As the final season of Game of Thrones looms ahead, it seems there may not be enough space for two winters in this world. Crypto enthusiasts have been rejoicing as it seems the crypto winter is behind us.
On that note, let’s get stuck into this edition of the Luno RoundUp where we chat about Bitcoin’s recent spike, movements in mass adoption, and regulatory news.
Winter (probably) isn’t coming
While we’re unable to speculate on whether or not the crypto winter is over, the facts indicate the price of Bitcoin surged to over USD 5000 last week. What triggered the move? Our CEO, Marcus, weighed in with the Financial Times. Although he didn’t rule out the possibility that it was sparked by the April Fools’ announcement where the SEC approved Bitcoin ETFs, he added that it’s more likely one large investor, perhaps institutional, bought a significant amount of crypto for their portfolio. This may have triggered a knock-on effect in the market.
It seems the QuadrigaCX debacle is taking an even darker turn for the crypto exchange, as the Supreme Court in that country has approved an application for bankruptcy. Under the watchful eye of Ernst & Young, the bankruptcy process will attempt to record over $260 million in cash and crypto. Though that might be difficult, as the late CEO, Gerald Cotten, was the only person who held the private keys to over access over 115 000 customers’ private keys.
Online payment giant, PayPal has made its first-ever investment in a blockchain company. The company has joined a series A investment in Cambridge Blockchain, not to be confused with Cambridge Analytica, a startup that aims to help financial institutions and other companies manage sensitive data by using shared ledgers. At this stage, it seems the company is going by the book. This is another great indication we’re moving towards mass adoption in the wider market.
German Bank, WEG Bank AG, is now nearly 30% owned by crypto companies. Nimiq, a decentralised payment system, purchased 9.9% of the bank joining blockchain payments platform. They’re joined by TokenPay, and the Litecoin Foundation, a non-profit dedicated to advancing and promoting blockchain technology, as part owners of the Munich-area financial institution.
Keeping things in frame
In the U.S., the SEC’s Strategic Hub for Innovation and Financial Technology has released a framework aimed at assisting market participants to analyse whether certain activity in relation to digital assets would fall within the scope of existing securities laws.
The framework encourages entities who are looking to offer, buy, sell or store digital assets, or perform various other services to work through the guidance but it was made clear that the framework is not a rule, regulation, or statement of the SEC.
You asked, and we listened.
“Does Luno have an OTC desk?”
Let’s start by looking at what OTC is. Over-the-counter (OTC) trading is a service favoured by high-volume traders or high-net-worth individuals that takes place away from exchanges. The phrase “over-the-counter”, in this context, can be used to refer to stocks that trade via dealer networks instead of a centralised exchange.
OTC trading takes place directly between two parties, facilitated by a broker. For example: if I wanted to buy USD 100 million in Bitcoin, it would be easier and more efficient to match a buyer and seller on an OTC desk rather than on an exchange.
We tested OTC transactions a few times before but this isn’t something we currently offer. We're in the process of building out a business product offering and may look into it again if this is something that makes sense for our business customers. We’re always talking to our users to understand their needs, and we prioritise functionalities and features based on what’s most beneficial or valuable on the whole. Keep an eye on our social media to make sure you’re always up to date on our latest product offers and features.