Tag: Crypto Adoption

Crypto investment products have recorded a staggering $3.85 billion in weekly inflows, surpassing the prior record set just a few weeks ago as investor confidence surges and institutional interest increases.

According to an official report, the latest development has pushed total inflows year-to-date (YTD) to $41 billion and total assets under management (AuM) to a new high of $165 billion – prior cycle highs in 2021 saw inflows of $10.6 billion and an AuM high of $83 billion.

Bitcoin Leads the Table

Bitcoin recorded inflows of $2.5 billion this week, pushing year-to-date inflows to $36.5 billion. In contrast, short Bitcoin products attracted a modest $6.2 million, significantly below historical levels typically observed following sharp price surges. This suggests that investors exercise caution when considering bearish positions amid the robust market momentum.

Following Bitcoin’s inflow, Ethereum experienced its most significant weekly inflows, totaling $1.2 billion, surpassing the levels seen during ETF launches in July. Meanwhile, Solana saw $14 million in outflows, marking the second straight week of declining investor interest.

Solana (SOL) has been a top performer this year, surging over 199% to a peak of $263 before consolidating near the $230 resistance level with a market cap of $110 billion. However, the asset was trading above $223, representing a 5.16% decrease in the past 24 hours, ranking as the fifth largest crypto asset.

While Solana recorded approximately $14 million in outflows amid the market pullback, blockchain equities also attracted $124 million in inflows, the highest since January, fueled by increasing investor optimism regarding improving profit margins for Bitcoin mining companies.

Meanwhile, several countries reported notable regional inflows, led by the United States, of $3.6 billion. Switzerland followed with $160 million, while Germany, Canada, and Australia recorded $116 million, $14 million, and $10 million, respectively.

Will ETH Price Surge?

With the 2024 crypto bull market continuing, bitcoin (BTC) and other altcoins have experienced significant price surges. However, Ethereum (ETH), the second-largest cryptocurrency by market cap, has shown minimal growth compared to its historical performance in previous cycles.

Despite its minimal and slow growth, investors still acquire the crypto asset, showing their confidence. Recently, the layer-1 blockchain saw a surge in total value locked (TVL) by $7.79 billion in the past week, significantly higher than some top blockchain networks. However, the increase in TVL has failed to affect ETH price movement, which is currently down 3.15% in the last 24 hours, struggling below the $4,000 price mark.

While Solana recorded approximately $14 million in outflows amid the market pullback, blockchain equities also attracted $124 million in inflows, the highest since January, fueled by increasing investor optimism regarding improving profit margins for Bitcoin mining companies.

Meanwhile, several countries reported notable regional inflows, led by the United States, of $3.6 billion. Switzerland followed with $160 million, while Germany, Canada, and Australia recorded $116 million, $14 million, and $10 million, respectively.

The United Kingdom (UK) plans to implement a comprehensive regulatory framework for cryptocurrency by 2026, signaling a major step toward promoting transparency and consumer protection in the sector.

A Bloomberg report noted that a range of discussion documents and consultations will commence as early as this quarter to draft regulations addressing market manipulation, trading platforms, crypto lending, and stablecoins, among other topics.

FCA to Implement Crypto Regulations 

A blog post on the Financial Conduct Authority (FCA) website also revealed that input from more than 100 entities spanning the crypto and traditional finance sectors has been gathered. Participants include digital asset platforms, financial institutions, trading companies, blockchain analytics providers, and major regulatory organizations such as the Treasury, the Bank of England, and the United States Securities and Exchange Commission (SEC).

Following the FCA report, Mark Long, Executive Director, emphasized the critical need to prevent market manipulation, stating that it is essential for the proper functioning of financial markets and enabling investors to make informed decisions. He further noted the significance of addressing market misconduct within the crypto sector and implementing robust regulations to curb such activities.

Data from the FCA also noted that 12% of adults in the UK currently hold crypto assets, which marks a 10% rise from the previous figure. Awareness of digital assets among the population has also grown, increasing from 91% to 93%, indicating a steady expansion in adoption.

Research indicates that more people view crypto as a component of a diversified investment strategy. Around 20% of respondents identified recommendations from friends and family as a key motivation for buying crypto.

Additionally, long-term savings for crypto investments grew from 19% in 2022 to 26% in 2024, while purchases made using credit cards or overdrafts climbed from 6% to 14% during the same timeframe.

SEC Targeting Big Players

Over the years, the SEC has drawn criticism for its rigorous stance on the crypto industry. In 2023, under the leadership of Chairman Gary Gensler, the agency pursued 46 legal actions against crypto companies, targeting prominent players such as Binance, Coinbase, and Bittrex.

