Grayscale Seeing New Group of Investors Seeking Ethereum as a First & Only Asset

While Bitcoin continues to rule the cryptocurrency market, the second-largest crypto Ethereum also sees a lot of traction.

According to Michael Sonnenshein, managing director at Grayscale Investments, which caters to institutional and accredited investors only, up until 2020, most investors’ first stop was Bitcoin. But now, the most actively used blockchain in the world and its token Ether is getting more attention, he said.

“Over the course of 2020, we are seeing a new group of investors who are Ethereum first and in some cases Ethereum only,” Sonnenshein said in an interview with Bloomberg. “There’s a growing conviction around Ethereum as an asset class.”

Its Ethereum product, Grayscale Ethereum Trust (ETHE), has 29.6 million shares outstanding currently compared to just 5.2 million at the end of 2019. In 3Q20, it recorded inflows of $204 million, an increase from $20 million in 4Q19.

As per the company’s report, in the third quarter of this year, more than 17% of inflows into the Grayscale Ethereum trust came from new institutional investors.

Interestingly, ETHE is trading at a premium of about 120%, up from 18% in October but down from 950% in June this year. In comparison, Grayscale Bitcoin Trust (GBTC) is currently trading at a premium of 27.5%, which was 17% at the beginning of this year and the highest in May 2017 at 132% per Ycharts.

Earlier this week, Grayscale also announced a 9-for-1 split for its ETHE shares.

ETH’s 352% YTD gains beat Bitcoin’s 165% when it comes to the price of the digital assets. Ether is currently trading around $600, well off its January 2018 all-time high of about $1,430.

Ethereum “appears to be maintaining platform leadership status,” according to Bloomberg Intelligence strategist Mike McGlone.

On Dec. 1st, ETH achieved a significant milestone as phase 0, the Beacon Chain, went live; this is the first step in achieving scalability and reduced cost. Not to mention the wild world of decentralized finance (DeFi) with a total value locked of $14.5 billion.

“The development of the asset class has continued to solidify itself,” Sonnenshein said. “Ethereum has along the same lines of the staying power Bitcoin has.”

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Author: AnTy

Ethereum Exchange Reserves on a Sharp Decline While Locked ETH Continues its Uptrend

Activity on the second-largest network is thriving.

Since early this year, daily transactions on Ethereum have been growing, hitting an all-time high last month. Although it has come down some as DeFi mania cooled down, daily transactions are keeping to July-August level.

Ethereum fees have also gone back to normal levels as the DeFi rush came to an end, which in August sent average fees to $10 for the first time, bringing Ethereum’s scaling issues into glaring light.

With the upgrade coming up to keep the fees down for another potential growth spurt, it “would mean less demand for the token because people would need to buy fewer coins to do the same operations. From developers to end-users, it will largely reduce the buying pressure,” wrote analyst Mati Greenspan.

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Moreover, as per Glassnode, the popular stablecoin Tether transaction volume on Ethereum also saw a 20% spike over the past 30 days. It reached a new milestone of $600 billion.

“Tether’s important role in the digital asset ecosystem… If you were to add tether’s usage on other chains such as Tron, Omni, and Algorand, the headline figure would be higher still,” said Paolo Ardoino, CTO at Tether and its sister company crypto exchange Bitfinex.

Out of the total supply of $16 billion, USDT’s supply on Ethereum has also exceeded $10 billion, representing nearly 65% of the Tether token supply on a blockchain.

7.6% of ETH’s Total Supply Out of the Market

Amidst this growing activity, Ether’s amount on exchange wallets has been declining ever since May, as per Crypto Quant. Ethereum exchange reserves have fallen to 11.8 million ETH from the mid-May high of 14.14 million ETH.

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This trend coincides with the ETH that hasn’t been moved in over a year, which has reached 60%.

Additionally, 8.7 million of ETH are currently locked in the decentralized finance (DeFi) sector, as per DeFi Pulse.

“7.6% of ETH’s total supply is currently locked in the DeFi ecosystem. The amount of ETH locked in DeFi increased by a record high of 3.3M in September and has grown by 5.6M in 2020. That’s 2M more than the total supply of ETH has increased this year,” as per The TIE.

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The only factor lagging is Ether’s price, which is currently trading around $380, up only 188% YTD and still down 75.76% from its ATH.

