Building Blocks #31

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Birds Eye View (vs Last 7 Days)

💵 Overall Crypto Market Cap: $3.3 Trillion (+13%)

🔶 BTC Dominance: 57% (+0.5 PPT)

💵 Price Snapshot:

🟠 Bitcoin: $99088 (+12.4%)

🔵 Ethereum: $3377 (+10.2%)

🟣 Solana: $259 (+23%)

🟡 BNB: $629 (+1.72%)

‘BITSANITY’ — Records broken with $70B in volume for Bitcoin stocks, ETFs as Bitcoin hits $99,000

The "Bitcoin Industrial Complex" — encompassing U.S. spot Bitcoin ETFs and prominent stocks like MicroStrategy (MSTR) and Coinbase (COIN) — achieved unprecedented trading volumes of $70 billion on Nov. 21 as Bitcoin surged past $98,300.

This shattered the previous day's record of $55 billion, when MSTR emerged as the second most actively traded stock in the U.S., as reported by Bloomberg ETF analyst Eric Balchunas, referencing Bloomberg Intelligence data.

"BITSANITY," remarked Balchunas regarding the remarkable figures.

MSTR dominated the day's trading activity, with its shares experiencing a dramatic 25% decline from its peak of $536.7 to close at $397.28 on Nov. 21.

The milestone coincided with Bitcoin's 5% surge to a historic peak of $98,311, as confirmed by CoinGecko data.

Bitcoin has slightly declined to $98,075 but remains within 2% of reaching the $100,000 threshold.

This development occurred as U.S. spot Bitcoin ETFs exceeded $100 billion in assets on Nov. 21.

Total inflows have reached $29.3 billion since January 11, when the U.S. securities regulator approved spot Bitcoin ETFs, based on Farside Investors data.

This amount includes over $20.2 billion in outflows from the Grayscale Bitcoin Trust (GBTC).

Balchunas noted that U.S. spot Bitcoin ETFs now represent 82% of gold ETFs' size, which have operated in U.S. markets since November 2004.

BlackRock's iShares Bitcoin Trust ETF (IBIT) leads all Bitcoin products with $30.2 billion in inflows.

The Fidelity Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF follow with $11.2 billion and $2.7 billion respectively.

Additionally, options contracts on BlackRock's IBIT debuted on Nov. 20, generating nearly $2 billion in total exposure traded. And overall - Bitcoin exchange-traded funds now collectively manage approximately $104 billion, and are on track to surpass gold ETFs in net assets.

Bloomberg ETF analyst James Seyffart attributed Bitcoin's rise above $94,000 at the time to these impressive trading volumes.

Solana breaks all-time high and institutions flood the SEC with SOL ETF applications

Solana (SOL) achieved a fresh all-time peak on Nov. 22, marking a remarkable recovery two years after the FTX exchange's downfall had previously decimated the layer-1 blockchain token's value.

The cryptocurrency reached $264.31 on Coinbase on Nov. 22, as reported by TradingView. This represents a significant 11% increase within the last 24-hour period.

SOL has emerged as one of the standout cryptocurrencies in 2024, accumulating gains of 160% since the year began.

The digital asset hit its lowest point at approximately $10 in December 2022 following the disintegration of former FTX CEO Sam Bankman-Fried's cryptocurrency operations.

The token's upward trajectory has been fueled by recent submissions from Bitwise, VanEck, 21Shares, and Canary Capital seeking approval for spot Solana exchange-traded funds.

Market experts have projected a potential peak of $400 for SOL following its breakthrough above the previous record high of $260.

The growing adoption and demand for SOL have been largely attributed to the surge in memecoin trading during this cycle, as the network offers cost-effective and straightforward token minting capabilities.

The Solana ecosystem's decentralized finance (DeFi) sector has demonstrated remarkable expansion, recording a 500% increase in total value locked this year, now standing at $8.8 billion, based on DefiLlama data.

Speculation about more favorable cryptocurrency regulations under Donald Trump has energized digital asset markets recently, pushing the total market value to a record $3.42 trillion on Nov. 22.

The alternative cryptocurrency market has also gained momentum following the news of SEC Chair Gary Gensler's upcoming January departure. Throughout his leadership, Gensler consistently maintained that all cryptocurrencies except Bitcoin (BTC) qualified as securities.

