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This week’s Crypto Biz explores significant developments in the cryptocurrency sector, including Hong Kong’s crypto ETF market expansion, Morgan Stanley’s approval for Bitcoin ETFs, Xapo Bank’s entry into the UK market, and Core Scientific’s major deal with CoreWeave.
Market Downturn Spurs Massive Inflows into Centralized Exchanges
On August 5, a sharp market downturn saw Bitcoin’s price drop 10% in under two hours, falling from $58,350 to $52,500. This volatility led to substantial inflows into centralized exchanges (CEXs), reflecting increased trading activity and investor reaction to the price drop. Binance, one of the largest exchanges, experienced $1.2 billion in net inflows within 24 hours. According to DefiLlama’s CEX Transparency dashboard, Bybit, Crypto.com, and OKX also saw significant inflows of $301.4 million, $107.8 million, and $97.7 million, respectively. These inflows are attributed to a combination of external wallet transfers, fiat deposits, and active trading. Binance CEO Richard Teng highlighted these positive flows as an indication of “strong investor confidence” despite market stress.
Ripple Labs Faces $125 Million Penalty in SEC Case
In regulatory news, Ripple Labs has been ordered to pay a $125 million civil penalty for violating U.S. securities laws, following a case initiated by the Securities and Exchange Commission (SEC) in 2020. The SEC had previously sought a $2 billion settlement from Ripple. Despite the substantial penalty, Ripple CEO Brad Garlinghouse described the ruling as a “victory,” given the lower-than-expected settlement amount.
Hong Kong Expands Crypto ETF Market with Mox Bank Initiative
Hong Kong’s crypto landscape has seen notable expansion with Mox Bank, a virtual bank under Standard Chartered, launching a crypto ETF trading service. Mox Bank now enables customers to directly trade spot Bitcoin and Ethereum ETFs. The bank has plans to broaden its crypto offerings, including direct purchases and trading of crypto assets through partnerships with licensed exchanges. Hong Kong approved spot crypto ETFs on April 30, aligning with its strategy to establish itself as a major crypto hub in the Far East.
Morgan Stanley Now Allows Advisers to Recommend Bitcoin ETFs
Morgan Stanley, the largest wealth management firm in the U.S., has authorized its 15,000 financial advisers to recommend Bitcoin ETFs to their clients. Initially, advisers will focus on ETFs from BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund. This development marks a significant shift, as leading advisory firms have traditionally been cautious about spot Bitcoin ETFs. Increased adoption by major advisory platforms could lead to a surge in inflows into Bitcoin ETFs, according to Matthew Sigel, VanEck’s head of digital assets research.
Xapo Bank Launches Interest-Bearing Bitcoin Accounts in the UK
Xapo Bank has made its debut in the UK market by securing a banking license. The bank is now the only licensed institution in the UK offering combined interest-bearing accounts for U.S. dollars and Bitcoin. Xapo customers can transfer up to 1 million British pounds ($1.28 million) and make payments to UK-based wallets and bank accounts. The Bitcoin account offers a 1% yield without the need for staking, lending, or locking up assets.
Core Scientific Expands GPU Hosting Deal with CoreWeave
Core Scientific’s stock price surged by over 12% on August 6 following the expansion of a billion-dollar deal with artificial intelligence cloud provider CoreWeave. CoreWeave is increasing its hosting arrangement with Core Scientific, focusing on the provision of additional resources for Nvidia graphics processing units (GPUs). As part of the expanded deal, Core Scientific will modify its infrastructure to provide approximately 112 megawatts of additional power to CoreWeave’s GPUs. This development comes nearly two months after Core Scientific declined a buyout offer from CoreWeave.
Significant Shifts in the Crypto Landscape
The latest updates from the cryptocurrency world highlight several key shifts in the market. The substantial inflows into centralized exchanges amid recent volatility underscore a resilient investor sentiment. Meanwhile, Hong Kong’s advancements in the crypto ETF market, Morgan Stanley’s new Bitcoin ETF recommendations, Xapo Bank’s UK expansion, and Core Scientific’s billion-dollar deal illustrate ongoing developments and growing institutional interest in the crypto sector. These changes could have far-reaching implications for the industry, potentially influencing market trends and investment strategies soon.
