Podcast Summary
This episode delves into the recent developments in the cryptocurrency and blockchain space, with a focus on the amended Bitcoin ETF filing by ARC and 21 shares, the use of JP Morgan’s Onyx blockchain infrastructure for live settlement of a collateral transaction, and the decline in Coinbase’s spot trading volumes. The podcast also touches on political issues surrounding the selection of a new speaker of the house and the SEC’s handling of ESG and climate-related issues.
Key Takeaways
Amended Bitcoin ETF Filing
- Addressing SEC Concerns: ARC and 21 shares have revised their spot Bitcoin ETF filing to address the SEC’s concerns about asset segregation, illicit transactions, and environmental issues. This move is seen as a positive sign that the SEC is providing constructive feedback and moving towards approval.
- Market Optimism: The GBTC discount narrowed to 16.5% following the news, indicating market optimism about the likelihood of a Bitcoin ETF approval.
Blockchain Infrastructure in Action
- First Live Settlement: JP Morgan’s Onyx blockchain infrastructure was used for the first live settlement of a collateral transaction between BlackRock and Barclays. This process was almost instantaneous, providing a significant speed boost compared to traditional settlement times.
- Tokenization of Assets: BlackRock tokenized shares in one of its money market funds and transferred them over the Onyx blockchain to Barclays for use as collateral in an over-the-counter derivatives trade. This could reduce operational friction in meeting margin calls during market volatility.
Political Uncertainty and Regulatory Issues
- Speaker of the House Selection: There is confusion surrounding the selection of a new speaker of the house after the ousting of Kevin McCarthy. This uncertainty is affecting the passage of crypto legislation and other pressing issues.
- SEC Criticism: SEC Chair Gary Gensler is facing criticism for not providing requested documents related to coordination with EU regulators on ESG and climate-related issues.
Crypto Market Dynamics
- Coinbase’s Declining Volumes: Coinbase’s spot trading volumes have declined in the third quarter, reaching the lowest level since Q4 of 2020. Despite this, Coinbase has gained market share due to the loss of confidence in Binance.
- Bitcoin’s Price Stability: Bitcoin’s price has stabilized after a 4% collapse and failing to break above the 28,000 level. However, sentiment metrics, such as the basis rate, have fallen to their lowest level in four months.
Sentiment Analysis
- Bullish: The market’s reaction to the amended Bitcoin ETF filing by ARC and 21 shares, as evidenced by the narrowing GBTC discount, indicates a bullish sentiment. The successful use of JP Morgan’s Onyx blockchain infrastructure for a live collateral transaction also suggests optimism about the potential of blockchain technology in traditional finance.
- Bearish: The decline in Coinbase’s spot trading volumes and Bitcoin’s price stability after a 4% collapse suggest a bearish sentiment. The uncertainty surrounding the selection of a new speaker of the house and the criticism faced by the SEC also contribute to a negative outlook.
- Neutral: The podcast presents a balanced view of the current state of the crypto market, acknowledging both the positive developments and the challenges. This neutral sentiment is reflected in the discussion on the potential of blockchain technology and the regulatory hurdles it faces.
