Appold Market Watch - Week ending 20 December 2024
Market Update & Industry News - Week ending 20 December 2024
Market update and Industry News - Week Ending 20 December 2024
🔷 The Chair of the US Federal Reserve stated that the US central bank cannot hold Bitcoin due to legal constraints and has no plans to seek changes to this policy. This comes amid discussions about President-elect Donald Trump’s proposal to establish a US Bitcoin Strategic Reserve. Powell emphasised that any legal amendments to permit such holdings would require Congressional action.
Appold view: This highlights the existing legal constraints and complexities of integrating digital assets into a sovereign strategy. Trump charmed the crypto industry with his alleged ambitions, but now that he has the Presidency in his pocket, what Trump says and does can sometimes be inconsistent. Whichever way this goes, it will have a significant impact on the industry, for better or for worse.
🔷 The European Securities and Markets Authority (ESMA) published its final guidance to support EU member states implementing the Markets in Crypto-Assets (MiCA) regulation by December 2024. Six EU member states reported difficulties in meeting the end-of-year deadline due to an alleged lack of regulatory clarity.
Appold view: Portugal, Luxembourg, Italy, Belgium, Poland and Romania are citing legislative delays and short implementation timelines as their primary challenge for alignment. However, it is unlikely to be universally delayed as the EU strives to meet established regulatory deadlines and maintain market stability. It is unclear what the impact will be on non-compliant nations in the New Year.
🔷 The UK's Financial Conduct Authority (FCA) released a discussion paper seeking feedback on proposals to enhance transparency in the UK’s digital asset markets. The paper suggests implementing admission and disclosure standards, along with market abuse regimes, to improve market integrity and protect consumers.
Appold view: Such proposals are welcome as they demonstrate that action is being taken to enhance much-needed transparency. This was published during the week, and we have not reviewed it in detail yet, but we will report our thoughts on the paper in due course.
🔷 UK-based digital asset custodian, Copper.co withdrew its application to register with the UK’s Financial Conduct Authority (FCA). The company cited a strategic shift towards growth in priority markets, including Europe, the United States, and the Middle East, under their new global CEO.
Appold view: This is an unusual circumstance in which a company with sizeable headquarters in central London and a former Chancellor of the Exchequer as its Chairman has apparently turned its back on getting UK regulation in this growing region rather than simply adding it to an armoury of global regulation. Whether Copper withdrew for strategic reasons or concerns of not meeting the FCA’s approval criteria is currently unclear.