As a result of several legal actions, crypto exchange crypto.com joined forces with other companies to actively defend themselves, take a stand against a federal agency overstepping its legal authority, and protect the future of the crypto industry in the U.S.

The firm noted in its lawsuit that the SEC had overstepped its statutory boundaries by unilaterally expanding its jurisdiction. Additionally, it questions the regulator’s unlawful rule that treats nearly all crypto assets as securities, regardless of how they are conducted.

Morocco is taking a significant step towards regulating crypto, with a draft law currently undergoing adoption. This move comes after a ban on digital assets, which has been in place since 2017 despite their continued underground use by the public.

Morocco Drafts Crypto Regulatory Law

According to a Reuters report, Abdellatif Jouahri, the governor of Bank Al Maghrib, Morocco’s central bank, stated that it had prepared the draft law to regulate crypto assets. This marks a shift in the country’s stance on digital assets. The decision to regulate crypto is likely driven by the growing adoption of digital assets in Morocco despite the ban.

Introducing a regulatory framework for crypto in Morocco could have significant implications for the country’s finances. As the central bank governor hinted, it may increase financial inclusion and provide a more secure environment for crypto transactions.

While the Morocco crypto community is expecting the unban of crypto, Jouahri mentioned that the central bank is also considering developing a central bank digital currency (CBDC), which would be controlled by the central bank, unlike decentralized crypto.

Meanwhile, the North African country has been cautious in its approach towards crypto over the years, fearing the loss of economic and monetary sovereignty. However, with the recent rise and hype surrounding crypto, the country is now exploring ways to harness its potential while maintaining control.

Other Countries Make Similar Move

While Morocco plans to regulate crypto, other African countries like Ghana have recently made a similar move. The West African nation is poised to enter the crypto industry, with the Bank of Ghana (BoG) planning to introduce a regulatory framework to guide digital asset adoption in the country, marking a significant shift from the BoG’s previous stance.

The United Kingdom is also set to officially regulate crypto by 2026 to provide clarity and protection for consumers while promoting innovation in the industry. The regulators have published a roadmap outlining plans, which include proposals for stablecoin regulation, trading platforms, and decentralized finance (DeFi) activities.

While other countries are becoming more crypto-friendly, China, which imposed a blanket ban on crypto transactions in 2021, has yet to lift the restriction officially. Although rumors of a possible lifting of the ban have been circulating, no official announcement has been made to confirm or deny these claims. Nonetheless, some Chinese residents still get involved in secret crypto transactions.

Asset manager Bitwise has revealed plans to convert its $1.3 billion crypto index funds to a crypto exchange-traded product (ETP), allowing more investors to gain crypto exposure by purchasing products that closely track the price of selected cryptocurrencies.

Bitwise’s BITW As An ETP

According to Bitwise, NYSE Arca, the top U.S. exchange for listing and trading ETFs, has filed to list the Bitwise 10 Crypto Index Fund (BITW) as an ETP. BITW is the world’s first and largest crypto index fund.

“Bitwise believes that ETPs are among the most efficient, convenient, and useful vehicles for providing crypto exposure. We remain committed to converting BITW to an ETP,” said Hunter Horsley, CEO of Bitwise.

Significantly, the ETP structure is designed to offer many benefits to BITW shareholders, including robust regulatory protections and enhanced efficiency to boost asset security.

Additionally, the ETPs allow for continuous subscriptions and redemptions at Net Asset Value (NAV), allowing traders to profit by buying/selling. This will ensure that the products trade at a fair market price, closely aligning with the value of the underlying crypto asset.

Further, Bitwise Chief Investment Officer (CIO) Matt Hougan has expressed optimism about the firm’s latest move, a significant step toward crypto asset investment and enlightenment for institutional and individual investors. He said:

“From Bitwise’s beginning in 2017, we’ve sought to give investors easy exposure to crypto’s groundbreaking potential. BITW opened up new possibilities as the first fund to provide a broad, index-based approach to crypto markets, and it remains the leader in its class. We’re excited for the next phase of BITW’s development.”

Bitwise ETF Success

Birwise has taken different steps into the American crypto ETF market by launching its Bitcoin ETF, BITB, and Ether ETF, ETHW, following government approvals. Despite wavering market conditions, both funds have recorded a group inflow of over $2.6 billion.

The asset manager has also made waves in the European ETF market by acquiring  ETC Group, a renowned physical crypto ETP issuing company in London.

Meanwhile, Bitwise has filed for a spot XRP ETF and is awaiting a reply from the U.S. Securities and Exchange Commission (SEC).