Appold Market Watch - Week 27 to 31 May 2024

Market Update & Industry News - Week ending 31 May 2024

🔷 Global payments institution, Mastercard, launched its first peer-to-peer network for sending digital assets across borders in Europe and Latin America. The Mastercard Crypto Credential Network will allow users to transfer crypto with simple aliases initially only on Bit2Me, Lirium and Mercado exchanges. The use of aliases is alleged to simplify transaction processes whilst being compliant with regulatory requirements.

Appold view: This is a significant step for the industry, having a major corporate brand improving trust and compliance in transactions through verified wallet addresses. Expect to see more corporates adopt this style of transacting over time, as well as banks attempt to figure out how they cannot lose revenue from this growing sector. 

🔷 Multinational asset manager BlackRock’s iShares Bitcoin Trust (IBIT) surpassed Grayscale Bitcoin Trust (Btc)’s GBTC as the world’s largest Bitcoin ETF. Grayscale held the top spot since the launch of spot Bitcoin ETFs in January. On Friday IBIT had inflows of $169m whilst Grayscale registered $124m outflows, continuing the trend.

Appold view: For those observing daily net inflows and outflows, this was inevitable. Greyscale has not helped itself by charging high fees compared to the competition. They need to bring their costs down as investors won’t see a value proposition from such high fees eroding their returns. 

🔷 Payments giant, PayPal, launched its stablecoin PYUSD onto the Solana blockchain alleging faster and cheaper transactions. PYUSD was launched last August onto the Ethereum blockchain being one of the first large financial institutions to launch its own stablecoin, joining the over $160b market.

Appold view: Now launched, 420 million PayPal accounts can use Solana’s network, as well as Ethereum, heightening the rivalry between the two to take market share in the payments space.

🔷 Bitcoin and Ethereum exchange-traded products (ETPs) went live on the London Stock Exchange for the first time after the UK’s Financial Conduct Authority authorised them last week. 21Shares and WisdomTree were the first to list physically-backed Bitcoin and Ethereum ETPs on the stock exchange. Due to FCA restrictions retail investors are unable to buy or trade the ETPs.

Appold view: As discussed last week, the FCA has been too slow in allowing this and falls short of allowing retail access, forcing retail onto less regulated crypto exchanges for market exposure.

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