Appold Market Watch - Week ending 20 September 2024

Market Update & Industry News - Week ending 20 September 2024

🔷 The auditor for the collapsed crypto exchange, FTX, settled with the U.S. Securities and Exchange Commission (SEC), paying a fine for alleged misconduct. The audit firm, Prager Metis CPAs, was accused of failing to spot key issues in FTX's financials reviewing of the exchange's accounts. The settlement included both a penalty and an agreement not to provide similar audit services without reform.

Appold view: Many auditors have avoided servicing this market. But this is a warning to those who do, particularly those who don’t use blockchain audit experts to assist them. 

🔷 The U.S. Securities and Exchange Commission (SEC) approved options trading for BlackRock’s iShares Bitcoin Trust ETF (IBIT). This allows investors to trade options tied to BlackRock's spot Bitcoin ETF on the Nasdaq exchange. Following further approval, the options will give institutional investors and traders a new tool for hedging and managing their Bitcoin exposure.

Appold view: Interestingly, a very conservative proposed limit of 25,000 contracts, regardless of the trading volume and shares outstanding, was set to prevent market manipulation. Options are physically settled contracts with enhanced market surveillance. 

🔷 Hedera, Ripple, and Aptos Foundation, as founding members, launched the MiCA (Markets in Crypto-Assets) Crypto Alliance in the EU to help firms comply with upcoming regulations. MiCA was established to provide clarity and legal certainty across the EU’s digital asset sector.

Appold view: Full implementation, including crypto-asset service providers (CASPs), is expected by the end of 2024. From our observations, it is clear that many market participants will be challenged to meet deadlines adequately. 

🔷 Goldman Sachs-backed BitGo announced a new US Dollar-backed stablecoin, USDS. Holders can earn rewards by staking their tokens, incentivising broader adoption of the stablecoin by giving 98% of earnings to network supporters.

Appold view: This is an interesting proposal with some key differences to current mainstream offerings, including greater contributions to the network and being fully backed with short-term duration US Treasury Bills, cash, and overnight repos. However, the devil is in the details, and we will conduct a deeper analysis.

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