a region where many market participants prefer to hold the underlying assets themselves, this is a big step in the right direction for traditional institutional access and participation.
🔷 United Kingdom’s HM Treasury released its annual anti-money laundering (AML) and counter-terrorist financing (CTF) supervision report highlighting cryptocurrency as a priority risk factor of concern for money laundering. On behalf of the HM Treasury the Financial Conduct Authority was said to have allocated nearly 30% of its financial crime specialists to overseeing crypto asset businesses in 2023.
Appold view: These measures are integral to the UK’s strategy in an attempt to become a leading centre for blockchain technology, whilst protecting the market from money laundering activities where criminals, terrorists and rogue nations constantly attempt to exploit the system.
🔷 The founder and former CEO of the world’s largest crypto exchange, Binance, was sentenced to four months in prison following a guilty plea in November last year to charges of violating US money-laundering laws. Changpeng Zhao was ordered to pay a $50m fine and Binance to pay $4.3b in fines and forfeiture.
Appold view: Zhao’s sentencing to four months in prison is significantly less than the three years proposed by the U.S. Justice Department. His case marks a precedent as it’s the first time someone has been imprisoned for these specific breaches of the Bank Secrecy Act, which mandates that financial institutions establish robust systems to monitor and report suspicious activities
#Marketwatch #Blockchain #Investments
