Greenlight for the 1st Bitcoin ETF ?; Bitcoin Hits ATH ??; Facebook’s digital currency wallet Novi is now live. But it’s not what you expected ??

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Last week (18-22 October) was a really hot and super exciting week in Blockchain & Cryptocurrency space.?We will look at the first Bitcoin ETF going live; Bitcoin hitting an all-time high; Facebook launching Novi, and other interesting news and developments.

Without further ado, let us dive into what has happened in the Blockchain & Crypto sector last week. Let’s connect the dots.

Greenlight for the first Bitcoin ETF ?

The approval ???Jacobi Asset Management has been given approval from the Guernsey Financial Services Commission (GFSC) to launch a centrally-cleared Bitcoin exchange-traded fund (ETF). It is the world’s first tier-one Bitcoin ETF.

According to the official announcement, the fund – Jacobi Bitcoin ETF – will be listed on CBOE Europe, subject to Financial Conduct Authority (FCA) listing approval.

The battle has been won? ???Crypto traders have been bugging the SEC to approve a bitcoin-based ETF since 2013, but regulators have pushed back, citing the coin’s volatility and the crypto industry’s lack of transparency. So getting these ETFs approved (there are actually 4 that could begin trading this month) would be a win for those trying to put crypto in front of institutional investors.

It must be noted that it will be the first crypto futures-based product to list on a U.S. exchange. Though it does not provide a vehicle to directly invest in the bitcoin spot market, it will be the most direct exposure available to investors in the form of an ETF.

?? THE TAKEAWAY

Mainstream, it’s mainstream now.?Although these ETFs aren’t?Bitcoin?ETFs (they’re bitcoin?futures?ETFs which means investors in these ETFs won’t actually own any Bitcoin, and instead will be buying futures contracts that allow them to bet on the direction of Bitcoin’s price), it’s a very strong step towards the won battle that has started almost 10 years ago. The key thing here is that the launch of a Bitcoin ETF should probably increase the cryptocurrency’s legitimacy and make it easier for institutional investors to get exposure. The market seems to support that as BTC is steadily approaching its all-time high and currently trades at close to $62,000 per coin.

Bitcoin Hits All-Time High ??

The record ???Bitcoin, the world’s largest and most popular cryptocurrency by market capitalization, has hit a new all-time high above $66,000, marking a full recovery from a months-long slump and extending the year’s gains to nearly 130%. Not too shabby, right? ??

Since the start of 2021, Bitcoin prices have gained 130% in choppy trading, during which the digital token hit a series of record highs in the first quarter before collapsing to about $28,000 in June. Some of the pullback in the summer was down to fears about more stringent regulation.

New territory ???The digital coin struck a high of $67,016, surpassing its April peak, following the debut on Tuesday of the ProShares Bitcoin Strategy ETF on the New York Stock Exchange.

At the point of writing, Bitcoin is changing hands at around $66,000 per coin.

?? THE TAKEAWAY

The ETF effect.?The current Bitcoin rally is undoubtedly fuelled because of the Bitcoin exchange-traded fund launched on Wall Street for the first time. It gathered a very strong demand showing a booming investor interest in the asset class. One must note that the new fund, traded on the New York Stock Exchange under the ticker BITO, hauled in $570M of assets on its first day and racked up $1B of trading volume, ranking it among the most successful launches of all time. In the coming weeks, several more bitcoin futures-based ETFs may debut in the U.S., opening even more opportunities for savvy U.S. crypto investors.

Cboe goes fully into crypto ??

The scoop ???Cboe Global Markets, aka The Chicago Board Options Exchange, the largest U.S. options exchange, announced it has agreed to acquire?ErisX, a crypto spot and derivatives exchange.

The terms of the acquisition haven't been disclosed. The deal is expected to close in the first half of 2022, subject to regulatory approvals.

Why? ?? ErisX?was founded in 2018 and operates a U.S.-based crypto spot marketplace, a futures exchange, and a clearinghouse. The futures exchange and the clearinghouse are regulated by the CFTC, and the clearinghouse is registered with FinCEN and licensed in several U.S. states and territories.

The turnaround ??♂??It must be noted that the news marks the return of Cboe in the crypto space. In December 2017, Cboe was the first U.S. regulated exchange to launch Bitcoin futures, but in June 2019, it shut the product down. At the time, Cboe said it was assessing its approach for how it plans to continue the crypto business.

