Bloomberg Crypto 05/28/2024

Summary

The Bloomberg Crypto segment discusses recent developments in the cryptocurrency market, highlighting the SEC's approval for the launch of Ethereum ETFs in the U.S. and the London Stock Exchange's introduction of Bitcoin and Ether exchange-traded notes. Ophelia Snyder from 21 Shares shares insights on the global momentum for crypto as an asset class, while Catherine Dowling from Bitwise provides an update on regulatory conversations and the political climate's impact on crypto regulations. The show also touches on the House's passage of a digital asset infrastructure bill and its uncertain future in the Senate.

Takeaways

• 🌐 Bloomberg World is temporarily operating from New York while undergoing changes elsewhere.
• 🔑 The U.S. Securities and Exchange Commission (SEC) has paved the way for the potential launch of Ether ETFs, marking a significant shift from its previous stance.
• 📈 Ether experienced a surge of about 3% following the SEC's decision and had its best week in over three years, jumping approximately 25%.
• 💼 The London Stock Exchange introduced stock exchange notes related to Bitcoin and Ether, available only for professional investors.
• 🤔 The timeline for the full approval and listing of Ether ETFs in the U.S. remains uncertain, as the SEC has no set deadline for the next steps.
• 🏛️ The U.S. House of Representatives passed a bill establishing a crypto regulatory framework, although its prospects in the Senate are considered slim.
• 💡 The crypto industry has been growing its influence in Washington, with lobbying efforts becoming more professional and organized.
• 🔍 The Biden administration's stance on crypto has softened, with indications of a willingness to work with the crypto industry, unlike previous threats of veto.
• 🔑 The Republican party has historically been more crypto-friendly, advocating for keeping crypto businesses onshore for economic and national security reasons.
• 📊 Ether has seen significant volatility and growth this year, nearing 70%, but has not yet surpassed its 2021 highs.
• 🐕 The Doge meme, which was once the face of a cryptocurrency worth nearly $90 billion at its peak, has reportedly passed away.

Q & A

What is the significance of the SEC's recent actions for Ether?

The SEC's recent actions have paved the way for the eventual launch of investing directly in Ether through ETFs, marking a significant shift in the regulatory landscape for cryptocurrencies.

How did the SEC's stance on Ether differ from a couple of weeks ago?

A couple of weeks ago, the SEC's stance on Ether was less clear and seemed less favorable towards its approval. However, recent actions by the SEC have shown an about-face, indicating a more open approach to Ether investment products.

Which companies are among the approved issuers for the Bitcoin and Ether debut?

The Wisdom Tree and Invesco are among the approved issuers for the Bitcoin and Ether debut, with 21 Shares also being mentioned as a key player in the development of U.S. Ether ETFs.

What is the current status of Ether's price following the SEC's actions?

Ether's price has surged, with an increase of about 3%, following the SEC's actions that signified a move towards approving products tied to Ether.

What is the situation with Bitcoin's price movement mentioned in the script?

Bitcoin's price is noted to have moved 2% on the day, influenced by news related to the Mt. Gox exchange, which was once the largest Bitcoin exchange and is now involved in efforts to return $9 billion of Bitcoin to creditors.

What was the impact of the SEC's actions on Ether's weekly performance?

The SEC's actions last week resulted in Ether having its best week in more than three years, with a jump of about 25%, marking the best performance since 2021.

What is the difference in implied volatility between Bitcoin and Ether?

The implied volatility of Ether is significantly higher than that of Bitcoin, indicating that Ether is expected to have much bigger swings in the coming months compared to Bitcoin.

How has Ether performed year-to-date compared to Bitcoin?

Year-to-date, Ether has outperformed Bitcoin, with Ether being close to a 70% increase, while Bitcoin made new records earlier in the year but has not surpassed its 2021 highs.

What is the London Stock Exchange's recent move related to Bitcoin and Ether?

The London Stock Exchange has issued a batch of stock exchange notes related to Bitcoin and Ether, which are available only for professional investors.

What is the regulatory process for Ether ETFs according to the SEC?

For Ether ETFs to begin trading on exchanges, the SEC must sign off on two separate filings: the 19b-4 forms and the S1, which is a prospectus filing containing all information about the fund and risk disclosures.

What is the difference in the approval process between Bitcoin ETFs and the current Ether ETFs?

With Bitcoin ETFs, regulators signed off on both required forms at the same time, allowing the funds to start trading immediately after approval. However, for Ether ETFs, the SEC's approval of the 19b-4 forms is necessary but not sufficient, and the S1 must also be approved without a set deadline.

What is the potential impact of the U.S. presidential election on the regulatory environment for cryptocurrencies?

The U.S. presidential election could influence the regulatory environment for cryptocurrencies, as both candidates may take stances that could either support or hinder the growth and acceptance of cryptocurrencies, depending on their policies and voter appeal.

What is the current status of the bill establishing a crypto regulatory framework?

The bill has passed in the House with bipartisan support but faces tough odds in the Senate and opposition from the White House, which argues that the bill is too friendly to the industry.

What is the role of crypto lobbying in Washington and how has it evolved?

Crypto lobbying in Washington has become more professionalized, with in-house lobbyists and trade associations advocating for the industry in a more formalized manner. The influence of crypto voters, who consider cryptocurrency an important factor in their voting decisions, has also contributed to increased support in Congress.