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Crypto SWOT: a third bitcoin futures ETF entered the market this week

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was GenshinShibInu (GSHIB), rising 79,307.70%.

  • JPMorgan Chase and Tiger Global announced investments in blockchain-infrastructure company Blockdaemon Inc., reports Bloomberg, as traditional financial institutions seek a foothold in the burgeoning area of decentralized finance. Blockdaemon already counts Softbank Group and Goldman Sachs Group among existing backers and in September had a value of $1.25 billion, the article continues.

  • Almost one-third of North American-based investment offices for ultra-wealthy families are invested in cryptocurrencies. This number compares with 28% of family offices in Europe and 19% in the Asia-Pacific region, according to research published from Campden Wealth and reported by Bloomberg.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Elonomics (ELONOM), down 99.28%.

  • In an interview hedge fund manager Kyle Bass, he stated that "from here on out, it's going to be very difficult to make money on Bitcoin due to intense regulation." Bass sees tighter rules coming in 2022 from the U.S government, following China's crackdowns this year.

  • According to Mike McGlone, a Bloomberg Intelligence analyst, "Some cleansing of meme coins might pressure the stalwarts as a necessary part of the evolving ecosystem. The sooner the better for the speculation machine coins to experience some purging, so as to move on with the adoption process of crypto assets in investment portfolios."

Opportunities

  • A third Bitcoin futures ETF in the U.S. has just entered the market, reports Bloomberg. VanEck announced that its bitcoin-linked ETF (ticker XBTF) went live on Tuesday, roughly one month after the ProShares Bitcoin Strategy Fund. This comes as the SEC rejected its "physically" backed offering last week, writes Bitcoin Magazine.

  • According to a report from CNBC TV India, the nation's government plans to reclassify cryptocurrency exchanges as "e-commerce" platforms, which will reduce the Goods and Services Taxes users pay per transaction from 18% to 1%, writes CoinTelegraph.

  • Cathie Wood of Ark Invest says institutional buys make the bull case for Bitcoin reaching $500,000 by 2026, writes Bloomberg. During an interview with Barron's Ark stated that if "institutional investors move into Bitcoin and allocate 5% of their portfolios, the value of Bitcoin would rise to around $560,000 by 2026."

Threats

  • Cryptocurrencies fell on Tuesday, with Bitcoin briefly dipping below $60,000 and Ethereum touching its lowest level this month. The largest digital token dipped as much as 8.2% to $58,661, the biggest intraday drop since September 24. Second-ranked Ether tumbled more than 10%, writes Bloomberg.

  • A bipartisan team of U.S. senators is introducing a bill to narrow some cryptocurrency tax reporting rules. The legislation would address a new tax-reporting requirement for digital currencies included in the infrastructure bill. The law will force cryptocurrency companies to provide information on their users-as- some other financial firms are required to do (in an effort to enforce tax compliance), writes Bloomberg.

  • The IRS seized $3.5 billion worth of cryptocurrencies during fiscal year 2021, which is 93% of the assets seized by tax enforcement during the year. Congress recently granted the IRS more ability to survey cryptocurrency transactions in the infrastructure package President Joe Biden signed into law on Monday.
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