Bitcoin rebounds as hidden currents surge in the market

Bitcoin bounces back as market sees unexpected shifts.

Author: Qin Jin, Carbon Chain Value

If the stock market is a barometer of a country’s economy, then Bitcoin is a barometer of the global encrypted market. Its every move may be hinting at the future direction and trend of the global encrypted market.

Bitcoin saw a small rebound today, which was a critical moment for events such as US regulation, Binance being suppressed by the SEC, and Wall Street traditional financial giants rushing to enter the market. Therefore, compared with previous rebounds, the information conveyed by this rebound is very thought-provoking.

On June 16th, iShares, a department of the US fund management giant BlackRock, submitted an application for a spot Bitcoin ETF to the US SEC. According to the file, the fund’s assets will be named iShares Bitcoin Trust, and the fund’s assets will mainly consist of Bitcoins held by the trustee on behalf of the trust.

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Anthony Pompliano, co-founder of Morgan Creek Digital, subsequently stated that BlackRock’s application is not for a Bitcoin ETF, but a Bitcoin trust. These products are only technically different, especially in terms of supervision and approval, but the ultimate result is similar for investors. Pompliano also stated that if the product is approved for issuance, it may force GBTC to introduce daily redemption and reduce fees to compete with it. Many Wall Street firms may launch products that quickly catch up with BlackRock.

On June 20th, the digital asset trading platform EDX announced its official launch and opening of trading. EDX is supported by companies such as GAC, Citadel Securities, Fidelity Investments, Blockingradigm, Sequoia Capital, and Virtu Financial. It aims to achieve secure and compliant digital asset trading through reliable intermediaries.

It is reported that EDX is a non-custodial trading platform for institutional clients, and does not directly handle client assets, but provides clients with a trading market for encrypted assets and US dollars. The products traded on EDX include $BTC, $ETH, $LTC and $BCH.

From EDX, we can roughly summarize a few keywords: American, compliant, financial giants, not targeting retail investors, and not custodializing assets. It can also be said that the financial forces of Wall Street in the United States have launched their own encrypted exchange. In the future, US institutions can trade encrypted assets on their own compliant exchanges. In fact, in the previous cycle of narrative, the exchange FTX endorsed by mainstream US institutions collapsed due to poor management and suppression by competitors, resulting in serious damage to most institutional assets. The reason behind this is that there is no effective and mature compliant regulatory framework to regulate FTX’s control of self-custodied assets. EDX effectively avoids the above two shortcomings: compliance and asset custody.

Jez Mohideen, CEO of Laser Digital, a Web3 venture capital firm under Nomura Securities, believes that the regulatory debate surrounding cryptocurrencies will play a key role in determining the future development trajectory of institutional adoption of cryptocurrencies.

Therefore, in the next round of mainstream crypto narratives, mainstream US financial institutions will play an even more prominent role in this historically significant technology wealth creation movement. Creating their own space, EDX was born. The difference is that in addition to Wall Street’s traditional financial institutions, which have protected the crypto industry, a layer of “compliance” has been added to this round of escorting the crypto industry.

Therefore, returning to the topic of SEC regulatory compliance, we can understand that before the SEC severely punished Binance, Wall Street financial forces may have already prepared sufficiently for the introduction of compliant crypto transactions. The main role of the SEC chairman in this strict crypto regulation may not be the one understood by the outside world as a cryptocurrency scholar with a righteous and impartial face, nor the one described by the outside world as indecisive and weak in the face of crypto-unfriendly regulators.

It is worth noting that in 1979, Gensler joined Goldman Sachs and became one of the youngest partners in the company at the age of 30. From 2009 to 2014, Gensler served as the 11th chairman of the US CFTC.

At the MIT Technology Review Forum in April 2018, Gensler said that blockchain technology is a good thing for the entire financial industry, but cryptocurrencies, exchanges, and related token issuance fundraising activities (ICOs) based on the technology still cannot be relied on and there are no existing laws and regulations to regulate this industry.

On the contrary, Gensler, who is of Jewish origin, is precisely a pioneer of encryption who represents the financial power of Wall Street. In this way, this may not be a coincidence, but a deliberate arrangement. At the same time, the harsh supervision faced by Binance will not only result in heavy penalties, but also fierce competition from Wall Street financial forces.

On the same day, June 20, Deutsche Bank applied for regulatory approval to provide custody services for digital assets such as cryptocurrencies. David Lynne, head of the bank’s commercial banking department, said, “We are building our own digital asset and custody business, and we have just submitted an application for a digital asset license to the German Federal Financial Supervisory Authority (BaFin).”

EDX is non-custodial, while Deutsche Bank provides custodial services. In my own understanding, everything in the world is not a coincidence.

When we look back at the landmark events that have occurred in the cryptocurrency industry over the past year or so, on the surface, it is nothing more than Hong Kong’s new cryptocurrency policies and U.S. cryptocurrency regulation. Hong Kong is actively embracing cryptocurrency companies, while Washington, D.C. is intensively cracking down on cryptocurrency companies. One is in the east, the other in the west, one welcomes, the other expels, but their ultimate outcome may be the same, as both are adding fuel to the development of their cryptocurrency industry. The difference is that when Hong Kong began to embrace cryptocurrency companies, it had already laid out a framework for developing and regulating companies in advance, while the United States, when it began to embrace cryptocurrency companies, did not have clear development standards and regulatory frameworks. It later realized the importance of regulation in the cryptocurrency industry and began to gradually regulate and develop policies. It has launched its own cryptocurrency exchange.

The future development and evolution of the cryptocurrency industry may exceed the expectations of us all.

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