Hong Kong Pushes Pro-Crypto Policies, and ETF Flows Fuel “Uptober” Rally - October 29, 2024

Also, FTX settles lawsuit with Bybit, and BTC rise to $70K.

TL;DR: Crypto Insights in Seconds

• Hong Kong: New consultative panel and potential tax incentives aim to boost Hong Kong’s crypto industry.

• Spot Bitcoin ETF: October ETF flows show robust institutional interest.

• FTX: Settle lawsuit with Bybit in $228 million agreement.

• AUSD: Mantle launches Agora's AUSD stablecoin.

• Lido DAO: Approves Community Staking Module (CSM) on Ethereum mainnet.

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Price Update 

Bitcoin Tops $70K for the First Time Since June

Bitcoin has broken past $70,000, reaching its highest price in over four months, thanks to a combination of strong ETF inflows and heightened institutional demand. Analysts are optimistic about the pre-election rally, suggesting that political factors and market sentiment could push Bitcoin toward new highs. However, some caution that a potential sell-off may follow the U.S. election as speculative momentum wanes.

Market Trends

Spot Bitcoin ETFs Drive October’s Rally

Despite Bitcoin's modest 3% October gain, crypto funds saw substantial inflows, with $3.36 billion invested in digital asset products this month. This pushed total inflows to 12% of assets under management, marking a near-record high and a year-to-date total of $27 billion. Wall Street’s adoption, through spot ETFs and tokenized products, indicates crypto's cementing status as a recognized asset class.

Analysts Warn of Potential Post-Election Bitcoin Sell-Off

While Bitcoin’s current rally appears solid, some analysts are warning of a potential post-election sell-off, suggesting that market enthusiasm may fade once the U.S. election concludes. The pre-election surge has been partly fueled by optimistic polling for Republican candidates, who are generally seen as more favorable to crypto regulation, which has, in turn, increased crypto fund inflows.

Regulatory Updates

Hong Kong Boosts Crypto Industry with Consultative Panel and Tax Breaks

Hong Kong’s Securities and Futures Commission (SFC) is creating a consultative panel specifically for licensed crypto exchanges, looking to improve industry oversight and collaboration. Additionally, Hong Kong officials are exploring tax breaks for crypto firms and plan to issue more trading platform licenses by the end of the year, strengthening its position as a crypto-friendly jurisdiction.

Business News

FTX and Bybit Settle Lawsuit in $228 Million Agreement

FTX has reached a $228 million settlement with Bybit, agreeing to drop its lawsuit against the crypto exchange. This resolution ends a significant legal dispute for FTX, which is in the process of addressing claims from its creditors following its high-profile bankruptcy​.

Mantle Launches Agora's AUSD Stablecoin on Its Ethereum Layer-2 Network

Mantle, known as the platform behind the Ethereum layer-2 Mantle Network and the liquid staking derivative mETH, has introduced Agora’s AUSD stablecoin on its platform. Backed by cash, U.S. Treasury bills, and overnight repo agreements, AUSD is designed to provide strong on-chain liquidity. Initially, AUSD will be available on Mantle’s decentralized exchange, Merchant Moe, with liquidity pairs in assets like $mETH, $cmETH, and $FBTC, enabling smooth transactions from launch.

Lido DAO Approves Community Staking Module (CSM) on Ethereum Mainnet

Lido DAO has approved the activation of its Community Staking Module (CSM) on Ethereum Mainnet, which initially will be available to Early Adoption participants before expanding to full, permissionless access. The CSM strives to attract independent stakers by reducing the bond requirement to 2.4 ETH, or 1.5 ETH for early adopters, lowering barriers for solo staking. The module allows community members to join as Node Operators, provided they can run validators per Lido’s policies. This initiative aligns with Vitalik Buterin’s vision of promoting more solo stakers to improve network security.

Bitcoin’s jump to $70K underscores the positive momentum in crypto markets, led by ETF inflows and optimistic investor sentiment. As Hong Kong rolls out new pro-crypto initiatives, it highlights the global drive to support the digital asset ecosystem. However, with the U.S. election on the horizon, analysts are preparing for potential volatility. As the market evolves, being informed and adaptable is crucial for investors and participants. Stay tuned for tomorrow’s newsletter to get the latest insights and updates in the market.