- Police Reportedly Raid Headquarters Of Bithumb, The Largest Exchange In South Korea.
- Stock Exchanges In Vienna And Singapore Embrace Bitcoin And Ethereum.
- Bitcoin Experiences Brief Crash Below $10,000, Triggering Concerns Of Global Sell-off.
We start off this edition of Overbit’s Round Up by taking a look towards South Korea, where authorities have reportedly raided Bithumb - one of the country’s largest cryptocurrency exchanges by volume.
On Wednesday, The Seoul Newspaper reported that agents from the Intelligent Crime Investigation Unit had stormed Bithumb’s headquarters. According to reports, the action was taken by the police due to a token sale that never materialised. This token sale was worth over $25 million, and many outlets are reporting that some investors have lost millions participating.
It seems that South Korea is cracking down on any illicit cryptocurrency activity, as last week the authorities raided Coinbit as well, an exchange accused of wash-trading and faking volume. At the time of press, Bithumb is still active, but only time can tell where this activity and potential investigation are heading.
In more positive news for cryptocurrency markets, we look to Vienna, where the Vienna Stock Exchange (“Wiener Börse”) has become the third, officially regulated market to list a Bitcoin-based financial product. To be more specific, the stock exchange listed two Exchange-Traded Products (ETPs) which are offered by 21 Shares AG, a Swiss-based cryptocurrency brokerage platform.
According to Thomas Rainer, Wiener Börse’s head of development, these new offerings will allow “experienced, local investors” to access the benefits of a stock market to cryptocurrency investors such as “monitored, regulated, and transparent trading with real-time information and secure settlement via their regular brokers.”
This adoption seems to be a recurring trend, as 21Shares’ Ethereum and Bitcoin ETPs were also listed in July on the Deutsche Boerse’s XETRA reference market. XETRA reference market is a significant milestone, as it hosts more than 90% of German share trades and roughly 30% of European ETF trading.
This growing trend of institutional adoption can be seen in Asia as well, as the SGX (The Singapore Exchange) recently announced it would list price indexes for Bitcoin and Ethereum in partnership with U.K.-based crypto data firm CryptoCompare, and is listing both the iEdge Bitcoin Index and the iEdge Ethereum Index, which tracks the prices of the cryptocurrencies.
These listings will allow for institutional investors to more easily gain exposure to the Cryptocurrency market. However, even with these new listings, financial regulators in Singapore (the Monetary Authority of Singapore) are still sorting out ways to regulate the burgeoning industry properly.
To close out this edition of Overbit.com’s Weekly Round up, we’ll cover Bitcoin’s flash crash on Thursday, seeing the BTC/USD price crashing over 7%, wicking down under $10,000 briefly, and recovering to $10,200 at the time of writing. The sell-off on Bitcoin, caused a massive Ethereum sell-off as well, sending ETH/USD under $400. This sell-off continued across the entire cryptocurrency market, as top projects in the Ethereum DeFi, suffered drawdowns of over 50% on some of the yield farming projects.
The reason for BTC/USD’s sell-off is hard to pinpoint, but according to some common themes in the industry, the sell-off could be attributed to 3 trigger events. One, Bitcoin’s sell-off could be attributed to the traditional equities market sell-off, which happened in sync as well in the earlier part of the year. Two, we could attribute it to the unwinding and exploitation of explosively lucrative DeFi yields, of projects like Yearn Finance, and clones such as HotDog and Kimchi, which have recently had their “rug pulled”. Lastly, it can be attributed to Miners selling large positions from their mining wallets, or even the fabled CME gap, where contracts “jump” to close the gap.
In all reality, the cause isn’t as important as the effect, and the result was a cascading of sell-offs across all projects in the Crypto space, leading to some massive bearish sentiment across the ecosystem. How short-lived this bearish sentiment will last is hard to say, but we need to see BTC/USD close the monthly above $10,000 to remain neutral, and a monthly close below that would signal a bearish sentiment for the coming months. In a market like this, it’s probably best to “wait and see” and even probably better said by Lao Tzu “Muddy water, let stand, become clear”.
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