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Author: AnTy

Ethereum’s Sister Chain Is Getting Hot as Second-Largest Network Becomes a Whale Game

Ethereum’s Sister Chain Is Getting Hot as Second-Largest Network Becomes a Whale Game In the past month. The Ethereum fees have skyrocketed as DeFi protocols and ‘yield farming’ platforms gained extensive popularity. Just this week, the Ethereum network faced congestion of an extreme level never seen before.

On Wednesday, with the launch of the much-anticipated UNI governance token of Uniswap, the second-largest network saw a spike in daily transaction fees. The daily Ethereum’s average fees went as high as $11.61, marking the highest fee hike since the SUSHI saga earlier this month.

What this means is, the network has become almost impossible for small market participants to enjoy. Instead, it has become a whale game.

“While the smaller and less efficient market participants may be struggling, the larger firms that can capitalize on inefficiencies,” said Denis Vinokourov of Bequant.

This has brought the solutions like zk-Rollups and the sister chain of Ethereum xDai in the limelight.

True Defender of Ethereum’s Value Proposition

Gnosis, the prediction market firm, has already moved on to the Ethereum sidechain, xDai, which has been in operation for the last two years.

“To ensure high demand doesn’t mean low adoption, we’ve teamed up with xDai, an Ethereum sidechain designed for fast and inexpensive transactions, providing a developer-friendly environment that retains real-world economic incentives,” said Gnosis in its announcement about the partnership.

Just this week, data privacy and protection platform HOPR, P2P lending & marketplace EthicHub, Sablier, Ethereum-based privacy-focused multi-contract 0xMonero, prediction market Reality Cards, and The Commons Stack have joined Dai.

This proof-of-stake chain enables fast transactions for a minimal amount, just fractions of a penny. With stablecoin DAI as its core currency, the cost involved in these transactions is predictable and not highly volatile. In the case of xDai, users entrust their assets to a multi-sig controlled xDai bridge.

Being EVM compatible means any smart contract or Dapp deployed on Ethereum can also be deployed on xDai with minimal changes.

It is also planning to onboard a fiat-to-crypto option in the next quarter, which means one wouldn’t’ have to interact with Ether at all.

“Ethereum little sister xdaichain is getting hot. XDAI is the true defender of Ethereum’s value proposition before a fully functional ETH 2.0, can easily K.O stuff like BSC (sorry @cz_binance),” tweeted Dovey Wan, founding partner at Primitive Crypto.

ETH 2.0 takes the First Step Towards Launch

ETH 2.0, meanwhile is ready for its first step towards launch after core developer Danny Ryan submitted, a proposal for its critical phase.

Ethereum co-founder and the creator of Cardano meanwhile, found Gasper to be “insecure.” “Discovered a liveness attack on Gasper in the standard synchronous model where messages can be delayed arbitrarily by the adversary up to a known network delay bound….” he said.

Dubbed “Serenity Phase 0,” this proposal is responsible for bringing about the PoS consensus mechanism. The PoS chain called “Beacon Chain” will be built alongside the existing network.

However, it is just the first step of the 6-phase launch extending well into 2022, while Phase 1 is expected to be rolled out next year.

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Author: AnTy

Coinbase Pro to Launch Ethereum-based DeFi Project, UMA Protocol, on Tuesday

  • Coinbase Pro is set to add yet another decentralized finance token to its markets.
  • UMA Project ranks as the second-largest DeFi project in market capitalization on Coingecko.

After shocking the crypto world in its growth over the past two weeks, UMA Protocol’s native token, UMA, will be listed on Coinbase Pro starting September 4th. According to the launch statement on the Coinbase blog, the token will be supported in all jurisdictions the exchange operates – except New York State.

Coinbase has added a slew of decentralized finance (DeFi) products over the past few weeks as the ecosystem continues to blossom. Coins such as Compound (COMP), Maker (MKR), OmiseGo (OMG), Celo (CGLD) have been listed on the prestigious exchange deepening the liquidity further.

The listing of UMA, similar to the prior listings, will require a deep enough liquid base to launch on Friday, 4th September. If not, the listing will be pushed to 8th September 9 AM Pacific Time (PT).

