BlackRock revises spot Bitcoin ETF to enable easier access for banks

BTC exchange-traded fund (ETF) application to make it easier for Wall Street banks to participate by creating new shares in the fund with cash, rather than just crypto.

The new in-kind redemption “prepay” model, will allow banking giants such as JPMorgan or Goldman Sachs to act as authorized participants for the fund — allowing them to circumvent restrictions that prevent them from holding Bitcoin or crypto directly on their balance sheets.

The new model was presented by six members of BlackRock and three from NASDAQ in a Nov. 28 meeting with the United States Securities Exchange Commission.

If approved, the move could be a game-changer for Wall Street banks with trillion-dollar balance sheets looking to get involved, as many highly regulated banks aren’t able to hold Bitcoin themselves.

Under the revised model, APs would transfer cash to a broker-dealer, which then converts the cash into Bitcoin before it is stored by the ETF’s custody provider, which is Coinbase Custody in BlackRock’s case.

The new structure also works by shifting risk away from APs and placing it more in the hands of market makers.

BlackRock said the new model also offers "superior resistance to market manipulation” — which has been one of the primary reasons that the SEC has repeatedly denied all prior spot Bitcoin ETF applications.

Additionally, BlackRock claimed the new ETF structure would strengthen investor protections, lower transaction costs, and increase “simplicity and harmonization” across the wider Bitcoin ETF ecosystem.

BlackRock meets with SEC for the third time

More recently, BlackRock has met with the Gary Gensler-led SEC for the third time on Dec. 11, according to a recent SEC filing.

BlackRock and NASDAQ’s second meeting with the SEC on Nov. 28 meeting was a follow-up from its first meeting with the securities regulator on Nov. 20, where it presented its original in-kind redemption model.

The SEC must make a decision on BlackRock’s application by Jan. 15, with the final deadline scheduled for March 15.

Meanwhile, ETF analysts predict the SEC will issue a decision on several pending spot Bitcoin ETF applicants sometime between Jan. 5-10.

Grayscale, Bitwise, VanEck, WisdomTree, Invesco Galaxy, Fidelity, and Hashdex are among the other financial firms that await a decision by the SEC between those dates.

#news #etf #sec #blackrock

US Fed 2024 rate cut could prove perfect catalyst for BTC halving

Goldman Sachs, the second-largest investment bank in the world, has predicted that the United States Federal Reserve could cut interest rates twice in the next two years, starting as early as the third quarter of 2024.

Interest rates have a strong correlation to investors’ risk appetite. Goldman Sachs predicted the first Fed rate cut by December 2024, but this forecast has been brought forward to Q3 of 2024 due to cooling inflation, Reuters reported on Dec. 11.

The lender expects the two Fed cuts to bring interest rates to 4.875% by the end of 2024, rather than its previous forecast of 5.13%.

The change comes as data released on Dec. 8 showed stronger-than-expected U.S. labor market results after the U.S. Labor Department’s monthly jobs report said the unemployment rate fell to 3.7% from 3.9% in October.

A report by Reuters cited traders saying that a more robust labor market performance won’t deter the Fed from cutting interest rates. They expect the first cut to come by Q1 of 2024, two quarters earlier than Goldman Sachs’ forecast.
An excerpt from Goldman Sachs’ note on Fed interest cut rates reads:

“Healthy growth and labor market data suggest that insurance cuts are not imminent... But the better inflation news does suggest that normalization cuts could come a bit earlier.”

The federal funds rate is determined by the Federal Open Market Committee and serves as a guide for lending by U.S. banks. It is configured as a range limited by an upper and lower level. Currently, the federal funds rate ranges from 5.25% to 5.50%.

When Fed interest rates drop, borrowing becomes cheaper, fostering an increased appetite for risk-taking among economic and financial markets traders, including cryptocurrencies. An increase in interest rates is often used to contain inflation and reduce the purchasing power of fiat currencies, deterring capital flow into the crypto market.

Federal Reserve interest rate hikes directly impact the crypto market because they can influence investor behavior. When the Fed raises interest rates, traditional investment asset classes, such as bonds and other fixed-income assets, become more attractive to investors due to stable returns. In turn, investors move funds away from volatile assets such as crypto, leading to decreased demand and potentially causing price corrections or declines.

The market becomes more risk-tolerant once interest rates are brought down, and money starts flowing again into the equity and crypto markets from the less volatile asset classes.

The Fed began tightening interest rates in March 2022 amid growing inflation, hiking them from as low as 0%–0.25%, with the most recent increase in July. However, with expected rate cuts in 2024 and the Bitcoin halving event set for April, both could be catalysts for a post-halving price rally.

#news #btc #us

Google updates policy to allow ads for US crypto trusts

Tech giant Google has updated its cryptocurrency-related advertising policy to allow ads about crypto trusts from the end of January, the same month that spot Bitcoin exchange-traded-funds (ETFs) are predicted to be approved in the United States.

In a Dec. 6 policy change log, Google said its crypto and related products ad policy will be updated on Jan. 29, 2024, to allow ads from “advertisers offering Cryptocurrency Coin Trust targeting the United States.”

Cryptocurrency coin trusts were given as examples of “financial products that allow investors to trade shares in trusts holding large pools of digital currency” — likely including ETFs.

“As a reminder, we expect all advertisers to comply with the local laws for any area that their ads target. This policy will apply globally to all accounts that advertise these products,” Google added.

