Appold Market Watch - Week ending 15 November 2024

Market Update & Industry News - Week ending 15 November 2024

🔷 Bitcoin surged to a new all-time high of $93,000 on Wednesday, with the global digital asset market reaching $3tn following US election results and alleged increased investor expectations of more relaxed regulations from Donald Trump’s new US Government.

Appold view: The optimism on favourable legislation appears to remain, for now. Note that it was also the largest week of BTC spot ETF inflows since its inception and listing in January 2024.

 🔷 The European Banking Authority (EBA) issued guidelines for payment service providers (PSPs) and crypto-asset service providers (CASPs) to ensure compliance with the European Union’s and national restrictive measures regimes. These guidelines clarify how PSPs and CASPs should implement robust screening systems for fund and digital asset transfers to prevent circumvention of EU rules and sanctions.

Appold view: While this promotes greater financial security, it also poses implementation challenges, particularly for smaller firms. However, regulatory development is key to market participant protection within the growing blockchain ecosystem. It also allows professional firms to demonstrate strong governance when adopting these standards.

🔷 Eighteen U.S. states, led by Nebraska and Kentucky, are suing the U.S. Securities and Exchange Commission (SEC) and its Chair, Gary Gensler, for regulatory overreach in the digital assets sector. They argued that the SEC’s actions exceed its authority, stifle innovation, infringe on state sovereignty, and push digital asset firms overseas.

Appold view: There are a number of complex reasons for this and it certainly highlights the tension between fostering innovation and ensuring regulatory clarity across the US. While state-level concerns about overreach are valid, having clear and balanced federal guidelines is essential to prevent the fragmentation of oversight as well as maintain US competitiveness in the global blockchain technology industry.

🔷 London-based Fintech Revolut announced plans to expand its digital assets exchange, Revolut X, across the European Union following a successful launch in the UK. This platform caters to professional traders, offering advanced features such as margin trading and futures contracts.

Appold view: Revolut’s digital assets exchange expansion into the EU highlights a growing demand for digital asset market access solutions. The success of the UK trading platform, of which they have around 10m “banking” clients, is unclear as trading volumes are not publicly reported, but it is assumed successful based on this announcement.

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