As the global market recovers, there are two new ways to legalize cryptocurrencies.
With the end of the periodic consolidation of cryptocurrency price since May 2021, the interest of institutions in cryptocurrency has increased significantly. As a result, the global cryptocurrency market showed a warming trend at the end of June. On June 30, ZB learned that the global market strategy Department of U.S. banking giant JPMorgan Chase believes that institutional interest in bitcoin will continue to increase. Bitcoin will continue to be an important reference for global cryptocurrency.
ZB Research Institute believes that the dominance of bitcoin suddenly dropped from 61% in April to 40% in a month. The fast-growing copycat coins occupied an excessive market share and led to the bubble of market value. After the consolidation of the market in May, the market bubble improved. According to ZB Research Institute, bitcoin’s share of the global cryptocurrency market began to recover to 48% last week, and rebounded to about 50% this week. At the cost of copycat coins, the current market promotes a large amount of capital flow into bitcoin fund.
Affected by the recovery of global market, as of the morning of June 30, the total market value of cryptocurrency with Grayscale position soared by US $2.659 billion compared with the previous week, with a total market value of US $31.659 billion. Among them, the premium rate of Ethereum trust (ethe) began to be positive after the beginning of June, and the premium rate of bitcoin trust (GBTC) also rebounded. As of press release, the premium rate of GBTC was — 6.94%. Affected by institutions’ renewed investment in cryptocurrency, on June 30, ICAP, Fidelity Group and Standard Chartered Bank are seeking to make cryptocurrency trading similar to the trading of traditional assets such as stocks, bonds and foreign exchange.
The recovery of the market is also reflected in financial derivatives based on cryptocurrency. On June 30, it was reported that Tianqiao capital will launch a private Ethereum fund on July 1. Scaramucci, the founder of Tianqiao capital, disclosed that the fund has some excellent publicly traded assets related to Ethereum, bitcoin and other tokens. Tianqiao capital has previously submitted an application for bitcoin ETF to the US SEC.
In addition, ArkInvest, owned by CathieWood, submitted an application to the US Securities and Exchange Commission for the establishment of a bitcoin ETF to track the performance of bitcoin. If ArkInvest application is approved, the fund will trade under the symbol ARKB.
According to statistics from ZB Research Institute, as of June 30, about 86% of ETH holders were in a profitable State, which indicates that most ETH holders are still in a profitable state despite the recent price adjustment in cryptocurrency market.
In terms of policy, it was reported on June 30 that the ruling Spanish Socialist Party (PSOE) is seeking to create a national digital currency to replace the euro. Russia’s central bank formed a group of 12 banks to test the digital ruble. According to relevant news obtained by the ZB Institute, Francois Villeroy de Galhau, President of the Bank of France, said on Wednesday that if Europe does not advance plans for the digital euro and the European payment system, Europe’s sovereign control of its currency will be at risk.
On June 30, Germany’s new “fund positioning law” (fondstandortgesetz) will come into effect on July 1, 2021. At that time, Special funds in Germany will be allowed to invest 20% of its portfolio in crypto assets such as bitcoin. According to the calculation of relevant institutions, the theoretical inflow potential of cryptocurrency assets is about 35 billion euro, which is one fifth of the 1.87 trillion euro assets (currently tied to about 4000 open-end China special funds).
ZB Research Institute believes that at present, there are two clear routes in the process of global cryptocurrency legalization. One is that small and medium-sized economies represented by El Salvador cannot develop the corresponding digital currency public chain independently due to their own economic strength and technology constraints, so they take the existing mainstream digital currency as their legal tender to combat global inflation and the impact of monetary policy on itself.
The second is that large developed economies, such as Germany and France, are committed to developing CBDC on their own, while cryptocurrency is regulated as commodity and commodity financial derivatives.
ZB Research Institute believes that the global cryptocurrency has been in a critical period of transformation from “niche” to “mass”, and its development process will directly affect the trading market. Before the value of digital assets is really popularized in the world, the global cryptocurrency market will still be in the initial stage of great opportunities.