Wall Street is playing the "yellow bird behind the scenes", how will the crypto market develop in the future

Why are Wall Street giants flocking to the crypto market when the US SEC is cracking down on the crypto market? The Hong Kong government's new crypto policy is not just talk, and the crypto financial center has begun to move eastward. Does the United States really want to kill crypto finance? Who will be the important symbol and promoter of the next bull market? This article will explore these issues.

Wall Street is playing out the "mantis stalks the cicada, unaware of the oriole behind"

Under the SEC's thundering action, when the crypto market was still immersed in panic, Wall Street entered the market in a big way, once again staging the drama of "others are panicking and I am greedy".

According to Bitpush, on June 15, asset management giant BlackRock submitted an application for a Bitcoin ETF to the SEC; on June 19, Arch Public co-founder Andrew Parish revealed that Fidelity, the world's third largest asset management company, is suspected of considering acquiring Grayscale or applying for a Bitcoin spot ETF; on June 20, EDX Markets, a new cryptocurrency exchange supported by Citadel Securities, Fidelity Investments and Charles Schwab, announced its launch; on June 22, Bloomberg senior ETF analyst Eric Balchunas tweeted that asset management giant Invesco also resubmitted its spot Bitcoin application; on June 23, the SEC approved Volatility Shares' 2x Bitcoin Strategy ETF (BITX) to take effect, becoming the first leveraged cryptocurrency ETF in the United States.

It is worth noting that many people in the market think that the Bitcoin ETF applied by BlackRock is like a trust product because it does not have the daily redemption mechanism of an ETF. It will add and redeem from the trust in the form of 40,000 bitcoins per basket, which will cause it to have similar net asset value premium and discount problems as the Grayscale Bitcoin Trust Fund. However, the ETF applied by BlackRock is more like GLD and many well-known ETF funds managed by iShares under BlackRock. Compared with trust funds such as GBTC issued by Grayscale, it is more flexible and can be redeemed. The market predicts that BlackRock will not do anything unprepared, and the design of this alternative ETF is indeed more likely to be passed. If the ETF applied by BlackRock is passed, it means that the crypto market is one step closer to the Bitcoin spot ETF, which is almost a layer of window paper.

In addition to continuing to work on Bitcoin ETF, a traditional financial instrument, Wall Street has also set its sights on the territory of the traditional crypto market. According to Bitpush, on June 20, EDX Markets, supported by Citadel Securities, Fidelity Investments and Charles Schwab, officially announced the launch of its digital asset market and completed a new round of financing, with Miami International Holdings, DV Crypto, GTS, GSR Markets LTD and HRT Technology participating. Among them, Citadel Securities handles about 26% of US stock trading volume and executes about 47% of all US stock retail trading volume. The company also handles 99% of the trading volume of 3,000 US-listed options. At the critical moment when the SEC is suing Binance and Coinbase, especially when a large number of users in Binance US withdraw their money and leave, EDX Markets debuts under the star-studded support of a number of Wall Street giants, and naturally becomes the first choice for many native crypto users. This means that the users that Binance and other crypto exchanges have worked hard to accumulate over the years are most likely to be used to help others. The operation of the Wall Street giant also feels a bit like "the mantis stalks the cicada, unaware of the oriole behind."

The Hong Kong government is taking over the US crypto-financial industry.

When the US SEC was strongly suppressing the crypto market, Hong Kong, the Pearl of the Orient, embraced the crypto market; when US banks prohibited opening bank accounts for crypto exchanges, Hong Kong was making every effort to promote local banks to accept crypto customers. The trend of crypto finance's transfer from the East to the West is becoming more and more obvious. Overall, this is also the reason why the crypto market's concerns about the SEC are rapidly decreasing, which has also become the main macro reason for stimulating the recovery of the crypto market.

The Hong Kong government has made crypto-financial matters a priority and intends to lead the trend. According to Bitpush, on June 23, Hong Kong Financial Secretary Paul Chan said in an exclusive interview with Ta Kung Pao that how to bring virtual asset service providers under appropriate regulation, protect the interests of investors, and maintain financial stability and security is the focus of the SAR government. Gemini co-founder said on June 23 that he had met with the Hong Kong Securities and Futures Commission and that Hong Kong is ready to lead the trend in the field of cryptocurrency.

More and more crypto exchanges are moving to Hong Kong. According to BitPush, on June 21, Lin, head of Deribit's Asia-Pacific region, tweeted that Standard Chartered Bank has successfully opened an account for an exchange in Hong Kong, and can directly conduct customer deposits and withdrawals and transaction settlements in the bank. On June 26, HSBC, Hong Kong's largest bank, allowed its customers to buy and sell virtual asset ETFs listed on the Hong Kong Stock Exchange today. It is also the first bank in Hong Kong to allow customers to buy and sell virtual asset ETFs listed on the Hong Kong Stock Exchange. Circle, the US stablecoin issuer, is also paying attention to Hong Kong. Jeremy Allaire, co-founder and CEO of Circle, said: "Hong Kong is clearly seeking to establish itself as a very important digital asset market and stablecoin center. We are paying close attention to this. There is huge demand for US dollar stablecoins in Asia and emerging markets."

Crypto Regulation 2.0 is coming, and the big bonus lies in the entry of institutions

As mentioned above, the overall crypto-financial regulation in Hong Kong is becoming clearer and clearer, and the United States seems to be stepping up its crackdown on the crypto industry; but from a long-term perspective, the US SEC's lawsuit will inevitably help promote the implementation of crypto-financial regulatory policies. Once the US crypto policy is clear, the entry of institutions will inevitably promote a huge bull market.

We previously proposed the following point in the article “How Should Investors Avoid Risks in the Cryptocurrency Storm”: In the medium and long term, the recent lawsuit filed by the US SEC may eventually speed up the US regulatory legislation for the crypto market. In addition to Binance, the US SEC has also filed a lawsuit against Coinbase, a US listed company with a large number of users in the United States. The lawsuit against this exchange may stimulate Congress to take positive action in cryptocurrency regulation. The voices of market parties are getting stronger and stronger. The US legislature has also noticed the seriousness of the situation and has begun to hold hearings one after another, which can also be regarded as providing some preparation for legislation. According to Bitpush, Patrick McHenry, Chairman of the US House Financial Services Committee, announced that a hearing on the theme of "The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem" will be held at 14:00 Eastern Time on June 13 (2:00 Beijing Time on June 14) at 14:00.

In addition, the United Kingdom and the United States belong to the case law system, which focuses on the continuity of the code and uses tradition, precedents and customs as the basis for judgment. As a brand-new industry, the crypto-financial industry has no previous precedents to follow, so the lawsuit between the SEC and Binance and Coinbase will become a very typical case, which is undoubtedly a landmark event for the future clear regulation of the United States. In response to the indictment of the US SEC, the Wall Street giants also responded very quickly. Since the SEC believes that most POS tokens are securities, they will avoid these, so they mainly list PoW tokens such as Bitcoin. On the whole, with the clarification of crypto regulation, institutional investors are likely to become the core force driving the prosperity of crypto finance in the next bull market.

Outlook

Overall, the clarity of crypto market regulation will most likely be determined in the next bull market. At present, both the East and the West are still in an exploratory stage. After all, crypto assets and so on are new things. This must go through a big debate and many positive attempts before it can become law. Only in this way can Bitcoin and other things be accepted by more people, truly integrated into traditional finance, and have a profound impact on crypto finance.