The exchange will launch trading with UMA/BTC as the only crypto pair and three fiat currencies, i.e. USD, EUR, and GBP pairs. The order books will be released in four phases once the liquidity target is reached – transfer-only, post-only, limit-only, and full trading. A lack of liquidity or malicious trading activity can cause the UMA order book to remain in one stage for a more extended period, Coinbase statement reads.

UMA Project is a decentralized finance protocol that provides a platform to create synthetic assets on the Ethereum network. The official website states the protocol allows any two counterparties to create economically binding and self-enforcing financial contracts.

Coinbase disclosed they received airdropped UMA tokens from UMA Protocol’s parent company, Risk Labs, after an investment in the company back in 2018. The exchange plans to list more DeFi tokens and trading pairs in the coming days as the crypto market grows further.

UMA currently holds the second largest market cap on Coingecko’s decentralized finance list after an impressive 208% surge over the past week. Currently trading at $21.21, UMA has a total market capitalization of $1.3 billion with steady daily trading volumes of $65 million as of Thursday.

In May, BEG reported the UMA project launched an ETH-BTC synthetic token allowing trades of Ethereum relative to Bitcoin’s price.

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Author: Lujan Odera

Ethereum Suffers from Fundamentals Flaws — Is it the New Normal?

  • Markets remain bullish, especially Ethereum, despite the second-largest network continuing to suffer from the fundamental flaws — insanely high fees and clogged up the network.
  • Despite the rising fees, hitting ATH in both USD and ETH terms, ETH price is uptrending, reflecting people’s preference for Ether.

The fees on Ethereum had reached the highest since 2015 when it launched, surging past $7. More than 17,500, $6.8 million are currently being spent on fees daily on the network. Spencer Bogart, general partner at Blockchain Capital,

“Mempools are getting more competitive as value at stake for pending crypto tax increases. This increased competitiveness is a byproduct of increasing adoption and utility and likely part of a new normal.”

Soaring transaction fees means the daily profit of Ethereum miners is now at its highest point in 27 months. As per Bitinfocharts, the daily profitability of Ethereum miner operators is at $5.8 per 100 megahashes second (MH/s) of computing power — a level last seen in early May 2018.

Who Exactly is Responsible for Soaring Ethereum’s Fees?

No doubt, this spike in fees is caused by a high demand for space on-chain, with the median gas price at its all-time high of 217 Gwei and mean gas price even higher at 224 Gwei.

But users need to pay far more than the media gas to use the network effectively, and Etherscan is recommending gas price of over 350 Gwei for a 20 second wait time.

The reason is simple, “the anticipation of a bull market has created massive demand in all niches – large and small, familiar and arcane, dated and nascent,” notes Glassnode.

One reason for this massive demand for transactions on Ethereum is stablecoins, especially USDT, which is the second biggest gas guzzler, as per Etherscan.

In August, USDT transfers accounted for 14% of all fees spent, while other stablecoins account for just 1.2% of fees spent.

But the most significant gas guzzler belongs to the “other contracts” category, which accounts for more than 65% of all gas spent this month. This category covers DeFi, DEXs, and arbitrage bots.

Uniswap is the most significant contributor to Ethereum’s gas price spike, which is responsible for 39% of fees spent by the top 20 contracts this month.

Among these 20 contracts, arbitrage bots make up for almost 20% of fees, spending $2.5 million worth of ETH in gas.

Ponzi schemes also continue to be high fee payers, which takes the place of 2nd (Forsage.io) and 19th (Lionsshare.io) in most gas-intensive contracts this month so far, stated Glassnode in its report.

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Author: AnTy

Ethereum Longs Pushing Strong with Many Factors Backing Them But Shorts are also Strong

While altcoins are surging, the second-largest cryptocurrency has been relatively silent, not as much as bitcoin but pretty subdued still.

But things might change for Ether as well as the traders bet on an uptrend.

ETHUSD longs on Bitfinex have reached yet another all-time high. These longs have been surging for more than two years, since March 2018. Earlier this year, they went parabolic. In the past five months, they spiked more than 200%.

The notional value of ETH longs was $308 million in mid-March, which has now risen to $444 million.

In 2020, ETHUSD shorts also jumped but at a higher percentage than the longs at 393% in the past six months. But unlike longs, they are still far away from its all-time high in December 2018, as per TradingView.

