Kimchi Premium & P2P Crypto Trading in South Korea Spikes, FSC Taxing NFTs & Banning NFT Games

Amidst the regulatory headwind, SK Square, the investment arm of a telecom giant, became the 2nd-largest shareholder of crypto exchange Korbit, while Upbit’s parent company buys a stake in the bank Woori Financial.

The Financial Services Commission (FSC) of South Korea wants the National Assembly to bring criminal liability to price manipulation, insider trading, and other unfair behavior in crypto markets, according to a report submitted to the South Korean Parliament earlier last week.

The National Assembly has ordered the FSC to develop a comprehensive draft bill on crypto in a month.

The FSC report will be used to draft crypto legislation, and its recommendations call for punishments relative to the gains obtained unfairly, with a minimum of one year in prison and fines 3-5 times the illicit gains.

The agency, however, also wants crypto service providers to form an association so that they can regulate themselves.

NFTs Under Scrutiny

FSC has also called for taxes on some types of NFTs. Earlier this month, some FSC officials have said that NFTs would not be subject to the crypto tax, but now FSC Vice Chairman Do Gyu-sang said in no uncertain terms that “The Ministry of Strategy and Finance is preparing tax provisions for NFTs in accordance with the Special Reporting Act.”

Additionally, the regulators are banning NFT-applied games in the country on concerns that they could fuel gambling addiction among teens and the younger generation.

“It’s not the blockchain technology that we are banning,” an unnamed official at South Korea’s Game Rating And Administration Committee told Reuters. “What we are saying ‘no’ to is the application of NFT that can be connected to real assets.”

Despite the local regulatory hurdle, local game developers are looking to cash in on the NFT boom, with NCSoft Corp saying earlier this month that it is ready to release a game that includes blockchain and NFT elements next year.

P2P Trading Spikes

South Korea is set to implement a 20% tax on crypto gains over KRW 2.5 million ($2,100) starting next year, but both the ruling and opposition parties are calling for an extension to the deadline.

Reportedly, both parties have effectively agreed on the amendment to the Income Tax Act, which suspends the taxation of virtual assets for one year, to begin on January 1, 2023.

Last week, this sent the kimchi premium to over 8.5% — the highest since May this year — which has come down to 5.3% on Monday. The most popular crypto assets on the largest South Korean exchange Upbit are SAND trading at $7.80 and Bitcoin $60,430, while on Binance, BTC is around $57,600, as of writing.

While crypto regulations are getting more strict, interest in crypto isn’t affected though trading has shifted to P2P exchange platforms.

According to recent data from LocalBitcoins, more than 353 million Korean Won (just under $300k) were traded in the first week of this month.

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Integrating with traditional finance

Amidst the regulatory headwind, SK Square, a new investment company under South Korean giant SK Telecom, announced on Monday that it had become the second-largest shareholder of Korbit by investing about 90 billion won ($75.5 million) to acquire a 35 percent stake.

The exchange recorded about 3,584 trillion won in crypto transactions between January and September this year, about 450 trillion won greater than the transaction value of the Kospi, the major stock market index of South Korea, during the same period.

Meanwhile, Upbit’s parent company Dunamu has become a shareholder of Woori Bank, one of the largest banks in South Korea. Last week, Dunamu purchased 1% of Woori Financial for $81.7 million from Korea Deposit Insurance Corporation.

Thanks to the crypto market gains since last year, Dunamu has accumulated more than a trillion Korean won ($900 million) worth of cash equivalents by the end of last year.

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Author: AnTy

LATAM E-Commerce Giant to Allow its Millions of Users to Buy, Store, & Sell Crypto via Digital Wallet

LATAM E-Commerce Giant to Allow its Millions of Users to Buy, Store, & Sell Crypto via Digital Wallet

MercadoLibre is the latest company to join crypto as soon it will offer its customers in Brazil the ability to buy, sell, and hold cryptocurrencies using its digital payments app.

MercadoLibre is the largest Latin American company by market cap, and through crypto, it is expanding its financial products.

The crypto feature was already available to a select small group of clients earlier this month and will be rolled out broadly in the coming months, said vice president Tulio Oliveira. Mercado Pago’s digital wallet has 16.8 million unique users as of the third quarter of 2021.

