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Digital Assets: Research Analyst Predicts Asia and Europe to Gain Dominance in Crypto Market Amid Regulatory Uncertainty in the US

Matteo Greco, a Research Analyst at Fineqia International, a digital asset and fintech investment business, has provided key insights into recent developments in the cryptocurrency market. Last week, Bitcoin (BTC) closed at around $26,000, experiencing a slight decrease of 0.5% from the previous week’s closing price of $26,100. This was a tumultuous week, influenced by the lawsuit victory of Grayscale against the US Securities and Exchange Commission (SEC).

The court ruling stated that the SEC’s decision to reject the Grayscale Bitcoin ETF application was arbitrary and did not provide sufficient explanations for the rejection. As a result, the SEC will review the application again and issue a new verdict in the future. Following the court decision, the market experienced a strong rebound, with BTC briefly surpassing $28,000 before retracing back to the $26,000 level, which was the trading price prior to the lawsuit announcement.

While the Grayscale victory caused some short-term volatility, the final decision regarding whether Grayscale or any other digital asset manager will be able to list a Bitcoin Spot ETF is yet to be made. However, the victory did result in a narrowing of the discount on the Grayscale Bitcoin Trust (GBTC), reaching 16% before stabilizing around 20%. This is the lowest discount recorded since the beginning of 2022 and indicates increased investor confidence in the potential conversion of the trust into an ETF.

In other news, the SEC has announced a delay in its decision regarding the approval or rejection of Bitcoin Spot ETFs. Several filings from companies including Bitwise, VanEck, iShares, WisdomTree, Invesco, Wise, and Valkyrie met the first deadline between September 1 and 4. The second deadline is scheduled between October 16 and 19, with four deadlines in total for each filing. The SEC has the authority to delay its decision three times, and the final deadline for all applications is set for mid-March 2024.

The market did not experience significant movement following the SEC’s decision, as it was largely expected by investors and already factored into the market. Investors anticipate that the SEC will delay its decision as long as possible, likely pushing the final outcome to the fourth and last deadline.

While the US is caught in a battle between service providers and regulators, Asia is actively working towards building a friendly environment for digital asset businesses. Several countries in Asia have expressed their desire to become digital asset hubs and have demonstrated this commitment through various actions. For example, Binance, the largest global digital asset exchange, launched its Japan subsidiary in August, allowing Japanese customers to trade 34 digital assets and planning to increase the number to 100. Additionally, Switzerland-based SEBA Bank recently received an approval-in-principle from Hong Kong’s securities regulator, becoming the fourth entity to do so.

Both Asia and Europe are aiming to capture a larger share of the digital asset market, taking advantage of the uncertainty in the US caused by the tensions between service providers and regulators. This situation has led to a capital outflow from the US to other jurisdictions, as market participants await a definitive decision on ETF listings and exchanges lawsuits.

As a digital asset business, Fineqia focuses on investing in early and growth stage technology companies that will shape the future of the internet. It also provides a platform for issuance and management of debt securities in the UK. With offices in Vancouver and London, Fineqia is publicly listed in Canada and has a portfolio of investments in tokenization, blockchain technology, NFTs, AI, and fintech companies.

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