?? THE TAKEAWAY

Staying relevant.?This acquisition further illustrates the growing demand for crypto-assets and their exposure. With ErisX, Cboe will be able to enter the digital asset spot, data, derivatives, and clearing ecosystem, and it’s a huge win for a somewhat traditional player like CBOE. It’s funny that ErisX acquisition news comes just a day after the first bitcoin futures ETF started trading in the U.S. from ProShares. But you cannot blame CBOE for following the money ??

Facebook’s digital currency wallet Novi is now live. But it’s not what you expected ??

The launch ???Social media giant?Facebook?has finally launched a long-awaited pilot of its digital currency wallet?Novi?in the US and Guatemala. It has chosen to use the Paxos Dollar stablecoin after its own cryptocurrency Diem failed to get backing from regulators.

Users can hence start trading the Paxos Dollar (USDP). Crypto exchange Coinbase will provide custody services for the program.

The process ???Users can ow download the app on iPhones or Android and register with a government-issued ID.

Once you download the Novi app, you create an account and add money using a payment method, such as a debit card. Whenever you add USD, your money is converted to USDP without any fees. USDP is a stablecoin tied to USD created by?Paxos.

Behind the scenes, USDP is backed by cash and cash equivalents to ensure its value. User funds are?managed?by Coinbase Custody, meaning that Coinbase stores USDP funds for Novi users.

Novi users can then send USDP to other Novi users. Once again, there are no fees involved with money transfers

?? THE TAKEAWAY

Long way to go & many battles to win.?Facebook originally announced Novi alongside Diem in June 2019. At the time, the wallet, then known as Calibra, was intended to support the then-Libra stablecoin before regulatory backlash changed the scope of the project. Although FB had to make compromises, it’s clear that their support for Diem hasn’t changed and they still intend to launch Novi with Diem once it receives regulatory approval and goes live. And that’s actually one of the biggest battles they need to win. Not only do they have to convince regulators that they can manage a payments system (they failed multiple times to do that with their social network) with all the risk and compliance issues. More importantly, they have to convince users that they need that wallet in the first place. Funny thing is that the former might actually be easier than the latter…

Extra Reads & Quick Bites for Curious Minds??

• Crypto for community banks ???US-based?Bakkt?has announced it will make its digital asset marketplace and wallet available through?Finastra’s?open developer platform and app store, FusionFabric.cloud. By adding Bakkt’s crypto platform to Finastra’s app, crypto will expand further into the mainstream as financial institutions offer their account holders access to the growing asset class without having to leave their existing trusted banking environment.?They are just following the money???????
• Another fine ???The Commodity Futures Trading Commission (CFTC) simultaneously filed and settled charges against Tether and Bitfinex, ordering the sister companies to pay fines totaling $42.5M. The CFTC's announcement said Tether made "untrue or misleading statements and omission of material fact" related to its stablecoin, USDT. Tether falsely claimed that USDT was fully backed by U.S. dollars, according to the CFTC. The order requires the firm to pay a penalty of $41M.
• Playing with CBDC?????France’s central bank has executed a series of bond transactions leveraging blockchain?using its own digital currency?as part of a 10-month pilot. The Banque de France, along with a group of France’s largest financial market participants, executed the transactions using a system developed by U.S.-based IBM, according to a statement from securities depository Euroclear.

Money Moves??

• Crypto payments specialist?Nukkleus?has acquired a 5% interest in?Jacobi Asset Management, a company focused on digital asset management.
• FTX, the Bahamas-based crypto exchange, has raised?$420,690,000?in a Series B-1 funding round including 69 investors.?Investors valued the exchange at $25B, a nearly 39% jump over the Series B sticker price from July when it raised $900M in crypto’s largest-ever venture capital funding round. FTX says users have grown 48% in that period and trading volume rose 75%.
• Worldcoin, a project that plans to scan the eyes of every living person using an Orb to register them for a type of crypto-based?universal basic income?has raised $25M from investors including Andreessen Horowitz (a16z), Coinbase Ventures, and Digital Currency Group (the parent company of CoinDesk). The 70-person company, based in Berlin, predicts over a billion people will have gazed into the Orb by 2023.
• Candy Digital, a non-fungible token (NFT) startup majority-owned by Fanatics, has completed a?$100M Series A financing round co-led by Insight Partners and SoftBank Vision Fund 2 at a $1.5B valuation. Candy Digital is building the official NFT ecosystem for Major League Baseball (MLB) and other sports leagues.

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech, Blockchain & Crypto with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

???The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company

???Cutting Through the Noise: Bitcoin Fundamentals & Why it Was Created

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About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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