The news was first reported by Bloomberg, which was retweeted by Mercado Libre co-founder and CEO Marcos Galperin, who also said that users of both Mercado Livre, the Brazilian branch, and its fintech arm Mercado Pago would be able to “buy, store and sell crypto” starting this week.

The company has been planning its crypto move for months now as back in August, President Osvaldo Gimenez said Bitcoin and Ethereum “could be a revolution in finance.”

Before that, in May, MercadoLibre had also disclosed its $7.8 million Bitcoin purchase as part of the treasury strategy. Prior to that, its Argentine real estate platform started accepting BTC for the purchase and sale of properties.

In a statement on Monday, MercadoLibre said that it was entering the crypto space in Brazil together with “a world-class custodian” but didn’t mention who it is partnering with. The company is “analyzing all financial and regulatory aspects surrounding this technology,” it added.

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Author: AnTy

Apple CEO says the Tech Giant Looking into Crypto, But Not Planning to Use its $200B Cash to Buy Bitcoin

Apple CEO says the Tech Giant Looking into Crypto, But Not Planning to Use its $200B Cash to Buy Bitcoin

Tim Cook personally, however, owns Bitcoin and Ether as “part of a diversified portfolio.”

Tim Cook, chief executive officer of tech giant Apple, revealed that he owns cryptocurrency.

Speaking at The New York Times’ DealBook conference, when asked if he owns Bitcoin or Ethereum, Cook said,

“I do. Yeah, I think it’s reasonable to own it as a part of a diversified portfolio.”

The CEO further shared that he has “been interested in it for a while and I’ve, you know, been researching it and so forth. And so I think it’s interesting.”

Cryptocurrencies have had a stellar start of the week as Bitcoin made a new all-time high just above $68,500 while Ether went to hit a new high at $4,845.

While he personally invests in the crypto asset, Cook said he has no plans to buy Bitcoin with the company’s $200 billion cash, but crypto is something they are looking at.

“I don’t think people buy Apple stock to get exposure to crypto,” he said. If people really want exposure to crypto, they can invest directly in it through other means, Cook added.

Apple is currently the world’s second most valued company, after Microsoft, with a market cap of $2.47 trillion, while Bitcoin is the 6th largest at $1.26 trillion.

As for accepting the cryptocurrency, Cook said that the company has no immediate plans to enable crypto functionality in Apple Pay but that “there are other things that we are definitely looking at.”

In 2019, an Apple Pay executive said that the company saw “long-term potential” in cryptocurrency.

Additionally, Cool called non-fungible tokens (NFTs) an “interesting” part of the crypto world.

When asked about Facebook rebranding to Meta Platforms and its metaverse push, Cook said augmented reality (AR) remains a core technology of Apple. The company plans to unveil its own mixed reality headset next year.

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Author: AnTy

Starbucks Card Is Now Reloadable with Crypto, Coffee Giant Exploring Tokenizing Through Blockchain

Starbucks Card Is Now Reloadable with Cryptocurrencies, Coffee Giant Exploring Tokenizing Through Blockchain

The Seattle-based coffee giant Starbucks (SBUX) reported its fourth-quarter revenue of $8.15 billion.

During its earnings call, President and Chief Executive Officer Kevin Johnson said they are deepening its digital relationship and expanding the reach through payment partnerships with PayPal and Bakkt.

This partnership now allows a customer to “reload their Starbucks card with a range of cryptocurrencies including Bitcoin, Ethereum and others by converting digital currencies to physical currency and reloading their Starbucks card,” he said.

He further talked about utilizing blockchain technology to enhance digital services, enable customers to exchange value across brands, engage in more personalized experiences, and exchange other loyalty points for Stars at Starbucks.

“Through blockchain or other innovative technologies, we are exploring how to tokenize Stars, create the ability for other merchants to connect their rewards program to Starbucks Rewards,” Johnson said.

By leveraging its digital capabilities, Starbucks grew its 90-day active Starbucks Rewards members that represent the company’s most loyal and engaged customers by about 30% to 24.8 million members.

MicroStrategy’s Bitcoin Stash Grows Over $7 Bln

Besides Starbucks, business intelligence company MicroStrategy which holds Bitcoin on its balance sheet also reported its Q3 financial results that showed it purchased 8,957 BTC in this quarter, bringing its total holdings to over 114,000 BTC worth more than $7 billion at current prices.