Cboe BZX Exchange has filed four 19b-4 applications for asset managers Bitwise, VanEck, 21Shares, and Canary Capital to introduce spot Solana exchange-traded funds, and upon approval, the Bitwise, VanEck, 21Shares, and Canary Capital-sponsored spot Solana SOL ETFs would commence trading on the Chicago Board Options Exchange (CBOE)'s BZX Exchange, situated in the United States.

BlackRock receives license to operate in Abu Dhabi

Investment giant BlackRock, known for its spot Bitcoin ETF offerings, has secured a commercial operating license in Abu Dhabi, the United Arab Emirates capital.

Bloomberg reports that the November 18 approval demonstrates BlackRock's commitment to growing its presence in this crypto-welcoming jurisdiction.

The investment firm is additionally pursuing authorization to conduct business in the Abu Dhabi Global Market (ADGM), a premier financial center that currently hosts crypto enterprises including Blockdaemon, M2, and Laser Digital.

While the UAE is recognized as a crypto-friendly destination, the announcement made no reference to digital assets. Speaking to Bloomberg, BlackRock's Middle East chief Charles Hatami indicated the company would concentrate on private markets and AI infrastructure development.

This strategy complements Abu Dhabi's existing AI initiatives. Microsoft previously announced a $1.6 billion investment in G42, an Abu Dhabi AI technology holding company, on April 16. The tech giant indicated this funding would accelerate AI advancement locally and internationally.

Microsoft further revealed plans on September 17 to launch two AI facilities in Abu Dhabi as part of its worldwide AI expansion. One facility will support AI initiatives addressing societal challenges, while the other will develop responsible AI usage guidelines.

BlackRock has not disclosed additional information about its UAE operations beyond obtaining the operating license.

Hatami described Abu Dhabi as an emerging "global financial center," praising the government's forward-thinking approach and dedication. The executive remarked:

BlackRock manages the iShares Bitcoin Trust ETF, providing U.S. investors Bitcoin exposure. The spot Bitcoin ETF's net assets exceeded $33 billion on November 8, surpassing its iShares Gold Trust ETF, which offers gold exposure.

The UAE continues strengthening its position in digital finance. The nation achieved third place in a crypto adoption ranking published by investment migration consultancy Henley & Partners on August 30.

PayPal's Xoom launches cross-border stablecoin settlement

Xoom, a PayPal subsidiary, has initiated cross-border transactions using PayPal USD, the company's stablecoin, as announced on Nov. 19.

The financial services company plans to introduce PYUSD to Asian and African regions and enable PayPal to process international transfers beyond traditional banking timeframes, PayPal stated.

Xoom has established partnerships with Cebuana Lhuillier and Yellow Card to facilitate PYUSD payments.

Introduced in 2023, PYUSD maintains a 1:1 dollar backing and is managed by Paxos Trust Company, a regulated U.S. crypto custodian. It rivals other regulated dollar-backed stablecoins, including Circle Internet Financial's USD Coin.

PYUSD, an Ethereum-compatible ERC-20 token, remains the exclusive stablecoin on PayPal's payment system. PayPal designed it for accessibility to "external developers, wallets and Web3 applications" and seamless integration with crypto exchanges.

PayPal continues to enhance PYUSD's reach, including collaborating with Anchorage Digital to create a rewards system for customers storing PayPal USD stablecoins with the custodian.

In May, PayPal deployed PYUSD on Solana, joining forces with Crypto.com, Phantom, and Paxos to facilitate user access to the blockchain network.

It also collaborated with MoonPay for cryptocurrency purchases via PayPal accounts. This alliance expanded to enable access to Polymarket's crypto betting platform in July.

Coinbase, another institutional custodian, rewards users for holding stablecoins, offering roughly 5.2% annual percentage yield on USDC. Coinbase maintains equity ownership in Circle.

Despite recent achievements, PYUSD remains significantly behind USDt and USDC in market presence. CoinMarketCap data shows these leading stablecoins hold market capitalizations of approximately $128 billion and $37 billion, respectively.

Tether, Kraken, Fabric Ventures back new MiCA-compliant stablecoins

Major crypto players Tether, Kraken, and Fabric Ventures have joined forces to support Netherlands-based fintech firm Quantoz Payments in introducing two regulatory-compliant stablecoins, EURQ and USDQ, aligned with the EU's Markets in Crypto-Assets Regulation (MiCA).

