The markets are in a slow, with Bitcoin (BTC) The price dip below the $ 100,000 threshold. Despite a downward correction in the markets, institutions continue to adopt digital assets in their operations.
In the US, a major digital trading platform and Chartered Bank have opened up crypto trading to institutional clients. The Singapore Exchange’s derivatives arm is also getting into digital assets, also opening up perpetual crypto futures trading.
Policy changes allow some companies to offer crypto exchange-traded products (ETP), expanding the availability of crypto-related financial products.
Markets are taking a beating this week, but institutions are looking long-term and expanding their role in the crypto industry.
Corporations now control 14% of the Bitcoin supply
Institutions that offer Bitcoin-related products, as well as public and private companies that hold Bitcoin on their balance sheets, increased corporate BTC holdings to 14% of the 21 million crypto supply.
This figure does not include significant holdings boasted by Bitcoin mining companies, sovereign nations such as El Salvador and decentralized financial protocols.
Increasing concentration of bitcoin supply in the hands of a small number of corporations has Raised centralization concerns. Crypto analyst Willy Woo says bitcoin is on the same “nationalization path” as gold in the 1970s.
Related: The corporate purchase washes over the debate over Bitcoin’s long-term decentralization
However, Nicolai Søndergaard, a research analyst at Crypto Intelligence Platform Nansen, previously told Cointelegraph that people should not worry.
“This does not change the basic characteristics of Bitcoin. The network remains decentralized even as custody becomes more centralized,” he said.
Sofi to roll out crypto trading
Digital Financial Services SoFi announced on November 11 that it is Rolling out crypto trading for retail clients in the US.
CEO Anthony Neno said Sofi is the only nationally chartered bank offering crypto trading services. He said the company is more comfortable offering digital asset-related services after updated rules from the US Office of the Comptroller of the Currency (OCC).
“One of the loopholes we’ve had in the last two years is in cryptocurrency, the ability to buy, sell and hold crypto. We’re not allowed to do that as a bank. It’s not allowed,” he said.
But in March, the OCC relaxed its rules regarding crypto and banks, saying, “crypto asset custody, certain stablecoin activities, and participation in independent node verification networks such as distributed ledgers are permitted for national banks and federal savings associations.”
The Singapore Exchange is launching perpetual futures
The Derivatives Arm of the Singapore Exchange (SGX) announced that it will launch perpetual futures Trading on November 17.
An announcement from the exchange links its new offering to “increasing institutional crypto demand, converting tradfi and crypto-native ecosystems.”
Bitcoin and ether (Eth)-Based Perpetual futures on SGX are only available to accredited and specialized investors. They will launch on November 24 and fall under the regulatory regime of the Monetary Authority of Singapore (MAS).
This is only the second launch of Perpetual Futures Trading in Singapore. On July 23, EDXM International launched Perpetual Futures Trading as well as 44 different trading products. Perpetual futures, which allow traders to bet on asset prices without an expiration date or close to the market and with the potential for high leverage, are one of the most popular forms of crypto trading worldwide.
Institutional staking takes a step forward with IRS approval
The US tax enforcement agency, the Internal Revenue Service, has approved rules that will allow Crypto ETPs to stake digital assets and share rewards with investors.
Specifically, it is Allow “Trust exchanges that hold a single digital asset such as Ethereum (‘Digital Asset ETPS’) to earn staking rewards while maintaining tax classification as a Grantor Trust.”
According to Roger Wise at the law firm Willkie Farr & Gallagher, provider status is particularly important for easing tax reporting in ETPs.
Announced on November 10, Treasury Secretary Scott Bessent said the move would improve innovation and help make the US more competitive in the crypto industry. “Digital asset ETPs avoid tax at the entity level and provide an attractive vehicle for retail investors, receiving simplified tax reporting each year similar to reporting an ETF or mutual fund.”
The move brings more certainty to institutions that want to offer staking ETPs, especially amid increased demand from investors.
Related: Hawkish Fed triggers $360m in crypto outflows as Solana ETFS Buck Trend
Hong Kong is launching more blockchain bonds for institutional investors
The Hong Kong Government has released its third blockchain bond offering. Announced on November 11, the Tranche of Bonds is valued at 10 billion Hong Kong dollars ($1,284,438).
The bonds, which are denominated in Hong Kong dollars, Renminbi, US dollars and euros, are reportedly popular with institutional investors. According to the Hong Kong Monetary Authority:
“The issuance went on to attract subscriptions by a wide spectrum of institutional investors worldwide, covering asset managers, banks, insurance companies, private banks and others, including a large number of first-time investors in digital bonds.”
The markets may be in a rough patch, but institutions are looking ahead as new financial products, built on blockchain technology and cryptocurrencies, continue to evolve.
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