The book value of the company’s Bitcoin stash was $2.406 bln with a cumulative impairment loss of $754.7 million.

MicroStrategy also reported a revenue of $128 mln. “We’re profitable, we’re generating a very healthy operating margin, and I’m very pleased with the stability and maturity of that business,” said CEO Michael Saylor.

During the third quarter, the company also offered $500 mln of senior secured notes, a “more creative” option than convertible debt issuance, with an annual interest rate of 6.125% in a private offering to finance more Bitcoin purchases.

Commenting on the regulatory discussions around Bitcoin, Saylor said,

“There’s no intention to block institutions from owning this asset.”

“It’s been referred to as a scare, speculative digital asset, or store of value asset.”

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Author: AnTy

VC Giant Sequoia Capital Changing Fund Structure to Invest in Emerging Asset Classes Including Crypto

VC Giant Sequoia Capital Changing Fund Structure to Invest in Emerging Asset Classes Including Crypto

Venture capital firm Sequoia Capital is changing its fund structure to invest in emerging asset classes like cryptos along with initial public offerings (IPOs).

In a blog post, Roelof Botha, a partner at Sequoia, declared that the existing time-based model — “rigid 10-year fund cycle” — for investing has “become obsolete.”

Much like the VC giant Andreessen Horowitz (a16z), Sequoia is becoming a registered investment advisor that will give it more flexibility to invest out of restrictions and “enables us to further increase our investments in emerging asset classes such as cryptocurrencies and seed investing programs.”

Sequoia Capital is known for its early bets on Cisco, Apple, Google, Airbnb, Zoom, and Snowflake.

The firm is now establishing a single fund, the Sequoia Fund, that will raise money from LPs which will be funneled down to a series of smaller funds that will invest by stages.

Sequoia will now choose how much money they invest in crypto, early-stage start-ups, secondaries, more mature businesses, and international deals.

“This new structure removes all artificial time horizons on how long we can partner with companies,” Botha wrote.

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Author: AnTy

Pimco is Already Trading Crypto But Now Plans to Invest in Certain Assets & Learn DeFi

$2.2T Fixed-Income Giant, Pimco, is Already Trading Crypto, Now Plans to Invest in Certain Assets & Understand DeFi

“We’ll take baby steps in an area that’s rapidly growing,” said Pimco CIO Daniel Ivascyn.

Pimco, the asset manager giant with $2.2 trillion in assets under management, has been dabbling in cryptocurrency for some time and now plans to gradually invest more in crypto assets.

“Now we’re looking at potentially trading certain cryptocurrencies as part of our trend-following strategies or quant-oriented strategies, then doing more work on the fundamental side,” said chief investment officer Daniel Ivascyn in an interview with CNBC.

“So this will be a gradual process where we spent a lot of time on the internal diligence side speaking to investors. And we’ll take baby steps in an area that’s rapidly growing.”

Ivascyn’s comments came as Bitcoin hit a fresh all-time high at $67,000, and today Ether nearly touched its $4,380 ATH.

Some of the company’s hedge fund portfolios are already trading crypto-linked securities, he said.

“We’re trading from a relative value perspective. So we’re not taking directional exposure, but we’re looking to take advantage of mispricings between the cash product, popular trust that trades on the exchange, and then the futures.”

“So that was a starting point for us in a very narrow segment of our business.”

Pimco is also taking an interest in decentralized finance (DeFi), which one has to understand because “it will be disruptive…in our business in particular,” Ivascyn said.

The firm is currently working on scenarios where it could provide them with a competitive edge “in a rapidly changing environment that offers a pretty significant value proposition,” particularly for younger generations — the new generation of the investment community.

Unlike Pimco, hedge fund manager David Einhorn finds cryptocurrencies “very complicated” as such; he hasn’t chosen to invest in them.

Greenlight’s Einhorn prefers gold as an inflation hedge, in contrast to billionaire investor Paul Tudor Jones, but said,

“I’m not negative on [cryptocurrencies]. … They may continue to do extremely well. I just haven’t chosen to invest in them.”

Earlier this month, he had put crypto in a “too hard” bucket because it was unregulated and unlimited. “I don’t have a strong view that this is some enormous waste or this is some phenomenal opportunity. I think it’s too difficult,” he said at the time.

