The countdown is underway for the United States Securities and Exchange Commission (SEC) to decide on approving the first spot Bitcoin exchange-traded fund (ETF) in the United States. After several delays, the regulator\u2019s final deadline is approaching, with market participants anticipating a decision in early January 2024.<\/p>\n
In another sign that a green light may be forthcoming, companies awaiting approval have regularly met with SEC officials over the past weeks, discussing their proposals and making adjustments as requested. <\/p>\n
If approved, the biggest cryptocurrency will be traded on the spot market of Wall Street\u2019s major exchanges, opening up Bitcoin (BTC) to a broader audience of investors, this time as a product backed by the most prominent investment firms in the world. If denied, investment managers will likely appeal the ruling, prolonging the waiting period for investors and Bitcoiners in the United States.<\/p>\n
The anticipation has led Bitcoin futures open interest to reach $5.2 billion on the global derivatives giant, the Chicago Mercantile Exchange (CME), on Dec. 6, only $200 million lower than its all-time high of late October 2021 during the bull market. With BTC open interest jumping, markets are gearing up for another turning point in prices and more volatility in 2024.<\/p>\n
In this week\u2019s Crypto Biz, we look at BlackRock\u2019s seed capital for its spot Bitcoin ETF, HashKey expanding its market maker approach, and Societe Generale issuing a bond on Ethereum.<\/p>\n
Hong Kong\u2019s HashKey Exchange will soon allow individual and enterprise market makers to provide liquidity on the exchange. According to an announcement, HashKey will enable individuals and entities to apply to become market makers if they trade at least $5 million of cryptocurrencies per month on the exchange. Depending on monthly rankings or trading volume, users and firms will receive between 0.005% and 0.015% of transaction value as commission. All market makers are exempt from paying commission fees on trades. The exchange has been increasing its service offerings. In November, HashKey launched insurance coverage for users\u2019 and enterprise assets stored within its digital wallets.<\/p>\n
BlackRock received $100,000 in seed funding from an unknown investor for its spot Bitcoin ETF in October 2023, according to its latest U.S. SEC filing. The investor agreed to purchase 4,000 shares for $100,000 on Oct. 27, 2023, at $25.00 per share, with the investor \u201cacting as a statutory underwriter with respect to the Seed Creation Baskets.\u201d According to BlackRock\u2019s latest filing, it plans to borrow Bitcoin or cash as trade credit from a trade credit lender on a short-term basis to pay the sponsor\u2019s fee. BlackRock can \u201ccharge their fees\u201d via a loan instead of having to sell BTC (the ETF asset). That way, they \u201cdon\u2019t impact BTC price that much.\u201d<\/p>\n
The third-largest bank in France, Societe Generale, issued its first digital green bond as a security token on the Ethereum public blockchain. The bond, registered by Forge, a subsidiary of Societe Generale, went public on Nov. 30 with a value of 10 million euros (around $11 million) and a maturity of three years. Its \u201cgreen\u201d status means that its net proceeds will be used to finance or refinance products and companies classified under the eligible green activities category. The digital infrastructure of the bond grants 24\/7 open access to the data on its carbon footprint through the bond\u2019s smart contract. Another innovation of the bond is a technical option for investors to settle securities on-chain through the EUR CoinVertible, a euro-pegged stablecoin issued by Forge in April 2023.<\/p>\n
Companies connected to the crypto and blockchain industry in the U.S. reportedly spent roughly $3 million more on lobbying in the first three quarters of 2023 than over the same period in 2022. According to data from government transparency group Open Secrets, crypto firms spent roughly $19 million on lobbying from January to September 2023, roughly 19% more than they did over the same period in 2022. Coinbase reportedly led the spending on lobbying at more than $2 million, followed by Crypto.com, Blockchain Association and Binance. Before its collapse in November 2022, FTX had been one of the biggest spenders in the crypto space on donations to U.S. lawmakers\u2019 campaigns and marketing efforts.<\/p>\n