Potential crypto trust advertisers must be Google-certified to run ads. Certification includes the advertiser having the appropriate license from the relevant local authority, and “their products, landing pages, and ads must meet all local legal requirements of the country or region they want to get certified for.”
Google already allows advertising for some crypto and related products but excludes ads of crypto or nonfungible token (NFT)-based gambling platforms, initial coin offerings, decentralized finance protocols, and services offering trading signals.
The policy change comes as Bloomberg’s ETF analysts have pinned 90% odds of a U.S. spot Bitcoin ETF approval by Jan. 10, 2024, with the potential for multiple pending applications to be approved at once.

There are 13 Bitcoin ETF applicants, and public details about their approval processes are scarce. Many fund managers — including BlackRock, Grayscale and Fidelity — have recently reportedly met with the U.S. Securities and Exchange Commission to discuss “key technical details” about their ETF bids.

The crypto space is betting on approvals. Bitcoin is up nearly 74% in the past 90 days, and some analysts expect a new all-time high in 2024.

#news #google #crypto #ETF

El Salvador unveils BTC ‘Freedom Visa’ — but it’s 10x the cost of others

El Salvador has launched a new citizenship-by-investment program that grants a residency visa and pathway to citizenship for 1,000 people willing to stump up a $1 million Bitcoin
BTC or Tether USDT investment in the country.

The Central American country’s price tag for citizenship, however, appears far more expensive than those in neighboring Caribbean countries, which start at $100,000.

El Salvador’s government and stablecoin issuer Tether announced the program on Dec. 7, dubbed the “Adopting El Salvador Freedom Visa Program.”

It offers 1,000 citizenships to wealthy investors who pledge a “$1 million in Bitcoin or USDT investment,” starting with a $999 nonrefundable deposit credited toward the total.
It would raise $1 billion for El Salvador if all spots are filled and is a significant income source for countries with similar programs, such as Vanuatu, which earns millions annually from its citizenship-by-investment program.

Alistair Milne, the founder of crypto hedge fund Altana Digital Currency, posted to X (formerly Twitter) that El Salvador’s offering is “uncompetitive in the global market” and highlighted that citizenship in a European Union country could be purchased for less.
Malta offers a 750,000 euro ($810,000) citizenship by investment, which gives access to the EU’s visa-free Schengen Area comprising 23 countries, according to data from investment migration consultancy Henley & Partners.

The firm also highlights El Salvador’s neighboring Caribbean nations of Antigua and Barbuda, Dominica, and St. Lucia, which offer citizenships in exchange for a $100,000 contribution to sovereign development funds.

Grenada and St. Kitts and Nevis have similar programs, with contributions starting at $150,000 and $250,000, respectively.
However, crypto investors could be swayed to move to El Salvador due to the pro-Bitcoin policies enacted by President Nayib Bukele, which included recognizing Bitcoin as legal tender and scrapping income and capital gains taxes for tech companies investing in El Salvador for the next 15 years.

Bukele has also attempted to stem El Salvador’s murder rate, which was one of the highest in the world when he took office in June 2019. His crackdown starting in March 2022, while successful, has seen 66,000 mostly arbitrary detentions and “grave human rights violations,” according to an April Amnesty International report.

Bukele stepped down as president on Dec. 1 to focus on his reelection campaign ahead of the country’s general election in February 2024.

#news #btc #law

Judge accepts Binance CEO CZ’s guilty plea, with sentencing in Feb

A federal judge has accepted Binance founder Changpeng “CZ” Zhao’s guilty plea to money laundering but hasn’t decided whether he can leave the United States before his February sentencing date.

In a Dec. 6 filing to a Seattle District Court, Judge Richard Jones said he accepted Zhao’s guilty plea to one count of Bank Secrecy Act violations, which the Binance founder submitted over two weeks ago on Nov. 21 alongside his exchange’s $4.3 billion settlement with United States agencies.

Part of the settlement deal saw Zhao step down as CEO of Binance and pay $150 million to regulators.

“This Court, having considered the Report and Recommendation of the United States Magistrate Judge, to which there has no timely objection [...] accepts the plea of guilty of the defendant,” Judge Jones wrote. “The defendant is adjudged guilty of such offense.”

Zhao is set to be sentenced on Feb. 23, 2024 and faces up to 18 months in prison. He’s currently released on a $175 million bond, which would have allowed him to return to the United Arab Emirates, where he resides.

However, federal prosecutors have objected to allowing Zhao to leave the U.S., saying they “would not be able to secure his return” if he decided not to return, as the UAE has no extradition treaty and Zhao could live there indefinitely on his wealth.
“He has three young children and a partner in the UAE; once in the UAE and faced with the prospect of traveling back to the United States to face up to 18 months in prison, he may elect to instead simply stay in the UAE with his family,” prosecutors said.

Zhao has opposed the travel block, saying he "poses no risk of flight,” arguing he took responsibility for his actions by flying from the UAE to the United States.

On Nov. 27, Judge Jones ordered that Zhao not be permitted to travel to the UAE until a court ruled on a motion for review from the U.S. government.

#news #binance #us #CZ

Coinbase rolls out crypto transfers via links sent on WhatsApp, Telegram

A new feature from Coinbase Wallet allows for the transfer of crypto through a link that can be sent through some of the most popular social media sites and messaging apps as the crypto exchange looks to make its service accessible to a wider market.

“Users can now send money on any platform that they can share a link,” Coinbase said in a Dec. 5 blog post, naming apps like iMessage, Telegram, WhatsApp, Facebook, Instagram and TikTok.

There’s no payment fee when sending USD Coin, a U.S. dollar stablecoin Coinbase co-launched in 2018 with its issuer, Circle.

Coinbase said the new feature aims to solve complexities with international bank wire transfers, which it claims often come with hefty fees and paperwork and can take up to five business days for the funds to arrive.

#news #coinbase #wallet