Bitcoin rebounds amidst undercurrents in the market

If the stock market is a barometer of a country's economy, then Bitcoin is the weathervane of the global crypto market. Its every move may hint at the future direction and trend of the global crypto market.

Bitcoin has experienced a small rebound today, which was accompanied by key events such as US regulation, Binance being suppressed by the SEC, and traditional financial giants on Wall Street rushing to enter the market. Therefore, compared with previous rebounds, this rebound conveys a very interesting message to the outside world.

On June 16, the iShares division of the U.S. fund management giant BlackRock submitted documents to the U.S. SEC to apply for a spot Bitcoin ETF. According to the document, the fund's assets will be named iShares Bitcoin Trust, and the fund's assets will mainly consist of Bitcoin held by the custodian on behalf of the trust.

Morgan Creek Digital co-founder Anthony Pompliano later said that BlackRock did not apply for a Bitcoin ETF, but a Bitcoin trust. These products are only technically different, especially in terms of regulation and approval, but the final results for investors are similar. Pompliano also said that if the product is approved for issuance, GBTC may be forced to introduce daily redemptions and cut fees to compete with it. Many Wall Street companies may launch fast-following products to compete with BlackRock.

On June 20, digital asset trading platform EDX announced its official launch and opening of trading. EDX is supported by companies such as Charles Schwab, Citadel Securities, Fidelity Investments, Paradigm, Sequoia Capital and Virtu Financial, and aims to achieve safe and compliant digital asset trading through trusted intermediaries.

According to reports, EDX is a non-custodial trading platform for institutional clients. It does not directly handle client assets, but provides clients with a trading market for crypto assets and US dollars. Products traded on EDX include $BTC, $ETH, $LTC and $BCH.

We can roughly summarize a few key words from EDX: originating from the United States, compliance, financial giant, not for retail investors, and not custodial assets. It can also be said that the financial forces on Wall Street in the United States have launched their own crypto exchange. In the future, American institutions can trade crypto assets on their own compliant exchanges. In fact, in the last cycle narrative, FTX, an exchange endorsed by mainstream American institutions, went bankrupt due to its own poor management and suppression by competitors, causing serious damage to most institutional assets. The reason is that there is no effective and mature compliance regulatory framework to supervise FTX's control over self-custodial assets. EDX effectively avoids the above two shortcomings: compliance and asset custody.

Jez Mohideen, CEO of Laser Digital, a Web3 venture capital firm under Nomura Securities, believes that the regulatory debate surrounding cryptocurrencies will play a key role in determining the future trajectory of institutional adoption of cryptocurrencies.

Therefore, in the next round of mainstream crypto narratives, mainstream financial institutions in the United States will participate more as protagonists in this important technology-driven wealth creation movement in history. It is reasonable for EDX to create its own world. The difference is that in addition to traditional financial institutions such as Wal-Mart, another layer of protection, "compliance," has been added to protect the crypto industry this time.

So returning to the topic of SEC regulatory compliance, we can understand it this way. Before the SEC hit Binance hard, Wall Street financial forces may have been fully prepared to launch compliant crypto transactions. The main role of the SEC chairman in this strict regulation of crypto may not be the righteous, impartial crypto scholar understood by the outside world, nor is it the crypto-unfriendly regulator who is unworthy of the position, has little power but a heavy responsibility as the outside world says.

You know, in 1979, Gensler joined Goldman Sachs and became one of the youngest partners of the company at the age of 30. From 2009 to 2014, Gensler served as the 11th Chairman of the U.S. CFTC.

At the MIT Technology Review forum in April 2018, Gensler said that blockchain technology is good for the entire financial industry. However, cryptocurrencies, exchanges, and related token issuance and fundraising activities (ICOs) based on this technology are still not governed by the law, and there are no existing laws and regulations to regulate this industry.

On the contrary, Gensler, who is of Jewish origin, is a crypto pioneer who represents the financial power of Wall Street. From this perspective, this may not be a coincidence but a deliberate arrangement. At the same time, the harsh supervision faced by Binance will not be a simple heavy fine, but also fierce competition from the financial power of Wall Street.

Earlier on the same day, June 20, Deutsche Bank has applied for a regulatory license to provide custody services for digital assets such as cryptocurrencies. David Lynne, head of the bank's commercial banking department, said that we are building our own digital asset and custody business, and we have just submitted an application for a digital asset license to the German Federal Financial Supervisory Authority (BaFin).

EDX is non-custodial, while Deutsche Bank provides custodial services. In my opinion, nothing in the world is a coincidence.

When we look back at the landmark events that have occurred in the crypto industry over the past six months, on the surface, it is nothing more than the new crypto policy in Hong Kong and crypto regulation in the United States. Hong Kong, China, is actively opening its arms to embrace crypto companies, while Washington, the United States, is intensively punching crypto companies. One in the East, one in the West, one welcomes, one expels, but their final outcome may be the same, both of them are adding fuel to the development of their own crypto industry interests. The difference is that when Hong Kong began to embrace crypto companies, it laid out the development of corporate norms and regulatory frameworks in advance, while the United States did not have clear development norms and regulatory frameworks when it began to embrace crypto companies. Afterwards, it realized the importance of regulation to the crypto industry and began to gradually standardize and formulate regulatory policies. Launching its own crypto exchange.

The future development and evolution of the crypto industry may exceed all of our expectations.