For now, Ether is in the green barely while trading at $241. In the past seven days, it has spiked 7% and 89% YTD. Experts are expecting Ether to outperform Bitcoin in the near future.

Also, Ether’s implied volatility is moving up, and total open interest on futures is now near its peak.

Analyst Pentoshi also notes, “We are seeing the largest bullish divergence ever in regards to daily active addresses and price in Eths history. With DeFi, + 2.0, I can’t help but think the next year is going to be wild.”

Potential Ether Drivers

The seven-day moving average of the number of active Ether addresses has peaked to 405,014 — the highest level in two years, May 2018.

Active addresses are the unique addresses that are active as a sender or receiver on the network. While this week, this number is slightly down from last week, it is still up 115% from Jan. 30 low of 180,750.

This increased activity could be the result of Ethereum-based Decentralized Finance (DeFi) platforms and stablecoins, especially the daily USDT transaction on the network, which has increased by more than 400% this year.

Already, close to a record, 3.1 million ETH are locked in various DeFi projects. Moreover, $60 million worth of BTC moved to Ethereum last month, and Wrapped Bitcoin is responsible for about 75% of this growth.

Amidst this, the Dapp report shows Ethereum users doubled compared to the first quarter, and DeFi application Compound was the one responsible for this, which pushed the volume over $10 million in Q2 2020.

This heightened demand is expected by many to fuel Ethereum’s bull run.

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Author: AnTy

So Many Catalysts Calling for a Remarkable Bull Rally of Ethereum

The second-largest cryptocurrency network Ethereum has recorded 85% gains in 2020 so far as it trades at $243.

However, this might not be it for Ether and we may record more gains ahead given the number of factors fueling Ethereum growth.

“If ETH doesn’t go on a significant & idiosyncratic run over the next 6 months then I don’t see how it ever will,” said analyst Ceteris Paribus.

Increasing Gas Usage & Skyrocketing Fees

The network usage is already hitting new highs with blocks getting increasingly full over the last full weeks. To address this increase in block fullness, Ethereum miners have voted to increase the network’s gas limit by 25%.

Source: CoinMetrics

Network fees are also skyrocketing, in 2020 so far, the total network fees have jumped 848%.

Over the last two weeks, ETH actually flipped BTC in terms of daily transaction fees, the last time ETH fees topped BTC fees for at least 14 consecutive days was in July 2018. But ETH median fees between $0.47 and $0.65 are still lower than BTC’s which remains between $1 and $1.50.

Moreover, stablecoins are exploding and the majority of them are launched on Ethereum blockchain. Stablecoin issuance which is plugged to consumer demand has grown immensely in 2020 during the coronavirus pandemic just as the demand for USD has risen globally.

The total market cap of stablecoin has surpassed $11 billion while Tether is close to shooting past $10 billion. USDT is also one of the highest gas-consuming applications on Ethereum today.

DeFi Boon

The growing DeFi space is one of the bullish catalysts for Ether. Just recently, the total value locked in DeFi space jumped to a new high of $1.50 billion. The amount of ETH locked in DeFi has also jumped back to 3 million.

“As that outstanding ether supply comes down and demand from DeFi platforms hits escape velocity, ETH will rally hard,” is what John Todaro, head of research at TradeBlock believes.

Just last week COMP token prices skyrocketed which pushed the market cap of DeFi past $6 billion. When these tokens start crashing down, Ether and BTC are expected to pump.

DeFi boon is expected by many experts to result in profits to Ethereum.

The One Way Street of ETHE

Another immediate bullish catalyst is ETHE shares unlocking. The lockup period for the first batch of Grayscale ETHE shares has ended, with sellers bringing the premium down. Already it has declined by 44%. This is pushing some investors to buy spots to reissue shares.

“Float unlocking will depress premium, but if premium stays high, arb funds will dump ETHE on secondary and re-enter at NAV with new spot ETH,” Paribus said.

The reason why ETHE is a “meaningful driver” for Ethereum is that most deposits to this Grayscale product are borrows.

Avi Felman, head of trading at BlockTower explained that funds are borrowers of ETH placing the crypto asset into ETHE to create ETHE shares while lenders are long-term trying to get yield.

“Normally borrows are “created supply” as people borrowing usually short. In this case, there is no created supply as it gets locked in the trust instead of sold on the market,” he said.

