SEC drops investigation into Ethereum's status as a security

The SEC has closed its investigation into Ethereum 2.0, confirming that ETH is not a security and would thus face no charges. This decision is a win for Ethereum developers and businesses. It provides much-needed clarity and paves the way for further innovation and adoption in the Ethereum ecosystem.

On the markets side, BlackRock CIO Samara Cohen revealed that about 80% of Bitcoin ETF purchases since their launch in January have been made by “self-directed investors” through online brokerage accounts. This trend shows the growing interest and participation of retail investors in the crypto market, although it also raises concerns about the potential volatility and short-term thinking associated with this investor segment.

On the regulatory front, Uphold, a New York-based crypto exchange, will discontinue support for several stablecoins. This includes USDT, DAI, and Frax Protocol (FRAX) in anticipation of the upcoming Markets in Crypto Assets (MiCA) regulation. Once implemented, MiCA is expected to affect the current USD-dominated stablecoin market, with euro-backed stablecoins likely to thrive better under the new rules.

Today’s Newsletter

• SEC drops investigation into Ethereum’s status as a security
• Majority of Bitcoin ETF buyers are individual investors, not big players
• Uphold announces phaseout of stablecoin support as MiCA regulations loom

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ETHEREUM

SEC drops investigation into Ethereum’s status as a security

The SEC’s decision to close its investigation into Ethereum 2.0 without pursuing legal action is a major milestone for the crypto industry. It not only affirms that ETH is not a security but also removes a significant source of uncertainty that could have hindered the development and adoption of Ethereum-based projects.

This news is a cause for celebration, as it validates the decentralized nature of Ethereum and reinforces the belief that the network is a fundamental infrastructure for the future of finance and beyond. The SEC’s stance also sets a precedent that could benefit other decentralized networks and tokens, providing a clear path for their growth and mainstream acceptance. [ cryptobriefing ]

BITCOIN

Majority of Bitcoin ETF buyers are individual investors, not big players

This revelation challenges the prevailing notion that Bitcoin ETFs would lead to increased institutionalization of the crypto. As Wall Street veteran Jim Bianco points out, self-directed investors are more likely to exhibit “paper hands” behavior, selling their holdings during market downturns, compared to TradFi institutions.

Bitcoin ETFs have raised questions about the role of crypto in finance. Some worry that ETFs are taking money away from crypto rails, making it harder for it to become part of a new financial system. JP Morgan data shows that $13 billion has left digital wallets since the ETFs launch, suggesting that most of the $16 billion inflows into Bitcoin ETFs come from existing digital wallets, not new institutional investors. [ cryptobriefing ]

REGULATION

Uphold announces phaseout of stablecoin support as MiCA regulations loom

Uphold’s decision to discontinue support for several stablecoins in anticipation of the MiCA regulation highlights the significant impact that the new rules will have on the crypto industry in the EEA. As exchanges adapt to the changing regulatory landscape, stablecoin issuers will need to obtain licenses as Electronic Money Institutions (EMIs) or credit institutions to operate within the EU.

For crypto enthusiasts, this development underscores the importance of staying informed about the changing regulatory environment and its potential effects on their investments. While euro-backed stablecoins are expected to thrive under MiCA, the future of other stablecoins remains uncertain. [ cryptobriefing ]

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