Friday, 10 November 2023

Market Summary

Market Summary 10 November 2023

Bitcoin Price: US$37,301.63 (+1.64%)
Ethereum Price: US$ 2,121.32 (+0.15%)  

A total of 48 countries, including the U.K., Singapore, and Luxembourg, have committed to a tax transparency standard set to begin in 2027, focusing on combating tax evasion in cryptocurrency exchanges. The agreement incorporates the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework (CARF) into the Common Reporting Standard (CRS), facilitating the automatic exchange of information between tax authorities. The CARF was finalised in June after two years of negotiation, marking a significant global commitment to address offshore crypto tax evasion. The 2027 deadline aims to implement these changes, urging crypto platforms to share taxpayer information with tax authorities. Notably, some major crypto-invested nations like Turkey, India, China, Russia, and all African countries have not signed the agreement. Meanwhile, crypto lender Celsius has received court approval for its bankruptcy reorganisation plan, with implementation expected by early 2024. Celsius had settled a $4.7 billion fraud case with U.S. authorities, resulting in the arrest of former CEO Alex Mashinsky, who has denied allegations. The court order entrusts the reorganisation’s implementation to Fahrenheit Holdings, comprising Arrington Capital and U.S. Bitcoin Corp, with the creation of a new company focused on mining and staking. Celsius plans to return about $2 billion in cryptocurrency to account holders. In another development, cryptocurrency exchange Poloniex experienced a significant hack, with approximately $114 million stolen from its hot wallets. The breach was confirmed by Poloniex investor Justin Sun, with multiple blockchains targeted, including Ethereum and Tron. This incident underscores the ongoing vulnerability of crypto exchanges to hacking attempts. Poloniex has initiated investigations and promised full reimbursement to affected users, offering a 5% white hat bounty to the hacker. The hack’s impact on Poloniex’s financial position is being assessed, but Justin Sun asserts that the losses are within manageable limits, with operating revenue sufficient to cover them.

JPMorgan has introduced programmable payments to its blockchain-based settlement token, JPM Coin, allowing users to automate transactions based on preset conditions, such as covering overdue payments or margin calls. The feature enables dynamic responses to events and market volatility, providing greater flexibility than the previous method of scheduling payments at specific times. Meanwhile, MicroStrategy, led by Executive Chairman Michael Saylor, has seen its massive Bitcoin investment cross $1.1 billion in unrealised profits, representing a 25% gain over its cumulative investment. With over 158,000 bitcoins valued at $5.7 billion, MicroStrategy’s Bitcoin holdings now account for over 80% of its $7.1 billion stock market capitalisation. In Hong Kong, UBS has allowed its wealthy clients to trade three authorised crypto exchange-traded funds (ETFs), including Samsung Bitcoin Futures Active, CSOP Bitcoin Futures, and CSOP Ether Futures ETFs. The move follows HSBC’s announcement of plans to launch a digital assets custody service for institutional clients. Hong Kong’s recent regulatory developments, allowing retail investors to buy spot crypto ETFs and engage in primary tokenisation dealing, align with its ambitions to become a virtual asset hub. 

The Ethereum network experienced a surge in transaction fees, with median gas prices spiking to 270 gwei, touching a level last seen in June 2022 and resulting in trading costs ranging from $60 to $100 for a few hours. The increased fees were triggered by heightened demand for block space following the revelation that BlackRock, the financial giant, filed for an exchange-traded fund (ETF) holding Ethereum’s ether (ETH). This news likely buoyed investor sentiment, leading to a 10% price surge for ETH, crossing the $2,000 mark. Concurrently, BlackRock confirmed its Ethereum ETF plan in a Nasdaq filing, showcasing the world’s largest asset manager’s growing commitment to cryptocurrencies. The Ethereum network’s increased fees highlight the ongoing challenges with scalability and transaction costs in times of heightened demand. Additionally, the Chicago Mercantile Exchange (CME) overtook Binance in Bitcoin futures open interest, indicating a shift in dominance among traditional and crypto derivatives markets, potentially impacting the U.S. Securities and Exchange Commission’s consideration of Bitcoin ETF applications. Amid these developments, Galaxy Digital founder Mike Novogratz predicts that 2024 will witness institutional adoption of cryptocurrencies, primarily driven by the anticipated approval of Bitcoin spot exchange-traded funds (ETFs). Novogratz emphasised the transformative impact of ETFs in bringing institutional confidence and significant capital to the crypto space, noting that the ETFs’ approval is a matter of “when” rather than “if.” He also highlighted the potential for Ethereum ETFs and discussed the importance of ensuring the continued dominance of dollar-backed stablecoins in the cryptocurrency ecosystem.


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