I explore some of the market dynamics associated with the Grayscale Bitcoin Trust in a new blog post. Most institutional investors participate in crypto-asset markets through investment funds like Grayscale Investment’s closed-end trusts. As publicly traded trusts that report to the U.S. Securities and Exchange Commission, they relieve investors of concerns about storage, custody and security of their holdings. Grayscale is the dominant crypto fund manager with over $37 billion assets under management.
And in more recent news, Grayscale Investments has reportedly filed to register a new cryptocurrency trust for decentralized finance platform Yearn Finance (YFI)!
The Ontario Securities Commission has reportedly cleared the launch of the Purpose Bitcoin ETF, making it the first to gain regulatory approval in North America.
India will go ahead with a complete ban on investment in cryptocurrencies, while providing existing investors a transition period to exit their holdings. its usage in all forms will be banned through the new law that will be introduced in Parliament, a senior Finance Ministry official said on condition of anonymity. The official, however, said the ban won’t be enforced overnight and cryptocurrency investors will be given a transition period of three-to-six months after the implementation of the new law to liquidate their investments.
Nouriel Roubini predicted that “since the fundamental value of bitcoin is zero and would be negative if a proper carbon tax was applied to its massive polluting energy-hogging production… the current bubble will eventually end in another bust. He concluded by saying that “risky, volatile bitcoin doesn’t belong in the portfolios of serious institutional investors. Many of its retail backers are suckers being manipulated by an army of self-serving insiders and snake oil salesmen. Tesla’s Elon Musk and MicroStrategy’s Michael Saylor may be betting the house on bitcoin. That doesn’t mean you should.”
Roubini also thinks Tether is issuing fake money. And that nothing short of an audit will prove the $30 billion in USDT the BVI-registered company has spewed out into the crypto markets thus far are even 74% backed. Tether is a “criminal enterprise,” he bluntly told reporters on Coindesk TV. In a 10-minute interview, Roubini predicted Tether’s looming demise, called for the SEC to look into Elon Musk’s bitcoin tweets, and claimed that central bank digital currencies will spell the end for crypto.
Nigeria’s Securities and Exchange Commission (SEC) has put plans to regulate cryptocurrencies on hold in light of the central bank’s decision to ban them.
The South African Intergovernmental Fintech Working Group (IFWG) launched ‘Project Khokha 2’ to explore the use of tokenised money, blockchains and digital currency in South Africa. This comes after the group’s first Project Khokha test which looked at using blockchain technology to speed up payment systems in the country. As part of Project Khokha 2, the IFWG said it will further investigate the use of Distributed Ledger Technology (DLT) in the country’s financial sector.
The Central Bank of Saudi Arabia launched its new instant payments system on February 21, after the successful completion of the pilot with a number of Saudi banks. The system will enable financial institutions, companies and individuals to complete transfers 24/7 between different banks instantly.
* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.