Markets

Cryptocurrency after EU MiCA regulation

Published

7 months ago

30 June, 2024

How New EU Regulation Will Affect the Global Cryptocurrency Market

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of the crypto.news editorial team.

O Regulation of cryptoactive markets (MiCA) marks a significant milestone in the European Union’s journey to regulate the rapidly evolving crypto market. Its timeline and provisions have immense importance for both crypto companies and investors. As we approach crucial dates, starting with the enforcement of stablecoin provisions from June 30, 2024, and the full enforcement of MiCA on December 30, 2024, the crypto landscape is undergoing a transformative phase.

In the next two years

MiCA’s staggered deadlines and transition periods, which extend until 30 June 2026, imply a period of fragmented implementation across the EU and the European Economic Area (EEA). Jurisdictions such as Ireland (12 VASPs), Spain (96 VASPs) and Germany (12 VASPs) will grant a 12-month transition period. In contrast, other jurisdictions will offer longer periods, such as France (107 VASPs) with 18 months, while Lithuania (588 VASPs) will likely only grant five months. This transition phase will lead to market consolidation, as not all existing service providers will secure MiCA licenses. Many will look to capitalize on this interim period before ceasing operations.

The race between EU/EEA jurisdictions to become the main hub of crypto activity intensifies, with jurisdictions such as France, Malta and Ireland competing for the top spot. However, regulatory readiness and compliance for cryptoasset companies pose significant challenges. Regulators are facing a period of adjustment in training their staff to process MiCA requests, especially in jurisdictions with high volumes of applicants. The complexity of the various business models, which cover numerous products unknown to regulators, exacerbates this challenge. The general lack of expertise to authorize and supervise this sector requires substantial training efforts.

Challenges for crypto companies

MiCA, together with the wide range of related Tier 2 measures (many of which still need to be finalized) and other applicable EU instruments such as anti-money laundering laws, the Digital Operational Resilience Act (DORA) and the Electronic Money Directive (IN D), create a complex regulatory structure. Understanding which provisions apply to each type of entity and what documentation needs to be implemented will be challenging for some.

The withdrawal of cryptoassets, especially stable coins, from EU exchanges due to their issuers not obtaining their licenses in a timely manner will pose considerable obstacles and limit the availability of certain assets to consumers.

Adapting to MiCA will burden many entities and require substantial investments in technological infrastructure. Travel rulea requirement that information must be shared between VASPs for each crypto transaction, also comes into effect at the same time as MiCA. The Travel Rule requires CASPs to transfer a substantial amount of information about the originator. This includes address, personal identification number and customer identification number. In rare cases, it may even require the disclosure of the originator’s date and place of birth. This adds another layer of complexity, further highlighting the need for harmonization within the EU and solutions to comply with the Travel Rule that are interoperable and allow for secure data sharing while preserving user privacy.

Key Crypto Market Findings

Despite the challenges, MiCA inspires confidence in EU entities by strengthening regulatory oversight, promoting investor protection and attracting mainstream institutional participation. Enhanced consumer protection measures mitigate risks such as fraud and hacking, fostering trust among retail customers.

MiCA’s reporting requirements will result in regulators across the EU having more data, enabling them to effectively monitor market activities. The ability to freely authorize activities across the EU will facilitate cross-border operations and reduce regulatory fragmentation while expanding market reach.

The prescriptive nature and comprehensive regime of MiCA have set a precedent for global regulatory frameworks. Other jurisdictions are already observing and could replicate some of MiCA’s provisions and approach, contributing to regulatory harmonization on a global scale. However, concerns remain about whether this will stifle growth and innovation and whether companies will seek to move to more permissive and less restrictive jurisdictions.

Steps after MiCA

MiCA’s gaps in regulating emerging areas such as true defi (the provision of financial services or issuance of financial assets without identifiable intermediaries and without a single point of failure), lending, and NFTs necessitate continued policy discussions and additional regulatory measures. Reports on these aspects will inform future regulatory developments, potentially leading to a second iteration of MiCA in at least the next four to five years or supplementary measures.

MiCA signals a new era of regulation in the crypto market, aiming to balance innovation with investor protection and market integrity. While challenges persist, MiCA lays the foundation for a more transparent, secure and inclusive cryptographic framework in the EU and beyond. As the crypto landscape continues to evolve, regulatory regimes must adapt to emerging trends and technologies, ensuring sustainable growth and promoting investor confidence.

Ernesto Lima

Ernesto Lima is one of the founding partners of XReg Consulting and a qualified lawyer with over 17 years experience working in financial services regulation. As XReg’s legal and regulatory policy lead, he is highly experienced in the design, development and implementation of cryptocurrency legislative frameworks that meet global and local policy objectives. At XReg, Ernest leverages in-house European Cryptocurrency Markets Regulation (MiCA) expertise to advise European clients or those seeking to enter the European market. He also leads engagement with European public sector authorities and National Competent Authorities in their transition to MiCA compliance. Ernest has also spoken at industry conferences and trained international regulatory authorities on Europe’s MiCA regulation and how it will shape the future of the international cryptocurrency regulatory landscape. He also sits on the Financial Markets Law Committee to address issues arising from the use of cryptoassets and DLT.

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Markets

Crypto Markets Rebound as Spot Bitcoin ETFs Attract Massive Inflows

Published

6 months ago

17 July, 2024

FinCrypt Staff

Crypto Markets Rebound Ahead of Early Ethereum ETF Approval

This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.

Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).

The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.

Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.

Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.

Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.

Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.

Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.

U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.

Source

Markets

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Published

6 months ago

17 July, 2024

FinCrypt Staff

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.

Worldcoin (WLD) Price Analysis

O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.

The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.

Arweave (AR) Price Analysis

Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.

AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.

Price Analysis of Injective (INJ)

Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.

INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.

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Markets

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Published

6 months ago

17 July, 2024

FinCrypt Staff

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.

ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.

ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment

Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.

According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.

On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.

The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.

Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.

One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.

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Markets

Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt

Published

6 months ago

17 July, 2024

FinCrypt Staff

Bits + Bips: How to Play the ‘Trump Trade’ in Crypto After the Assassination Attempt

Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?

Posted on July 17, 2024 at 12:00 PM EST.

Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.

They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?

They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).

Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?

Program Highlights:

Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
What are the new updates about Ethereum ETFs and their expected launch?
Why Solana Hasn’t Performed Significantly Better Since Trump News
What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week