What an interesting crypto week it’s been! If you blinked, you might have missed some of the most thrilling developments in the world of digital assets. From jaw-dropping confessions in the SBF trial to the SEC stand on not filing an appeal on Grayscale loss, the crypto space has been buzzing with major developments.
The crypto market has witnessed a significant downturn subsequent to the Hamas attack on Israel on October 7. Notably, the incurred losses stand in stark contrast to the meagre 0.18% decline observed in the Nasdaq Composite Index.
Crypto week summary with a focus on the Middle East
Currently, the crypto market is worth $1,032 billion, a decrease of 3.55%. The digital market capitalization had dropped to $1,073 billion on October 6, prior to a six-session selling streak.
The decline was initiated not only by the escalation of the Middle East conflict but also by the US CPI Report, which investors also responded to. A higher-than-anticipated US CPI report caused the total crypto market cap to fall to a one-week low of $1,015 billion. Predictions of an increase in interest rates by the Federal Reserve dampened investor interest in crypto.
1. SEC gives up the appeal on the Grayscale GBTC
According to a person familiar with the matter, the Securities and Exchange Commission will not appeal a court’s scathing reversal of its decision not to allow Grayscale to convert its bitcoin trust into a more investor-friendly exchange-traded fund, potentially clearing the way for the first bitcoin ETF in the United States.
The markets regulator had until midnight Friday to determine whether to appeal the court’s verdict, but the SEC won’t take advantage of that deadline. Following the news, Bitcoin (BTC) surged past $27,000.
Grayscale won an appeal against the SEC in August, with the Court declaring that the SEC must reassess its stance on Grayscale’s BTC-spot ETF proposal. Previously, the SEC denied Grayscale’s application to transform the Grayscale Bitcoin Trust into a Bitcoin-spot ETF.
2. Warren Buffett is banking on Bitcoin
Prominent investor and Oracle of Omaha, Warren Buffett, has never hesitated to express his skepticism regarding Bitcoin. Prior to this, he regarded Bitcoin and other cryptocurrencies as “gambling tokens” devoid of intrinsic worth.
Buffett’s investment in Nubank, nevertheless, inadvertently signals a shift in sentiment as he ventures into the cryptocurrency sector.
In 2021, prior to its Initial Public Offering (IPO), Berkshire Hathaway, an organization led by Warren Buffett, allocated $500 million towards Nubank, a digital bank headquartered in Brazil.
After the initial public offering, Berkshire Hathaway made an additional $250 million investment in Nubank, for a cumulative investment of $750 million. As of the end of the second quarter, the value of the position is $840 million, assuming Berkshire has not engaged in any share purchases or sales.
This year, Nubank expanded its presence in the crypto industry with the introduction of Nucoin, its alternative coin. Quite simply put, the action has reached its pinnacle of finances.
Nubank’s substantial increase in value exceeding 100% this year has eclipsed the market performance of other prominent investments in Buffett’s portfolio, such as Amazon, Apple, Coca-Cola, Bank of America, and Kraft Heinz.
3. The SBF trial revelations
Probably one of the top crypto villains is on trial for defrauding investors. The Sam Bankman-Fried vs. United States trial generated considerable market interest. The stand consisted of prosecution witnesses, which included Gary Wang, Caroline Ellison, and Zac Prince.
As part of plea agreements with the United States Department of Justice, former CEO of Alameda Research Caroline Ellison and Gary Wang, co-founder of FTX, both provided testimony.
Nishad Singh, Caroline Ellison, and Gary Wang all admitted to committing criminal acts at FTX. Wang’s admission that FTX allowed Alameda to withdraw an unlimited amount of funds was crucial.
Former SBF girlfriend Caroline Ellison also provided incriminating testimony. While being directly questioned, Ellison stated that SBF instructed her to commit the crimes and that he instructed her to set up the systems and embezzle the money.
On Friday, former BlockFi CEO Zac Prince took the stand. Prince stated, in response to prosecution inquiries, that BlockFi would not have granted Alameda loans had it been aware of the FTX-Alameda loans or the fact that Alameda was accessing funds belonging to FTX customers.
4. Binance under fire from UK Financial Conduct Authority
The UK Financial Conduct Authority (FCA) responded to Binance’s cooperation with rebuildingsociety.com on Tuesday.
The FCA imposed limits on rebuildingsociety.com, banning it from approving cryptocurrency financial advertising. Rebuildingsociety.com intended to manage UK promotional materials and communications for Binance as part of a newly created collaboration.
To protect UK retail investors, the FCA implemented the UK Financial Conduct Authority’s Financial Promotional Rules for Crypto Assets.
