Record $6.8B Bitcoin and Ether Options Contracts Expiration Looms: Potential for Gamma Squeeze in Crypto Market
The cryptocurrency market is bracing for a significant event as a record $6.8 billion worth of Bitcoin and Ether options contracts are set to expire this week on the Deribit exchange. This event is significant due to the large concentration of open interest around the $30,000 mark for Bitcoin, creating a negative gamma position for dealers. In layman’s terms, this means that a slight price shift from the $30,000 mark could potentially trigger an exponential rise or fall in Bitcoin’s price, known as a gamma squeeze or sling-shot effect. Meanwhile, for Ether, market makers have amassed long gamma positions, reducing the risk of a gamma squeeze, and are expected to keep Ether relatively stable during settlement. This activity could lead to a heightened impact on spot prices as the expiration date nears.
Bitcoin Price Skyrockets amid Thin Liquidity and Institutional Buying: A Deeper Look into June’s Crypto Market Trends
Bitcoin’s price has surged more than 12% in June, hitting its highest level since mid-April. This increase was initially attributed to BlackRock’s filing for a spot bitcoin exchange-traded fund, but a significant driver is identified as the thin liquidity in the market and the activity of large players. As Bitcoin’s market depth has dropped 20% since the start of the year, large trades have had an amplified effect on price movements. Regulatory scrutiny on crypto exchanges has further driven the lack of liquidity. However, retail traders have yet to significantly return to the market, and daily trading volume remains low compared to peaks in 2021. This rally has been largely driven by long-term institutional buyers, with the market showing some similarities to the trends of 2018.
Institutional Interest Fuels Resurgence in Bitcoin ETFs: ProShares Bitcoin Strategy ETF Crosses $1 Billion Milestone
A resurgence of interest in Bitcoin exchange-traded funds (ETFs) is evident, driven by an influx of institutional investors. The ProShares Bitcoin Strategy ETF (BITO) recently reported its most significant weekly inflow in a year, with a sum of $65.3 million boosting its assets beyond $1 billion. This fund, which tracks Bitcoin futures, is notably popular among institutional investors. Since BlackRock filed for its own Bitcoin ETF on June 15, there has been a noticeable increase in Bitcoin derivatives interest. Furthermore, the upswing in ETF trading has positively impacted Grayscale, the world’s largest crypto asset manager, whose Bitcoin Trust has seen a reduction in its discount to spot BTC prices. Amid this trend, various entities such as WisdomTree and Invesco have filed or renewed their applications for a spot Bitcoin ETF with the Securities and Exchange Commission.
Grayscale’s Dominance Threatened by BlackRock’s Spot Bitcoin ETF Filing: Bernstein Analysis Highlights Room for Growth and Efficiency
Grayscale, currently the largest Bitcoin asset management product with its $19 billion BTC trust (GBTC), could face competition in the wake of Blackrock’s filing for a spot bitcoin exchange-traded fund (ETF) in the U.S, according to a recent Bernstein research report. Despite Grayscale earning around $380 million in annual fees, the GBTC product is seen as inefficient, illiquid, and has consistently traded at a discount. Bernstein analysts assert that the entry of Blackrock and other potential players into the spot ETF market could provide an optimal means for both retail and institutional investors to engage with Bitcoin. They also note the significant potential for a compliant ETF to expand its share in the bitcoin market, citing Grayscale’s current 3% market cap as indicative of ample growth opportunity. The analysts suggest that the pricing structure of GBTC, currently at a 2% annual fee, could be aligned more closely with traditional asset ETFs which tend to be cheaper, often under 0.5%.
Delayed IRS Crypto Tax Compliance Rules Create Uncertainty: A Push for Simplified Tax Liability Amid SEC Regulation
The cryptocurrency sector is awaiting the introduction of IRS tax compliance rules that were initially approved by Congress more than a year ago, with the aim of simplifying the process of determining tax liabilities from trading virtual currencies. However, the rollout of these regulations has been unexpectedly delayed, even though the SEC continues to actively regulate the crypto sector, leading to speculation and confusion among stakeholders. Despite the regulations having already been approved by the White House budget office, their implementation has been indefinitely postponed. This delay occurs in the context of a larger government effort to reduce the estimated $500 billion in uncollected taxes annually. Meanwhile, uncertainty remains regarding the specifics of the new regulations and their applicability across the diverse range of entities in the digital asset ecosystem.
Dormant Ethereum ‘Crypto Whale’ Reawakens: Potential Impact on the ETH Market and Price Volatility
A dormant Ethereum address, with a history of significant transactions, recently exhibited signs of activity, raising concerns about potential impacts on the Ethereum price rally. The account holder, an early Ethereum participant who amassed 192,026 ETH during a 2015 ICO, has shown a pattern of strategic selling, moving large volumes of ETH to centralized exchanges. The last notable activity from this address was in March 2017, when it transferred 36,000 ETH to the Kraken exchange, potentially selling at an average price of $255. While the recent awakening of this ‘crypto whale’ led to initial market concerns, Ethereum’s price managed to recover from a 14% drop since the end of May. However, the resurgence of such large holders may signal a need for cautious trading, given their potential to trigger market volatility.
