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The largest federal bank in Germany, Landesbank Baden-Wurttemberg, is planning to offer cryptocurrency custody services in the second half of 2024, according to a new report.
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Says Jürgen Harengel, managing director of corporate banking at Landesbank Baden-Württemberg,
“The demand from our corporate customers for digital assets is increasing.”
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Meanwhile, Deutsche Bank and DZ Bank, Germany’s second-largest bank, are also preparing for crypto services as Europe’s Markets in Crypto-Assets (MiCA) regulation takes full effect in December 2024. ...
Bitcoin ETF provider Grayscale has provided some details of its spin-off fund, the Bitcoin Mini Trust (BTC), including a more competitive 0.15% fee than the uplisted mothership GBTC product, according to a pro forma financials in its latest filing.
The filing also provides an illustrative example of the amount of Bitcoin (BTC) Grayscale will contribute to the mini fund: 63,204 bitcoin, or 10% of existing assets in GBTC, as per the filing. Shares of the BTC trust are to be issued and distributed automatically to holders of GBTC shares. (Pro forma financial statements are projections of future expenses and revenues, based on a company's past experience and future plans.)
Grayscale’s Bitcoin Mini Trust was conceived to offer GBTC investors a lower fee option that’s more competitively in line with other bitcoin ETFs approved back in January.
This spinoff is also considered a non-taxable event for GBTC’s existing shareholders, so those investors will not be expected to pay capital-gains tax to automatically transfer into the new fund. Some early stage GBTC investors with gains in the thousands of percentages would face a significant taxable event to switch to a competitor product with a lower fee.
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... The rule that calls for the new 1099-DA isn't finished, yet, but the U.S. tax agency has shared what the form might look like to report brokered sales of digital assets. ...
The first wave of spot Bitcoin and Ether exchange-traded funds (ETFs) have been officially approved to start trading in Hong Kong on April 30.
Hong Kong’s financial regulator, the Securities and Futures Commission (SFC), announced the official approval of the first batch of spot Bitcoin (BTC) and Ether (ETH) ETFs on April 24, according to a press release shared with Cointelegraph.
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Unlike the cash-creation model of the United States spot Bitcoin ETFs, Hong Kong aims to offer in-kind creation models for ETFs that enable the creation of new ETF shares by using BTC and ETH.
Hong Kong’s in-kind ETF creation model could be a significant opportunity to considerably increase assets under management (AUM) and trading volume for these products, according to a research note by Bloomberg ETF analyst Rebecca Sin, shared in a March 26 X post by Eric Balchunas:
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Morgan Stanley has been positive about Bitcoin since the approval of Bitcoin ETFs, and the bank opened up Bitcoin ETF purchases to its clients shortly after their launch. However, until now, these purchases have only been available on an unsolicited basis, meaning that brokers could not actively pitch the products to their clients.
The potential change in policy would enable Morgan Stanley brokers to recommend Bitcoin ETFs to their customers proactively.
A Morgan Stanley executive, as reported by AdvisorHub, stated, "We're going to make sure that we're very careful about it...we are going to make sure everybody has access to it. We just want to do it in a controlled way."
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The Depository Trust & Clearing Corporation (DTCC), which handles the settlement of most securities transactions in the United States, has announced changes to collateral valuation that will be implemented starting April 30, 2024. DTCC has made it clear that it will not provide collateral or extend loans for exchange-traded funds (ETFs) that involve Bitcoin or other cryptocurrencies.
The introduction of spot Bitcoin ETFs has sparked increased attention from institutional investors in this investment product. In just three months since their launch, the U.S. Bitcoin ETFs have accumulated an impressive $12.5 billion in assets under management (AUM).
Despite that, DTCC has announced that starting April 30, 2024, there will be changes to collateral values for certain securities during the annual line-of-credit facility renewal. These changes may have an impact on position values in the Collateral Monitor.
This notice, released on April 26, implies that exchange-traded funds and similar investment instruments that have Bitcoin or other cryptocurrencies as underlying assets will no longer have any collateral value assigned to them. As a result, their collateral value will be reduced by 100%.
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However, according to a post by crypto market analyst K.O. Kryptowaluty, it was clarified that this would only be applicable to inter-entity settlement within the Line of Credit (LOC) system.
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As per Kryptowaluty, the use of crypto ETFs for lending and as collateral in brokerage activities will remain unaffected, subject to the risk tolerance of individual brokers. The analysts entreated crypto investors to “tl;dr: Ignore the baseless panic; there’s nothing substantial happening.”
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The effects of the decision on the crypto market
The news has had a tad negative effect on the crypto market, especially Bitcoin. All weekend negative sentiment considered, Bitcoin is currently worth $62,978.86, a 2.2% slip in the last 24 hours.
In addition, the global crypto market cap sits at $2.44 Trillion, a 1.9% drop in the last 24 hours. ...
K.O. Kryptowaluty said:The DTC system, or Depository Trust Company, is a key component of the financial infrastructure of the United States, acting as the central securities depository. DTC is part of a larger organization called the Depository Trust & Clearing Corporation (DTCC)
what you write applies only to inter-entity settlements in the loc system
In the context of financial transaction settlements, it is important to distinguish between different settlement methods such as Delivery versus Payment (DvP) and Line of Credit (LOC).
DvP is a standard settlement mechanism used in most securities transactions, ensuring that the delivery of securities occurs only when the corresponding payment (cash or other asset) is made.
A Line of Credit is a financial facility that allows market participants to draw on borrowed funds for short-term transaction financing or to cover other liquidity needs.
The use of cryptocurrency ETFs for lending and as collateral in brokerage operations remains unchanged and continues to rely on the risk appetite of individual brokers.
tl;dr: Ignore the baseless panic; there’s nothing substantial happening.
Hong Kong’s bitcoin (BTC) and ether (ETH) ETFs failed to lift off on their trading debut in Hong Kong, coming dramatically under initial expectations.
The six listed crypto ETFs pushed $11 million in volume, with bitcoin ETFs posting $8.5 million in volume and ether ETFs coming in at $2.5 million. Issuers expected the initial volume to be over $100 million, according to local media reports.
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