Read in the Digest
- Gensler Says SEC Won’t Ban Cryptocurrencies, A16z Proposes Decentralization-Friendly Framework
- Demand Drives U.S. Bank to Offer Bitcoin Custody Service
- Bitcoin Surpasses $50K, Year-to-Date Gains Put BTC Over SPX, Dow Jones
- WhatsApp Outage Hits Crypto Trading
Gensler Says SEC Won’t Ban Cryptocurrencies, A16z Proposes Decentralization-Friendly Framework
Amidst regulatory pressure, the Securities and Exchange Commission (SEC) chairman, Gary Gensler, has clarified that the United States will not follow China’s footsteps in banning cryptocurrencies.
However, Gensler stated that the U.S. will take on a different regulatory approach. In addition, Gensler noted that he believes that many cryptos pass the “test of being investment contracts or a note or some other form of a security.”
Continuing the trend of regulation, venture capital firm Andreessen Horowitz (a16z) has proposed a decentralization-friendly approach to government oversight.
The major issues outlined by a16z include; “consumer protections, decentralized autonomous organizations (DAOs), assessing regulatory fragmentation and overlap, tax reporting, and clarity regarding certain blockchain ecosystems.”
Flipsider:
- SEC Chair Gensler has stated that while the SEC will not ban crypto, Congress has the final say about the issue
Why You Should Care
The more accommodative stance towards the crypto industry in the United States could facilitate its greater adoption and development in the region.
Demand Drives U.S. Bank to Offer Bitcoin Custody Service
On Tuesday, October 5, the fifth-largest retail bank in the United States, U.S. Bank, announced the launch of a crypto custody service. The 158-year-old bank currently handles more than $8.6 trillion in assets under custody and administration.
Thanks to a partnership with the New York Digital Investment Group (NYDIG), U.S. Bank will provide crypto services for Bitcoin, Litecoin, and Bitcoin Cash. In addition, the bank will roll out support for Ethereum and other altcoins in the near future.
According to U.S. Bank, the institutional demand for crypto is higher than ever. This is because most institutional clients are beginning to realize the potential use cases for digital assets in their businesses.
In an interview, the vice chairman of U.S. Banks’s wealth management and investment services division, Gunjan Kedia, stated,
"Our clients are getting very serious about the potential of cryptocurrency as a diversified asset class. I don't believe there's a single asset manager that isn't thinking about it right now."
Flipsider:
- Crypto service providers have been faced with stricter regulations, with just four exchanges remaining in the country
Why You Should Care
The increasing demand for cryptocurrency amongst institutional investors could drive greater adoption of the assets amongst various sectors.
Bitcoin Surpasses $50K, Outperforms SPX and Dow Jones
Peaking at nearly $65k in April, pressure from China’s ban, Evergrande, and environmental concerns forced BTC to trade around $40 for most of Q3. However, rising from the downtrends, Bitcoin has once again surpassed $50k.
On October 5, Bitcoin, the world’s largest crypto, gained over 5% to reach an intraday high of $51,839. The price of Bitcoin briefly consolidated, and was trading at $50,753.29 at the time of this writing.
The five-day price chart of Bitcoin (BTC). Source: Tradingview
Bitcoin’s strong market performance in 2021 has ensured the asset outperformed major traditional stocks, and the S&P and Dow Jones.
Since the beginning of September, the stick value of the S&P 500 has dropped by 5.22%, while Dow Jones dropped by 3.84%. On the other hand, although Bitcoin has suffered significant drops, it has gained over 6% in the same period.
Flipsider:
- While Bitcoin continues to outperform traditional stocks, the CEO of JP Morgan, Jamie Dimon, says that Bitcoin has no intrinsic value
Why You Should Care
Bitcoin continues to bounce back regardless of the negative stance of countries and individuals, showing it is an asset that could drive the future of finance.
WhatsApp Outage Hits OCT Crypto Trading
On Monday, October 4, the world witnessed its largest-ever social media outage, with WhatsApp, Facebook (NASDAQ:FB), Instagram, and Messenger forcing approximately 3 billion users offline. An outage of this scale is bound to affect every industry, including crypto.
For almost six hours, many crypto traders were left stranded, including users of London-based OTC (over the counter) trading firm, BCB Group. The blackout hit at the busiest trading hours, sending daily trading volume down by 15%.
OTC trading is usually done on social media with WhatsApp, Facebook, and Telegram being the most common. Telegram became the next best option, with many OTC traders in the Middle East moving to the platform.
However, with traders looking for alternative platforms, Telegram said it received 70 million new users, even as the secured social media platform continued to work flawlessly. The largest-ever social media blackout also cost the founder and CEO of Facebook, Mark Zuckerberg, $7 billion in losses.
Flipsider:
- The crypto market continues its recovery despite the blackout that affected trading with the global market cap now at $2.163 trillion
Why You Should Care
Because crypto trading, especially OTC and peer-to-peer trading, is done on other platforms, ensure that you use secure, trusted platforms to avoid loss of funds.
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