Crypto Chronicle - 27/03/24

Welcome to the 30th edition of the Crypto Chronicle, brought to you by Imperial Wealth.

You can listen to todays episode here.

News

BlackRock Initiates Asset Tokenisation Through Debut of Digital Liquidity Fund

BlackRock, the world’s largest asset manager, has introduced asset tokenisation with the launch of its Digital Liquidity Fund, marking a significant step in the realm of digital assets. 

This move underscores BlackRock’s recognition of the growing importance of blockchain technology and its potential to revolutionise traditional finance. 

The fund, which operates on the Ethereum blockchain, aims to enhance liquidity and accessibility for institutional investors. 

By leveraging blockchain technology, BlackRock aims to streamline processes and unlock new opportunities in the asset management landscape.

Read more here: https://imperialwealth.com/news/blackrock-initiates-asset-tokenisation-through-debut-of-digital-liquidity-fund

SEC Extends Deadline for VanEck’s Spot Ethereum ETF Application

The SEC postponed its decision on VanEck’s spot Ethereum ETF application, extending the review period until May 23. 

This follows the extension of deadlines for other Ether ETFs. Speculation suggests future Ether ETF applications could face rejection. 

Reports indicate the SEC is investigating companies linked to the Ethereum Foundation, raising doubts about ETH ETF approvals. 

Despite approving Ether futures products, the SEC is delaying spot Ether ETF decisions, opening them to public comments. 

Senators urge SEC Chair Gary Gensler to reject Ether ETFs due to potential risks for retail investors, following the approval of spot Bitcoin ETFs in January.

Read more here: https://imperialwealth.com/news/sec-extends-deadline-for-vanecks-spot-ethereum-etf-application

Report: SEC Seeking to Classify Ether as a Security

The SEC has reportedly subpoenaed multiple companies regarding efforts to classify Ether as a security, potentially leading to regulatory action. 

An investigation into the Ethereum Foundation by the SEC might grant it authority over Ether’s classification. 

U.S. firms received subpoenas related to transactions with the Foundation. SEC Chair Gary Gensler hasn’t directly addressed Ether’s status, despite previous statements. 

Prometheum’s plan to offer Ether custody services has intensified pressure on the SEC. Regulation of Ether may conflict with the U.S. Commodity Futures Trading Commission, with lawmakers yet to clarify roles.

Read more here: https://imperialwealth.com/news/report-sec-seeking-to-classify-ether-as-a-security

Ethereum’s Dencun Upgrade Reduces Transaction Costs for Layer 2 Solutions

Dencun, Ethereum’s recent upgrade, shows promising early results by aiming for faster and cheaper transactions via layer 2 solutions like Arbitrum and Optimism. 

Brian Gallagher underscores its timely launch amidst rising competition from chains like Solana. 

Despite Ethereum’s historical scaling challenges and past upgrades like the Merge, which transitioned to proof-of-stake, transaction fees remain a concern. 

Dencun’s focus on layer 2 interactions seems effective, with transaction costs significantly reduced. 

Encouragingly, platforms like Arbitrum and Optimism report substantial transaction volume increases. 

Gallagher stresses the importance of Dencun’s long-term impact on DeFi. 

While challenges remain, Ethereum’s upgrade signals a positive shift in the market.

Read more here: https://imperialwealth.com/news/ethereums-dencun-upgrade-reduces-transaction-costs-for-layer-2-solutions

Hedge Fund Clients at Goldman Sachs Are Reentering Crypto Markets Strongly This Year

Goldman Sachs has seen a resurgence in client interest in cryptocurrencies, driven by the endorsement of Bitcoin and the introduction of ETFs. 

Head of digital assets, Max Minton, reports that many prominent clients are entering or considering the crypto space, largely due to recent ETF approvals. 

Despite managing $2.8 trillion in assets, Goldman currently offers only crypto derivatives, not spot products. 

Clients, especially hedge funds, are using derivatives to navigate crypto volatility. Minton predicts increased interest in Ether if a spot ETF is approved. 

