In recent developments within the cryptocurrency market, the U.S. Spot Bitcoin ETF has experienced significant net withdrawals, totaling approximately $909 million over the past two weeks. This marks a notable trend, following a loss of about $681 million in the week prior, making it the largest institutional sell-off since April. The sentiment within the market seemed to correlate with these withdrawals, as Bitcoin’s price dropped below $82,000 at one point, leading to nearly $1 billion in liquidations across leveraged positions on October 15. By the end of the week, Bitcoin stabilized around $81,400.
Market Summary
The recent performance of the U.S. Spot Bitcoin ETF can be summarized as follows:
- Withdrawals of $909 million from October 12 to 16.
- The largest institutional sell-off since April.
- Approximately $771 million in positions liquidated in a single day at the week’s start.
- Price fluctuations with Bitcoin ending the week around $81,400.
EU’s Recognition of USDC and Impact on Tether
In a significant development for stablecoins in Europe, the European banking regulators have recognized Circle’s USDC as the first “significant” e-money token under the Market in Crypto-Assets (MiCA) framework. Starting November 12, stablecoins will shift from individual national supervision to the direct oversight of the European Banking Authority (EBA), which will implement stricter capital requirements and redemption conditions.
While Circle has successfully acquired an EU license, Tether’s USDT has opted not to engage in this supervisory process, thus remaining outside the new regulatory framework. Additionally, the European Securities and Markets Authority (ESMA) has granted a three-month grace period for EU platforms to divest from non-compliant stablecoins, leaving exchanges with critical decisions to make.
Charles Schwab Ventures into Crypto
In a contrasting move within the U.S. financial landscape, Charles Schwab has launched Schwab Crypto, allowing eligible customers to trade Bitcoin and Ether with a transaction fee of 0.75%. This initiative could integrate cryptocurrencies into the financial management resources of approximately 35 million brokerage accounts, making digital assets more accessible to mainstream investors.
Notably, the Office of the Comptroller of the Currency (OCC) recently indicated that all nine major national banks possess internal policies that permit them to restrict or refuse service to entities associated with digital assets. Although this review does not enforce specific regulatory actions, it documents existing practices, which may influence future legislative and regulatory developments.
Potential Changes in Equity Indices
MSCI has introduced criteria that could lead to the exclusion of Strategy and Metaplanet from its equity indices. The final decisions will be announced on November 11, with any deletions becoming effective post-market closure on November 30. This presents a potential dilemma for passive investment funds that track these indices, as they may be required to sell off their holdings in companies that have linked their valuations to Bitcoin, diverging from MSCI’s conventional evaluation models.
Regulatory Climate and Industry Leadership Void
Amidst evolving regulatory frameworks, Patrick Witt, the former advisor leading the White House Office of Digital Assets, has resigned without naming a successor. This departure occurs as key regulatory bodies such as the SEC, CFTC, and OCC are in the process of developing new rules for cryptocurrency markets.
Meanwhile, Jamie Selway, the director of trading and markets at the SEC, revealed that five exchanges registered with the CFTC have applied to transition into securities futures exchanges. At least four of these may be able to offer perpetual futures for securities by the end of this year—a type of contract that remains popular internationally but is yet to be regulated in the U.S. market.
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