Hello, Asia. Here is what is news on the markets:
Welcome to the morning briefing in Asia, a daily summary of the best stories during the hours and an overview of market movements and analyzes. For a detailed overview of the American markets, see the Americas of the Coindesk Crypto Daybook.
On Wednesday in the United States, the Securities and Exchange Commission announced that investors are now authorized to make redemptions in kind for the Bitcoin and Ether Exchangers (ETF) funds.
The decision allows institutional traders to create and exchange ETF actions directly in BTC or ETH, improving efficiency by avoiding Fiat conversions.
But in Hong Kong, it’s not again. At the end of 2023, at the start of the regulatory process to bring FNB Crypto to the market (they were launched in April 2024), the Securities and Futures Commission – The city’s market regulator – mentioned in a circular that the redemptions in kind would be authorized.
Part of the reason they were authorized were technical: ETF transmitters had to associate with approved local cryptography and use solutions. This was not the case in Ontario, Canada, who first had the Crypto ETF, nor in the United States in Hong Kong, there was not the same debate on the status of ether as a security that there was in the United States
On the other hand, American regulators have fought with concerns about custody, anti-whiteness risks and potential market manipulation.
Although the SEC has never explicitly prohibited redemptions in kind, the ETF sponsors had to remove them from early deposits. The Commission has favored an approach only in cash as a prudent first step, invoking non -tested operational processes and uncertainty about how to securely paying large transfers of cryptography.
This position was not without internal perspective. SEC Commissioner Mark Uyeda publicly criticized the agency’s approach during the January 2024 approval of ETF Bitcoin Spot.
He stressed that ETF based on raw materials, such as those supported by gold, regularly use redemptions in kind and wondered why Crypto was treated differently.
Uyeda argued that the SEC did not explain why it considered the redemptions in “non-novel”, despite the clear difference compared to the practice of standard ETFs, and warned that the lack of reasoning has created a disturbing precedent.
The episode underlines how the Hong Kong regulator moved with greater clarity and cohesion from the start when it put these products on the market.
By allowing a redemption in kind from the start and associating them with license and strict guard requirements, the SFC avoided internal contradictions and the drift of policies that have defined American deployment.
However, there will be a side effect of all of this: tracking flows.
The Crypto Sosovalue Crypto data aggregator, which provides daily flow updates for Crypto ETF, warns that “physical bitcoin subscriptions do not generate cash flow dishes for the [ETFs]They cannot therefore simply be counted in daily statistics of net entries. “”
They have tried to create methods and models to get around this, but say they have failed so far.
So, unless ETF issuers in the United States publish the daily flow in cash and crypto, monitoring this metric will be a problem. And it is important to follow, because it shows the feeling of investors for the asset class.
Market movements
BTC: Bitcoin is negotiated above $ 117,500 after a modest rebound, but the momentum remains low because the FNB outputs persist, the whales take advantage of almost $ 118,000, and the opposite winds of macro, including a firm dollar and expectations of Fed Hawkish, continue to limit the rise.
ETH: ETH is negotiated above $ 3,700. “Ethereum has proven to be in parallel with BTC because its creation is the second most tested network in combat, and the very likely institutions now consider Ether the token as a formidable asymmetrical bet alongside Bitcoin,” said March Zheng, general partner of Bizantin Capital, in a Coindesk note.
Gold: Gold rebounded at $ 3,334 on Tuesday, breaking a sequence of four days before the Fed meeting, while traders assessed in regular rates despite low job data in the United States
Nikkei 225: The markets in Asia-Pacific opened mixed while the US Secretary of Commerce Howard Lunick confirmed that Trump’s delicious deadline of Trump will take place as planned, with Nikkei 225 in Japan at Open.
S&P 500: American shares closed lower Tuesday, the S&P 500 ending a record sequence of six days, while investors have weighed on the profits, economic data and the next Fed rate decision.
Elsewhere in crypto:
- The Tornado Cash Roman Storm developer will not take the position, say the lawyers (Coindesk)
- Cornell Tech professor warns AI agents and crypto spell problems (Bloomberg)
- Senator Lummis presents the bill requiring that Fannie Mae and Freddie Mac consider the crypto as an asset for mortgages (the block)