Goldman aims to expand its crypto services to a wider client base, including asset management funds and banks.

Read more here: https://imperialwealth.com/news/hedge-fund-clients-at-goldman-sachs-are-reentering-crypto-markets-strongly-this-year

Australian Corporate Regulator Developing Crypto Policies That Are ‘Outcome Based’

ASIC is finalizing regulatory reforms for the cryptocurrency sector, aiming to balance consumer protection, market integrity, and financial innovation. 

Commissioner Alan Kirkland emphasized fostering responsible innovation while mitigating risks. 

The ASIC aims for clear rules to maintain market integrity, enforceable mechanisms, and effective enforcement. They’ve received proposals for regulating tokenization of real-world assets, intending to regulate through existing or proposed frameworks.

The Treasury’s October 2023 consultation paper suggested crypto exchanges obtain a financial services license if holding over AU$5 million or AU$1,500 per individual. Responses varied, with the Treasury clarifying the paper seeks feedback on proposed regulations.

Read more here: https://imperialwealth.com/news/australian-corporate-regulator-developing-crypto-policies-that-are-outcome-based

Collaborative Effort between Avalanche and Chainlink for On-Chain Asset Settlement in Australasia

ANZ and Chainlink Labs unveiled outcomes of their recent partnership, focusing on connecting Avalanche and Ethereum blockchains for on-chain settlement solutions. 

Using Chainlink’s cross-chain interoperability protocol (CCIP), ANZ demonstrated seamless access, trading, and settlement of tokenised assets across various networks and currencies. 

The process involved acquiring tokenized assets on Ethereum and settling transactions on Avalanche, aligning with the “Delivery versus Payment (DvP)” principle. 

ANZ’s utilisation of its Evergreen Subnet showcases its commitment to blockchain innovation. ANZ aims to revolutionise conventional settlement procedures and extend blockchain solutions to its global clientele. 

The collaboration signifies the convergence of traditional finance and DeFi, with ANZ poised to deploy blockchain solutions on mainnets, alongside initiatives like Citigroup’s partnership with Ava Labs for tokenising private equity funds on Avalanche.

Read more here: https://imperialwealth.com/news/collaborative-effort-between-avalanche-and-chainlink-for-on-chain-asset-settlement-in-australasia

Bitcoin Aims For its First-Ever Seven-Month Winning Streak

According to TradingView data, Bitcoin may see its seventh consecutive monthly green candle by March’s end, with the condition that it maintains a price above February’s closing value of $61,130. 

This achievement would mark Bitcoin’s first seven-month uptrend. 

Previously, it showed six consecutive green candles from October 2020 to March 2021, rising by 445%. 

AllianceBlock’s Matthijs de Vries predicts potential price surges, especially with spot Bitcoin ETF inflows and nearing halving cycles.

Amidst a significant sell-off by spot Bitcoin ETFs, investors remain resilient, as observed by Willy Woo, indicating continued confidence in Bitcoin.

Read more here: https://imperialwealth.com/news/bitcoin-aims-for-its-first-ever-seven-month-winning-streak

Technical Analysis

Last weeks TA theme was around planning for support levels around the blood that was occurring in the market, in which the very first level of roughly $60k was hit and we have bounced significantly.

As I stated:

“Ultimately, still remaining really positive. Regardless of any dump from here. As long as we don’t present bearish market structure by breaking our HTF bullish market structure, we are sweet in my eyes.

We have pumped over 4-5x from the bottom and get scared of a -10%, -20% pullback? No, not here at IW.”

And boom, we have pumped to over $70k after sitting briefly at $60k.

Please see the chart below:

You can see we cleanly held trend and have continued to bounce as much as 17.5%.

For now locally, we face a pivot high and the local .786 for resistance. If we clear this, I expect new ATHs to come.

Please see the chart below:

That’s generally how I see things for now as I remain patient!

We’ll be back next week.

Thanks!