In his interview this week with CNBC, Einhorn said that the Federal Reserve “doesn’t have the stomach to fight inflation” because policymakers are afraid to trigger a market correction or a recession. This means, “they are really left with bad choices.”

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Author: AnTy

Australia’s Pension Fund Giant with $69 Billion AUM Is Open to Investing in Crypto

Australia’s Pension Fund Giant with $69 Billion AUM Is Open to Investing in Crypto

“As the (crypto) segment matures . . . there’s a likelihood that super funds seek out exposure,” said QIC’s head of currencies. Pension funds are still only interested in blockchain technology, with bitcoin “not an area of interest or focus.”

Queensland Investment Corporation (QIC), one of Australia’s largest pension funds, said it might make small investments in the cryptocurrency sector. The fund told the Financial Times that it is open to investing in cryptocurrencies in the future.

QIC manages A$92.4bn ($69 billion) of assets and is Australia’s fifth biggest pension fund.

According to the fund’s head of currencies, Stuart Simmons, early inflows into crypto are likely to be “more a trickle than a flood” due to uncertainty surrounding regulation.

“I don’t think there’s an inevitability about super funds and the institutional market investing in crypto, but as the segment matures . . . there’s a likelihood that super funds seek out exposure.”

Unlike family offices and private investor funds in the country, Australia’s “supers,” which pool together and manage people’s retirement savings, hasn’t entered the crypto market until now.

Not Interested in Crypto Assets

This is yet another sign that retirement funds are now taking an interest in the crypto asset space despite increasing regulatory scrutiny. Recently, Canada’s second-largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), with $300 billion in assets, led crypto lender Celsius Network’s $400 million equity funding round.

CDPQ CTO and executive vice-president Alexandre Synnett said in an interview that their inaugural investment in the crypto sector shows their “conviction” in blockchain technology, which will “change the way the financial services are interacting.”

Synnett, however, said the fund is only focused on making “opportunistic” investments in “diamond in the rough” early-stage companies and that this is just a “small diversification play,” with “absolutely” no plan to allocate funds directly into Bitcoin or other cryptos.

Similarly, Andrew Fisher, the head of the asset allocation at Sunsuper, a Queensland-based pension fund manager with $63 bln in AUM, said it is only interested in blockchain technology, and that bitcoin and other cryptos are “not an area of interest or focus.”

Regulatory Requirements Need Clarity

According to Simmons of QIC, there are still a number of uncertainties around cryptocurrencies, and the “operational infrastructure for institutional investing remains immature,” as well.

The largest investors will want more certainty on the regulatory front and more protections around “unquantifiable risks” such as fraud and market manipulation, he added.

But once regulatory requirements become clear, conservative investors will feel more comfortable making investments into the sector.

The entry of large banks and other financial institutions “highlights the perceived opportunity from the enablement of crypto investing,” said Simmons.

“As the framework continues to develop, super funds may eventually simply be responding to user demand by facilitating investment in crypto.”

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Author: AnTy

Insurance Giant Sees Bitcoin As A “Store Of Value” And A “Potential For Significant Price Appreciation”

Insurance Giant Sees Bitcoin As A “Store Of Value” And A “Potential For Significant Price Appreciation”

MassMutual CIO says it would take multiple market cycles to determine if Bitcoin serves as an inflation hedge. Meanwhile, Billionaire private equity investor Orlando Bravo asks, “How could you not love crypto?”

Billionaire private equity investor Orlando Bravo revealed that he is a Bitcoiner and is “very bullish” on cryptocurrency.

“How could you not love crypto?” said Bravo at this week’s Delivering Alpha conference on CNBC.

Bravo is the founder of Thoma Bravo and has a net worth of $6.3 billion. His firm has invested in the crypto derivatives platform FTX. On Wednesday, he shared that he personally owns Bitcoin.

“Crypto is just a great system. It’s frictionless. It’s decentralized. And young people want their own financial system. So it is here to stay.”

“For me, it’s pretty simple. More people are going to use it in the future than today, and it’s going to be more established. Institutions are just beginning to go there, and once that happens, I think it will increase significantly over the years. I’m very bullish.”

According to Bravo, regardless of what protocol or system one is building on, the underlying blockchain technology can be “very powerful” and “provide better use cases than data-based software.”