Scheduled to debut on Nov. 18, these euro and US dollar-pegged digital tokens have received e-money token (EMT) licensing from the Dutch Central Bank (DNB). These fiat-backed stablecoins are designed to deliver regulated, secure digital payment solutions throughout the European Economic Area (EEA).

Starting Nov. 21, EURQ and USDQ will be available on Kraken and Bitfinex platforms, offering qualified European clients access to more efficient, rapid, and clear-cut transactions for both business and individual applications.

The launch of EURQ and USDQ represents a crucial step forward in Europe's regulated digital financial landscape, supported by MiCA's regulatory structure to enhance confidence in stablecoin providers.

These digital assets comply with MiCA's standards, incorporating full fiat backing plus an additional 2% reserve maintained by Quantoz, ensuring accountability and reducing risks in cryptocurrency transactions.

According to a statement, Fabric Ventures' general partner Anil Hansjee noted that "Europeans speak loudly about MiCA making stablecoin issuance seamless in Europe."

While supporting Quantoz's MiCA-compliant stablecoin launch, Tether CEO Paolo Ardoino previously expressed concerns that the regulatory framework might create "systemic risks" for banking operations.

Ardoino's worries relate to MiCA's stipulation requiring stablecoin issuers to maintain at least 60% of their reserves in European banks, raising potential issues regarding lending practices.

He cautioned that this requirement could create vulnerabilities when banks, potentially lending up to 90% of their reserves, encounter financial difficulties.

Recently, Norway's central bank, Norges Bank, expressed support for the EU's MiCA regulations while assessing their potential role in central bank digital currency (CBDC) development.

In an interview, bank project director Kjetil Watne confirmed Norway's positive stance toward MiCA but indicated they were evaluating whether "additional regulations" might be necessary for financial stability.

As an EEA member, Norway closely follows EU regulations including MiCA, and while it remains undecided about CBDC implementation, the country is exploring possibilities for a "CBDC-based cross-border payment system."

Mastercard and JPMorgan integrate blockchain payment solutions 

Mastercard and JPMorgan have established a collaborative partnership to deliver a new cross-border payment solution for businesses. Clients using both Mastercard's Multi-Token Network (MTN) and JPMorgan's Kinexys Digital Payments can now complete transactions through a unified application programming interface (API) integration.

The integration between MTN and Kinexys will deliver improved payment accessibility while minimizing "time zone friction" and boosting both transparency and settlement efficiency.

"Commercial bank payment rails that seamlessly integrate with digital marketplaces and platforms enhance the value proposition of commercial transaction venues," stated Kinexys by JPMorgan co-head Naveen Mallela in an official announcement.

MTN delivers a collection of blockchain-powered tools that will leverage Kinexys Digital Payments' payment infrastructure for instant transfers.

Kinexys Digital Payments emerged in 2020 as Onyx, pioneering the first bank-operated blockchain platform utilizing the dollar-linked JPM Coin. The platform targeted cross-border payments. While initially meeting resistance from cryptocurrency enthusiasts, it gained significant traction among traditional financial institutions.

Goldman Sachs pioneered JPM Coin adoption, followed by banking institutions across India and the Middle East. The service expanded to include euro-based payments in June 2023 and achieved $1 billion in daily transactions by October. JPMorgan reports this volume has now doubled to $2 billion per day.

The transformation of Onyx to Kinexys was revealed on Nov. 6. Simultaneously, JPMorgan announced plans to combine Kinexys with JPMorgan FX Services, enabling blockchain-based foreign exchange settlements, starting with USD and euro transactions.

Kinexys also published a technical paper on Nov. 6, demonstrating its proof-of-concept for enterprise-level privacy, identity management, and composability on blockchain.

Mastercard revealed its MTN testing phase in June 2023. The network's inaugural live trial occurred in May 2024, when Mastercard partnered with Standard Chartered Bank Hong Kong to conduct a proof-of-concept pilot, tokenizing carbon credits within the Hong Kong Monetary Authority Fintech Supervisory Sandbox.

Previously, MTN had conducted experiments with wrapped central bank digital currencies in collaboration with the Reserve Bank of Australia.

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