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Richard Heart's Christmas Message Ignites Optimism in Pulsechain Community!

January 04, 2024

Grayscale Submits Bitcoin ETF Filing with SEC to Adopt Cash Redemption Model

Grayscale took a significant step by submitting an updated filing to the Securities and Exchange Commission (SEC) to convert its GBTC into a spot Bitcoin exchange-traded fund (ETF) through a cash redemption model. Bloomberg Intelligence's James Seyffart noted this move and highlighted Grayscale's alignment with the SEC's cash-only creation and redemption guidelines. Notably, other entities like BlackRock, ARK Invest, and 21Shares had already adopted this model for regulatory compliance.

The adoption of a cash redemption model means investors will exclusively use cash for transactions rather than exchanging Bitcoin for ETF shares, a deviation from the usual ETF approach, as described by Bloomberg Intelligence's Eric Balchunas. Grayscale's filing emphasized the necessity for cash-based transactions for Baskets, outlining the limitations on in-kind transactions for share creation and redemption.

However, amidst this transition, Grayscale's filing also included a puzzling alteration regarding airdrops and forks, as highlighted by finance lawyer Scott Johnson. Johnson found it confusing that Grayscale decided to definitively abandon these aspects, wondering if this change was influenced by SEC regulations.

Simultaneously, Hashdex engaged in discussions with the SEC during the holiday period. Unlike typical meetings held with SEC divisions like Trading and Markets or Corporate Finance, Hashdex's CIO and Head of Products, Samir Kerbage, met directly with SEC Chair Gary Gensler on December 26. This interaction stood out, indicating a unique engagement level between Hashdex and the SEC chair compared to the usual procedures followed by ETF issuers during such meetings.

Global Efforts to Regulate the Ever-Growing Crypto Markets

Cryptocurrencies have reached a size too significant to be ignored globally, prompting efforts towards regulation rather than eradication. The focus on regulating the future of these markets has led to concrete steps across various regions worldwide.

In the Middle East, Dubai has shown a keen interest in cryptocurrencies, establishing the Dubai Virtual Assets Regulatory Authority (VARA) in 2022 and announcing comprehensive rules by February 2023. Qatar also joined in by initiating consultations for crypto regulations within the Qatar Financial Centre.

The European Union (EU) introduced the Markets in Crypto-Assets (MiCA) regulation in 2023, aiming to ensure transparency, protect investors, and create consistent rules across its 27 member states. This move by the EU sets a benchmark for global standards, often followed and adapted by other nations.

Meanwhile, the United Kingdom is streamlining its approach by mandating FCA approval for crypto firms by 2024, studying crypto advertisements, and establishing new regulations for staking services. However, despite expectations, substantial crypto-friendly strides were not taken.

In the Asia-Pacific (APAC) region, Singapore made significant progress with the VASP, while Hong Kong implemented rule changes for individual crypto services. Australia is in the early phases of developing comprehensive regulations for crypto firms and CBDCs. Taiwan prioritizes customer protection through non-binding principles for virtual asset platforms, and Japan gears up for stricter AML/CFT measures, including the implementation of the "Travel Rule."

These global efforts illustrate the widespread recognition of the need for regulation and oversight in the cryptocurrency realm, with each region making strides toward establishing its regulatory framework to manage this evolving financial landscape.

Fresh Money Flows to Crypto as Stablecoin Market Expands After 18-Month Downtrend

Fresh capital is surging into the cryptocurrency sphere, notably witnessed by the burgeoning stablecoin market, with Tether's USDT achieving a record-high market cap of $89 billion. Over the past month, data from Glassnode reveals a nearly $5 billion increase in the combined market capitalization of the largest stablecoins, reaching $124 billion.

This expansion marks a significant shift from an enduring decline that commenced around May 2022, aligning with the onset of the challenging crypto winter. Stablecoins, mirroring cash in token form, serve as a vital bridge between traditional fiat money and blockchain-based digital asset markets, furnishing liquidity for trading and lending within the crypto ecosystem.

The reversal in stablecoin market size augurs well for the recent crypto rally's overall robustness. Tanay Ved, an analyst at Coin Metrics, sees this upswing as a precursor to enhanced on-chain liquidity, signifying a landscape with more capital available for deployment.

Primarily led by Tether (USDT), the dominant stablecoin used prominently on centralized exchanges and in emerging economies, this expansion, noted by Matrixport, witnessed a $7 billion surge in supply since September, gaining momentum notably from mid-October onwards.

Though Tether's USDT market cap has been steadily climbing throughout 2023, nearing $90 billion, surpassing its previous 2022 peak, competitive contractions from stablecoins like USDC and BUSD had previously offset USDT's growth.

Noelle Acheson, an analyst and Crypto Is Macro Now newsletter author, perceives this upward trend as indicative of increasing investor interest, signaling a potentially bullish stance for crypto assets. She notes that despite the positive trend, the total stablecoin market cap remains below levels seen earlier in the year, suggesting a more optimistic outlook presently compared to the past.

Fear not Richard Heart is alive and sends Christmas wishes to the pulsechain community.

Right before Christmas, the Pulsechain community received a much-awaited message from Richard Heart, the founder, in response to their persistent calls for communication amidst his absence from social media.

In his message, Richard was optimistic and remarkably clear, emphasizing the community's pivotal role in steering Pulsechain towards success. He reiterated his unwavering support for free speech and the freedom of movement within the project.

Expressing confidence, Richard conveyed his belief in overcoming challenges posed by regulatory bodies like the SEC, standing alongside other crypto projects in this endeavor.

https://www.youtube.com/watch?v=lTUNUBVx7q4

Stay Frosty

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