Brazilian Hospital Breaks New Ground by Accepting Cryptocurrency Payments: A Snapshot of Rising Crypto Adoption in Latin America
The Rolante Hospital Foundation (FHR) in Rio Grande do Sul, Brazil, has become the country’s first hospital to accept cryptocurrency as payment. Patients can now utilize digital assets to pay for medical bills, outpatient services, and medication. With a population of approximately 22,000, the municipality of Rolante has emerged as a significant crypto adoption hub in Brazil, with around 120 local businesses accepting Bitcoin and other cryptocurrencies. Numerous Bitcoin advocates have launched initiatives in the state to promote the use of Bitcoin in commerce, propelled by a potential increase in local inflation. The move represents a growing trend in Latin America where there’s a notable surge in using crypto for everyday transactions.
Swiss Authorities Freeze $26 Million in Crypto Tied to Terraform Labs Amid Fraud Investigations: Key Details Revealed
Swiss authorities have reportedly frozen around $26 million worth of cryptocurrency linked to Terraform Labs, its founder, Do Kwon, and other high-ranking officials within the firm. The cryptocurrencies were held in the Switzerland-based digital asset bank, Sygnum. This move follows requests from U.S. federal prosecutors and the Securities and Exchange Commission and marks the latest development in a saga that began with the collapse of Terraform Labs’ algorithmic stablecoin, UST, in May 2022. Kwon and Terraform Labs’ former CEO, Chang-joon Han, are currently under scrutiny for fraud, securities law violations, and several other charges associated with Terra’s collapse.
HSBC Spearheads Crypto ETF Trading in Hong Kong: Expanding Access and Launching Virtual Asset Investor Education Centre
HSBC, the largest bank in Hong Kong, has recently started allowing its clients to buy and sell Bitcoin and Ethereum exchange-traded funds (ETFs), marking a significant milestone in the crypto industry. This move represents the first instance of a bank in Hong Kong facilitating ETF trading, promising to widen cryptocurrency access for local residents. There had been speculation earlier this month about Hong Kong regulators encouraging HSBC and Standard Chartered to serve crypto clients. Despite these rumors, banks have shown hesitance in dealing with cryptocurrency exchanges due to concerns about money laundering and other potential illegal activities. Alongside this development, HSBC also introduced the Virtual Asset Investor Education Centre, requiring investors to read and confirm educational materials and risk disclosures before investing in any Virtual Assets-related products.
Decoding Global Impact: How Turkey’s Interest Rate Hike and China’s Economic Woes Could Shape the Cryptocurrency Market – Insights from Cointelegraph’s Marcel Pechman
Marcel Pechman, a Cointelegraph analyst, explores potential impacts on the cryptocurrency market from economic conditions in Turkey and China in a recent episode of Cointelegraph’s Macro Markets. He suggests that Turkey’s drastic interest rate hike to combat inflation might lead to the introduction of hundreds of millions of new cryptocurrency investors. Meanwhile, the economic struggles in China, characterized by declining GDP growth and general consumer pessimism, could also influence Bitcoin and other cryptocurrencies. Pechman theorizes that if China’s stock market goes down, it’s likely that pressure will be applied to cryptocurrency prices as well. Despite this, he presents an optimistic case for cryptocurrency adoption during economic downturns, such as that seen in China, with potential catalysts like stimulus checks being spent on cryptocurrencies.
Japan’s Tax Reform: Token Issuers Exempted from 30% Corporate Tax on Unrealized Crypto Gains – A Boost for Crypto Businesses
Japan’s National Tax Agency has revised its corporate tax guidelines to exempt token issuers from paying corporate taxes on unrealized cryptocurrency gains. This exemption follows the government’s approval six months ago to eradicate tax obligations on paper gains for crypto firms on tokens they issued and held. The new tax rules are part of the broader tax reform for 2023 discussed since last August, and the final approval was given this week. The tax adjustment, which exempts token issuers from a 30% corporate tax rate on their unrealized gains, is expected to ease business operations involving token issuance. This comes as part of a series of significant changes in Japan’s cryptocurrency landscape, including stricter Anti-Money Laundering measures and restrictions on stablecoin issuance by non-banking institutions.
SOURCES:
https://www.coindesk.com/markets/2023/06/26/crypto-traders-eye-68b-bitcoin-and-ether-options-expiry/
https://www.cnbc.com/2023/06/26/bitcoin-btc-is-up-12percent-this-month-in-part-due-to-thin-liquidity.html
https://cointelegraph.com/news/proshares-bitcoin-etf-bito-weekly-inflows-largest-in-year
https://www.coindesk.com/business/2023/06/26/us-has-room-for-a-compliant-crypto-etf-to-grow-market-share-as-a-bitcoin-on-ramp-bernstein/
https://www.politico.com/news/2023/06/26/crypto-tax-regulations-00101937
https://u.today/sleeping-ethereum-whale-awakens-and-moves-millions-is-it-end-of-eth-price-rally
https://cryptonews.com/news/brazilian-hospital-will-accept-crypto-pay-national-first.htm
https://decrypt.co/146166/swiss-authorities-freeze-26m-worth-of-do-kwon-terraform-labs-crypto-assets-report
https://watcher.guru/news/hsbc-enables-bitcoin-ethereum-etf-trading-in-hong-kong
https://cointelegraph.com/news/how-could-the-chinese-economic-crisis-impact-bitcoin-and-crypto
https://cointelegraph.com/news/token-issuers-in-japan-exempt-from-30-crypto-tax-on-paper-gains