New And Still Undergoing Price Discovery

Much like Bravo, Chief Investment Officer of MassMutual, an insurance company with $616 billion assets under management, is bullish on the future of cryptocurrencies.

In a LinkedIn post titled “Bitcoin and beyond: evolving for the digital world of tomorrow,” published on Thursday, ​​Tim Corbett talked about Bitcoin has the potential of being a store of value over the long term.

MassMutual first ventured into cryptocurrency last year with an investment in Bitcoin for its General Investment Account (GIA).

“We have come to believe that cryptocurrency and the blockchain ecosystem have the potential for significant growth and transformation across our industry, amongst others, in the years to come,” as such the company found it imperative to invest in crypto itself and lay the groundwork for ways to incorporate it into their business.

Corbett further wrote that they have come to “view bitcoin as a potential store of value over the long-term.”

According to him, Bitcoin may also serve as a “digital gold,” thanks to its unique characteristics including digital scarcity, known supply growth, transfer characteristics, and hard cap, “with the potential for significant price appreciation.”

Overall, he says the “asset class is new and still undergoing price discovery,” with significant uncertainty, risk, and volatility, which is expected to decrease as more institutions join in but added that,

“it will take multiple market cycles before we have robust data to further describe the characteristics of the investment, such as correlations to other asset classes or whether it will serve as an inflation hedge.”

Still, Bitcoin is not untested, and while the regulatory environment is still developing, Corbett says thoughtful and prudent regulation will accelerate the industry while protecting investors.

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Author: AnTy

Fidelity Predicting $100 Million per Bitcoin by 2035

Boston-based investment giant Fidelity Group is injecting a heavy dose of hopium in the market with its latest “very special” webinar, where it took a deep dive into Bitcoin and its possible effects on the market.

Fidelity, which also has its own crypto arm, Fidelity Digital Assets that builds enterprise-grade bitcoin custody services for large institutions, isn’t new to the space as it first started mining Bitcoin (BTC) in 2014 and then Ether as well.

Now, the firm is putting out bullish reports on Bitcoin and sees the leading digital asset hitting $1 million before this decade is over and a whopping $100 million by 2035.

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This much hopium was difficult to digest for some as one Redditor noted, “Bitcoin is not gonna reach $100 million. That would give it a market cap of $2,100 trillion. The total wealth of the entire world is $418 trillion.”

Jurrien Timmer, Director of Global Macro Fidelity, hosted the event that shared several charts to help the audience understand Bitcoin.

One of the charts depicts Bitcoin’s adoption curve based on active addresses count and compares it with broadband subscriptions, Internet users, and mobile phone subscribers.

The webinar also discusses purchasing power of various assets, not covering Bitcoin, where stocks are the clear winner at $3.9 billion, followed by bonds at $19.9 billion, and cash at $326k compared to the inflation index. The purchasing power of $1 has the least in fiat at a mere $0.02. Even the safe haven, gold, isn’t doing much better at $94 when the inflation index has a reading of $65.

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Author: AnTy

Morgan Stanley Discloses Holding More than 5.8 Million GBTC Shares

In its filing with the US Securities and Exchange Commission (SEC), banking giant Morgan Stanley revealed that it owns a large amount of Grayscale Bitcoin Trust (GBTC) shares, currently trading at $39.12, at a 13.36% discount to Bitcoin, which is hovering around $47k.

Morgan Stanley owns GBTC shares across multiple portfolios, with the largest 928,051 shares held by its Insight Fund.

Twelve separate mentions of Morgan Stanley Institutional Fund Inc show a collective 4,772,064 GBTC shares, while two of the three Morgan Stanley Variable Insurance Fund Inc. owns a total of 179,703 GBTC shares.

Overall, the bank owns 5,879,818 GBTC shares worth $230 million.

Additionally, all of the Morgan Stanley Institutional Fund Trust shows 611,868 GBTC shares in the filing.

Back in late June, when BTC was trading in the below $30,000s, Morgan Stanley had also disclosed a position worth $1.3 million in GBTC via their Europe Opportunity Fund.

With trillions of dollars in assets under its management, Morgan Stanley is one of the biggest traditional participants to explore cryptocurrencies and investing in crypto infrastructure.

Competitors Wells Fargo, JPMorgan, and Goldman Sachs, are also investing in the crypto space and planning to offer their clients access to cryptocurrencies.

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Author: AnTy