Borrowers are still short ETH, a risk which gets shifted to ETHE products but they were locked down so when a sizable amount of ETH unlocked, it resulted in ETH prices shooting up.

The consistent spot demand and the arbitrage on ETHE will lead ETH further higher.

All the Bullishness

ETH 2.0 Staking is already garnering much attention with wallets with the required Ether for staking, 32 ETH, growing, and ready for staking.

Big names among the crypto exchanges, Binance and Huobi are already backing Consensys to test its new staking as a service offering for Ethereum 2.0.

The layer 2 scaling solutions also add to all the Ethereum bullishness with the fundamental structural shifts in the form of ETH 2.0 and EIP 1559 further creating “a strong bid” for Ethereum and a nice bonus down the line for Ethere prices.

As analyst Paribus said, “Everything is lining up. If it doesn’t happen now, when?”

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Author: AnTy

User Pays $2.6M to Transfer Just $130 Worth of ETH; By Far the Highest Fees Ever Paid

After climbing above $240, the second-largest cryptocurrency has slowed down and is keeping around this level.

The percent of Ether supply in profit, which is the percentage of calculating ETH whose price at the last time it moved on-chain was lower than the current price, is currently hovering at 80%.

It is the third attempt by ETH within a year to break this level. Last time the Ether’s supply in profit was significantly above 80% was when ETH was priced at about $700, noted Glassnode.

Source: Glassnode

“ETH/BTC really coiling for a move leading into 2.0 phase 0 shenanigans. Cloud leans bull (not shown) for first time since mid-2018. golden cross poss soon. 0.025 key res, 0.035 target. expect mETHeads to come out of the woodwork soon,” observed trader Josh Olszewicz.

Million Dollars Paid in Fees

For now, Ether is holding steady just like Bitcoin but lately, its daily fees have been surpassing the bitcoin fees, something that has happened only for 141 days (8%).

On June 6th, Ethereum recorded fees of $498,000 while Bitcoin recorded $308,000 in fees.

Today, in a surprising move Ethereum fees shot up to $2,599,329.83 within a single hour, by far the highest value ever seen.

This increase was because of a single transaction that spent 10,668.73185 Ether worth 2.59 million USD in fees to transfer 0.55 ETH worth just $130.

The gas fees were paid to SparkPool, a China-based ethereum mining pool that has frozen the fees and negotiation.

“My theory about these transactions is it is hackers who are laundering eth,” said Arpit Agrawal of Matic Network.

As for how they are guaranteeing that the partner mines the block, “sending a local tx to their node. i.e. not broadcasting it. Then the miner attempts to put that in every block they are mining,” he shared.

Back in 2018, a user was charged 236 ETH worth $122,086 in gas fees but it is nowhere near today’s record.

Increased Anticipation for ETH 2.0

Ethereum meanwhile has been seeing a surge in its usage this year with the number of new addresses involved in more than one Ether transfer grown significantly.

Those addresses that have made 3+ transactions have jumped 159% to 32,000. More than 100% increase has been seen by 5+, 10+, 25+, and 50+ transactions.

Moreover, investors are extremely excited about Ethereum staking, with now almost 120,000 Ether wallets ready for staking, as per Arcane Research. These addresses with more than 32 ETH, the requisite for staking, have grown 13% over the past year.

There is much excitement for the launch of Ethereum 2.0 though the switch to proof of stake has gone through several delays already. However, the upgrade is expected to be deployed as soon as next month.

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Author: AnTy

Ethereum Miners Busy Hoarding ETH at Record Levels But Exchange In-flows also on Rise

Bitcoin is surging and so are altcoins. The second-largest network is also enjoying a spike of 7.34% as Ether moves above $200. When it comes to YTD gains, Ether which recorded 60% gains is outperforming BTC which is up only 13.18%. Much of these gains, over 58% have been made in April.

This price increase has the number of Ethereum addresses in profit increased to 40%, the highest percentage number since early March.

Interestingly, roughly 17% of Ether supply 16.6 million ETH is held by 10 addresses while the top 10,000 addresses hold 91.7 million ETH. The top 1k addresses represent 70.7M ETH and 37.8M ETH are held by the top 100 addresses.

