The Crypto Industry Sees Increased Institutional Adoption
During this week, the crypto industry observed a consistent increase in institutional adoption. Prominent entities such as HSBC, MicroStrategy, and Hang Seng garnered attention through notable advancements. Concurrently, the spotlight was on FTX, with the new management impressively recuperating a substantial $7 billion, instilling optimism for creditor reimbursement and fortifying prospects for a relaunch.
HSBC and MicroStrategy Dive Deeper
Against the backdrop of escalating interest in investment products centered around cryptocurrencies among private institutions, HSBC, the largest bank in Hong Kong, made a notable entrance into this domain during the past week. In a momentous development, HSBC introduced a novel service that empowers its clients to engage in trading activities involving exchange-traded funds (ETFs) linked to bitcoin and ethereum. This groundbreaking initiative marks the first instance of a bank in the city extending such an offering.
Shortly after the HSBC news, reports revealed that MicroStrategy had augmented its bitcoin holdings, demonstrating a commitment to increasing its presence in the digital currency market. As disclosed in a filing submitted to the Securities and Exchange Commission (SEC), MicroStrategy, under the leadership of Michael Saylor, acquired an additional 12,333 bitcoins between April 29 and June 27.
Hang Seng Seeks to Partake as Adoption Skyrockets
Reports from June 29 revealed that Hang Seng Investment Management Co., a prominent asset management firm in Hong Kong, is currently evaluating the potential of entering the cryptocurrency space. This strategic consideration follows the recent launch of bitcoin and ethereum ETFs by HSBC on June 26. The bank’s pioneering introduction of these ETFs has brought cryptocurrencies closer to the region, prompting Hang Seng Investment Management to explore their integration into its existing investment products.
Meanwhile, Mastercard unveiled its Multi-Token Network (MTN) platform this week, with the objective of improving compatibility among diverse blockchain systems. The primary objective of MTN is to facilitate secure and scalable transactions across various digital assets and blockchains.
A Marked Uptick in Adoption
As these large corporations delve deeper into the crypto ecosystem, studies emerging this week reflect the marked uptick in adoption rate. A survey carried out by Binance shed light on the confidence of institutional investors in the cryptocurrency market, particularly their long-term perspective. According to the survey, 63.5% of institutional clients hold an optimistic view of the crypto market in the coming year, while 88.0% express positivity for the next decade.
According to a separate study conducted by Coinbase, a significant majority of Fortune 500 companies in the United States have recognized the potential of crypto, blockchain, and web3 technologies. The study reveals that more than 50% of Fortune 100 companies have actively embraced these technologies as part of their modernization efforts and to stay relevant on a global scale.
An Influx in Institutional Capital
CoinShares, a leading digital asset manager, disclosed a surge in institutional capital flowing into the crypto markets. This indicates a renewal of favorable sentiments by institutional investors, as highlighted in CoinShares’ Digital Asset Fund Flows Weekly Report. The report also mentions that the week witnessed the highest inflows since July 2022, totaling $199 million.
Despite the prevailing bearish market conditions and regulatory uncertainties, prominent fintech companies such as Microstrategy, Tesla, Block (formerly Square), and Galaxy Digital Holding have amassed substantial amounts of BTC. The growing adoption of bitcoin by institutions not only benefits the companies directly involved but also has the potential to have a positive impact on their clients and the overall market.
FTX Recovers $7 Billion, Seeks to Relaunch
FTX garnered significant attention this week as the new management successfully recovered a substantial portion of the outstanding debts owed to creditors and announced further plans for the relaunch of FTX.com, the ecosystem’s international exchange platform. Under the guidance of its new CEO John J. Ray, FTX achieved remarkable strides in repaying its creditors, recovering a substantial $7 billion out of the initial $8.7 billion debt.
Furthermore, the new management acknowledged past practices involving the mingling of client funds and providing misleading information to banks regarding fund mingling. This disclosure shed light on the factors that contributed to the company’s previous downfall. Shortly after this, CEO John Ray III confirmed that FTX is actively engaged in efforts to revive its primary international cryptocurrency exchange, FTX.com.
Bankman-Fried Faces Legal Setback
Despite the gradual shift into positive territories for FTX, former boss Sam Bankman-Fried faced some setbacks this week. A federal judge rejected the motions presented by Bankman-Fried’s legal team to dismiss most of the criminal charges against him, leaving only three. As a result of the dismissal, Bankman-Fried will face all 13 criminal counts in two separate trials scheduled for October 2023 and March 2024.
The Fed Warns of Risks Associated with Crypto
The US regulatory landscape also took center stage this week, with significant developments involving the SEC and other agencies. Speaking at the Salzburg Global Seminar on banking regulation and oversight, Governor Michelle Bowman of the Federal Reserve System voiced her apprehensions regarding regulatory gaps in the oversight of digital assets and their potential impact on financial institutions.
Bowman stressed the importance of international regulators paying closer attention to tackle the regulatory hurdles presented by emerging technologies in the banking industry. She underscored the uncertainty surrounding the operations of digital assets and cautioned against banks relying on non-binding statements issued by officials.
IRS Requests User Data from Kraken
As regulatory efforts intensified, this week, Kraken received a court order from the Internal Revenue Service (IRS) requiring the submission of customer data, including account details and transaction information. The order, issued on June 30, specifically targets Kraken users who have traded at least $20,000 worth of cryptocurrency between 2016 and 2020.
This Article Crypto Industry Sees Surge in Institutional Adoption as HSBC, MicroStrategy, and Hang Seng Make Notable Moves was first Published on World Weekly News
