Block 1: Key news

Deutsche Bank files for crypto custody license

Deutsche Bank, one of the world's leading banks, has applied for a license to offer a cryptocurrency custody service, underlining its ambition to integrate into the crypto ecosystem. This follows the bank's announcement two years ago of its aim to incorporate crypto services into its platform. Details of the services it will offer, such as buying and selling cryptocurrencies, have yet to be confirmed.

Do Kwon behind bars in Montenegro

Terraform Labs ex-CEO Do Kwon has been sentenced to four months in prison in Montenegro for possession of false identity documents. However, he has already spent almost three months in police custody, which considerably reduces his sentence since it is deducted from the four months in prison. This case is linked to Terra's (LUNA) collapse in 2022, which had a major impact on the cryptocurrency industry. Do Kwon is also facing prosecution in South Korea and the USA for financial crimes related to the Terra failure. The likelihood of Do Kwon being extradited to either country is very high, and the length of incarceration this time around would potentially be far more consequential. 

The UK moves ahead with cryptocurrency regulation

The UK has taken an important step towards regulating crypto-currencies with the passage of the Financial Services and Markets Bill by the House of Lords, the highest house of the British Parliament. The Bill, designed to overhaul laws and regulatory requirements in the post-Brexit financial sector, includes provisions concerning cryptocurrencies. Initially, only stablecoins are concerned, but amendments may soon extend regulation to other cryptocurrencies and related activities, such as exchange, lending, governance, staking and mining.  Stablecoins are expected to be governed by standard payment rules.

The race for the Spot Bitcoin ETF is on in the USA

Intense rivalry has erupted between Wall Street financial institutions as they battle for Securities and Exchange Commission (SEC) approval to launch the first Spot Bitcoin ETF. Following BlackRock's lead, Bitwise, Invesco and Wisdom Tree have also filed applications for spot Bitcoin ETFs. These applications are currently being reviewed by the SEC, but none has yet been approved. What's at stake? We explore them in Crypto Analysis.

Block 2: Crypto Analysis of the week

BlackRock is planning to launch a bitcoin spot ETF. A decade has passed since Cameron and Tyler Winklevoss, founders of cryptocurrency exchange Gemini, launched the first request for an ETF on bitcoin, back when BTC was barely valued at $90. Their intention was to launch an ETF under the name "COIN", later taken over by Coinbase. However, their ambitious project was thwarted by a categorical refusal from the SEC. 

What were the SEC's main reasons for this refusal? Here are the main reasons: 

Lack of market transparency: the SEC expressed concerns about potential manipulation of the cryptocurrency market and price volatility. It pointed out that the markets on which Bitcoin is traded are not regulated in the same way as traditional securities markets, which could facilitate price manipulation.

Fraud and market manipulation risks: the SEC is concerned about the ability to monitor and prevent fraud and market manipulation in the cryptocurrency ecosystem. Due to the relative anonymity of Bitcoin transactions, the SEC believes it may be more difficult to monitor suspicious or fraudulent activity.

Insufficient oversight: The SEC said the proposals failed to meet market oversight requirements. In particular, they failed to demonstrate that shared oversight arrangements are in place with a significantly linked market, an essential criterion for the creation of an ETF.

Over the past ten years, more than 30 applications for Spot Bitcoin ETFs have been filed, all rejected mainly for the reasons mentioned above, including those by 21Shares and VanEck. Yet the aspiration for a Bitcoin Spot ETF persists among crypto-investors.

Such an ETF would offer an unprecedented opportunity for retail and institutional investors to engage in direct bitcoin investment, promising simplicity and security via traditional financial markets. So far, the road to this dream has been littered with failed attempts.

But the situation may be about to change.

BlackRock, the global asset management giant, is working hard to launch a Spot ETF on bitcoin. Billed as the iShares Bitcoin Trust, BlackRock's proposed ETF will be a trust, with Coinbase (COIN) acting as custodian for the underlying bitcoins.

Why is BlackRock's attempt more promising than previous ones?

There are several plausible explanations:

BlackRock, with over $10 trillion in assets under management, wields considerable power and influence in the global financial industry. BlackRock CEO Larry Fink is an influential figure in the Democratic Party, which also includes SEC Chairman Gary Gensler. BlackRock has also committed to a monitoring program to curb market manipulation, which has been a major hurdle in previous application rejections.

Given BlackRock's impressive track record (575 ETF applications accepted against just one rejection), it's logical to think that the bitcoin ETF project could well be accepted.

However, the impact of a BlackRock ETF on the crypto-currency sector can be seen from different angles. 

Speculators smile again 

Despite constant adversity from the US regulator in recent weeks, the crypto-currency market has reacted optimistically to BlackRock's ETF application, leading to a 15% rise in the asset's price over the past week.

Investors don't seem to see BlackRock's move as a potential setback. If approved, BlackRock's Bitcoin ETF could, for BTC's most fervent speculator-defenders, potentially emulate what BlackRock achieved for gold, taking bitcoin from its current market capitalization of $1 trillion to an astonishing $13 trillion. Can you believe it? In any case, competition from Spot Bitcoin ETFs could intensify if BlackRock's initiative triggers similar launches from WisdomTree and Invesco.

All roads lead to Wall Street

However, BlackRock's move, which coincides closely with the SEC's recent crackdown on Coinbase and Binance, has sparked speculation of a strategic ploy to undermine cryptocurrency platforms and favor more regulated entities such as BlackRock.

This development could, for some, potentially divert cryptocurrencies from their initial decentralized vision and bring them closer to traditional centralized finance. 

Ultimately, what remains certain is the arrival of institutional players, which is likely to support bitcoin prices. Although there are Bitcoin Futures ETFs, there are currently no Bitcoin Spot ETFs. What's the difference? I'm concocting an article on the subject, to be found very soon in the columns of Zonebourse.

Block 3: Gainers & Losers

Block 4 : Things to read this week

What's the metaverse, exactly? (Wired)

Is crypto dead  (The Atlantic)

U.S. regulators continue crypto crackdown - but here's for the latest charges are different (The Conversation) 

Media psychology and the emotional roller coaster of Bitcoin Twitter (Bitcoin Magazine)