On removing the smart contracts, the distribution of ether supply shows the top 10,000 addresses hold 56.7% (over 57 million) of ETH in comparison to 57.44% of Bitcoin supply holding 10.54M BTC.

Only 16 of XRP addresses hold over 55% of XRP supply while 300 of Litecoin addresses hold 54.3% of its supply and 55.8% of BCH supply is held by 1100 addresses.

Meanwhile, the top 100 has 26.4 million ETH and the top 1,000 42.5 million ETH, analyzed venture capitalist Adam Cochran.

Interestingly, March was a record-breaking month for Ethereum as almost 2 million smart contracts were deployed on the Ethereum network.

Busy Accumulating Ether

Cochran who recently wrote about how ETH 2.0 could be “the largest economic shift in society,” has found another reason to be bullish on Ether based on top 10,000 Ethereum addresses.

The venture capitalist comes up with 44.6M ETH with roughly 9% of ETH inaccessible, there is 100 million ETH in circulation that is in a position to enter into staking after removing 80% of cold exchange funds and burned, lost, and locked ETH. And  ETH 2.0 will likely initially return 12%-17%+.

Whales are reportedly also busy accumulating, existing whales increased their position by 4% in the past 6 months, and during this period, new whales bought over $650 million.

“We were also able to identify wallets associated with major players such as JPMorgan Chase, Reddit, IBM, Microsoft, Amazon, and Walmart,” and all of them are accumulating ETH, he said.

Miners are also busy hoarding, they accumulated 1.15 million in the past 6 months. Cochran said,

“We’ve never seen such a rapid increase in miner hoarding on ETH. Ever.”

“It seems likely that as we edge closer to Phase0 roll out, ETH miners are getting ready to convert mining operations into staking operations.”

While miners are looking bullish on Ether’s future, DeFi has plenty for a room to grow as well with the majority of $800 million locked in DeFi coming from individual micro-accounts.

However, exchanges’ Ether deposits grew by 5x in the past 6 months. It is the leading early indicator of mass sell-off but this time, the price rose, unlike the last three times when Ether price fell over 40% in the one-month span of the deposits increasing by 4-5x, so that’s a point of concern for now.

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Author: AnTy

21Shares’ Short Bitcoin ETP (SBTC) Listed on German Stock Exchange, Boerse Stuttgart

On February 25, Boerse Stuttgart, the second-largest stock exchange in Germany, announced it had begun listing exchange-traded products (ETP) that are inversed with the Bitcoin’s (BTC) swings in price.

This Bitcoin ETP will be issued by 21Shares, the cryptocurrency fund manager previously known as Amun. It offers a positive return for investors whenever BTC prices fall, for a daily management fee.

Besides, it has already been listed on SIX Swiss Exchange, one of Switzerland’s most important stock markets. Through Boerse Stuttgart, which boasted €68.5 billion in trading volume in 2019, it’s expected to reach a wider base of investors.

German Investors Very Supportive of Crypto Offerings

According to The CEO, Hany Rashwan, 21Shares’ Short Bitcoin ETP (SBTC) has been developed thanks, in part, to the immense support of German investors towards crypto offerings previously.

Currently, SBTC trades in euro and is fully 1:1 hedged with the underlying asset that corresponds to it.

The ETP has also been provided with the WKN: A2781V German securities identification code. The 21Shares team has also announced its PD3 Prospectus Regulation approval by the Swedish Financial Supervisory Authority.

The company’s managing director made a statement in which he referred to this approval as a milestone for both the crypto and traditional investment communities; opening up crypto ETP products to institutional and retail clients not only from Germany but from all over Europe too.

Rashwan Aims at Offering a Regulated Asset in a Market Dominated by Unregulated Ones

Rashwan has said that while the demand for crypto derivatives growing, many of the options and futures products nowadays are built mostly in unregulated regions, causing both retail and institutional investors to be put off.

Back in 2019, when 21Shares was called Amun, it closed a partnership with Bitwise, the crypto asset manager, on a multi-crypto ETP that tracks the performance of up to 10 cryptos and their SIX Swiss Exchange listings.

In the past, Boerse Stuttgart closed a partnership with Axel Springer, the European digital publishing giant, and Finanzen.net, in order to launch a blockchain-based trading venue that rolls out a zero-fee trading app for crypto.

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Author: Oana Ularu