India has been among the countries still deliberating a ban over cryptocurrencies. Recently, the Securities and Exchange Board of India [SEBI] noted issues with promoters holding crypto and asked them to sell it before raising money through an initial public offering [IPO].
According to reports, Sebi communicated this decision to merchant bankers, securities lawyers, and company executives involved with the IPO process.
According to a prime securities lawyer who is working on the large IPOs:
“There could be a direction from the government in this regard. The market regulator seems to think that this could become a risk for investors if a promoter holds an asset that is illegal in the country.”
There has been a lack of clarity over the suggested ban on cryptocurrency for years and whatever has been communicated has been done informally. The major concern for Sebi is that the funds that are raised through IPOs should not be used for buying and selling illegal assets.
According to reports:
“In cases where companies are yet to file a draft red herring prospectus (DRHP) or promoters want to hold on to such assets, legal experts are said to have come up with a temporary solution — an affidavit stating they will sell any cryptocurrency they hold within 24 hours if the government bans it.”
Despite the worry about the funds generated through an IPO, many believed that holding crypto should not be a red flag. According to Vatsal Gaur, partner, Pier Counsel, holding crypto does not necessarily expose the company to any risk. It is similar to holding any other financial assets which are free of risk to the operations of the listed company.
Gaur further added:
“…it’s always possible to migrate the holding of a crypto asset overseas, or to be transferred to an affiliate. Either way, it seems that the regulator is being over cautious here and it appears like a case of overreach.”
The price of Bitcoin has been reaching new heights and the current peak was observed at $57k. While some other countries are trying to regulate the field, India is seen to likely to follow the steps of Nigeria if a ban is announced. With increased awareness and interest India is likely to face more difficulty in banning cryptocurrencies if it pursues that route.
The world of decentralized finance [DeFi] exploded in 2020 as crypto caught the attention of the mainstream. It was looked upon as a good diversion for assets especially when the crypto market was going through a consolidation phase. The increased use of DeFi enabled aggregators to reach users who wanted cost-effective trades and according to recent reports the popularity of aggregators will only rise in 2021.
According to Delphi Digital’s latest report, the year-to-date growth for DeFi aggregators in 2020 could be dwarfed by the growth we might see in 2021. According to this, the aggregators had a breakout year in 2020, with platforms like 1inch Exchange and Zapper recording significant growth.
The need for decentralized finance aggregators increased due to the growing market volatility and a higher need for liquidity. Liquidity has been the lifeblood of the decentralized finance market and as protocols began competing on technical and capital efficiency, the need for specialized aggregators also grew.
A DeFi aggregator provides users with a one-stop place to get the best rate available for their token swap by collecting information and prices from various exchanges. According to Delphi Digital, platforms like 1inch, Matcha, and Paraswap contributed a total of $9.3 billion in volume in 2020. However, 2021 has seen the volume boost especially for the 1inch exchange that noted $10 billion in volume year-to-date.
The report stated:
“If liquidity aggregators gain further usage, investors may be forced to re-think their theses. For example, aggregators like 1inch are looking for the best price and don’t care about the UI/UX of the underlying protocols. In many cases, under-utilized liquidity sources like Kyber and Bancor stand out on aggregators by offering less slippage on bigger orders for certain pairs.”
In short, in an aggregator-centric world, the protocols with better capital efficiency but less direct adoption will grab the spotlight. The DeFi ecosystem has been looking forward to more adoption and aggregators could play an essential role in getting new users this year.
North America’s first Bitcoin exchange-traded fund (ETF) has seen impressive results on its first two days of trading, following its recent approval by Canada’s securities regulatory body.
Purpose Bitcoin ETF started on a flying note shortly after it began trading on Thursday (Feb. 18, 2021) under the ticker symbol “BTCC” on the Toronto Stock Exchange (TSX).
Following its TSX debut, the fund has already accumulated $421 million in assets within the first two days of trading.
According to Bloomberg ETF analyst Eric Balchunas, the Purpose Bitcoin ETF’s performance surpassed analysts’ estimates, adding that “if it were to keep up this pace, it will be the biggest ETF in Canada in 20 days.”
STUNNING: The Canada Bitcoin ETF $BTCC already has collected $421m in assets first two days (crushing our estimate). Proportionally speaking it is the equiv of a US ETF taking $8b in first two days. If it were to keep up this pace it will be the biggest ETF in Canada in 20 days. pic.twitter.com/ESIMIiy7qy
— Eric Balchunas (@EricBalchunas) February 20, 2021
Balchunas also opined that BTCC could amass $1 billion in assets by the end of next week.
As previously reported by CryptoPotato, Canada’s Ontario Securities Commission (OSC) approved a filing by Purpose Investments to launch a bitcoin ETF. The Purpose Bitcoin ETF, which is an alternative mutual fund, invests in bitcoin, enabling investors to buy the number one asset with Canadian or US dollars.
Meanwhile, the OSC also gave the approval to Evolve Funds Group to launch its Bitcoin ETF, giving more institutional investors exposure to bitcoin.
Evolve later announced on Friday that its Bitcoin ETF started trading on the TSX under the ticker symbol “EBIT.”
Canada now has two Bitcoin ETFs, with more possibly on the way. Canadian investment firm CI Global Asset Management, a subsidiary of CI Financial, and crypto asset management company 3iQ both filed a preliminary prospectus for a Bitcoin ETF. Both companies already operate Bitcoin Funds.
However, the US Securities and Exchange Commission (SEC) is yet to green light any Bitcoin ETF proposals.
The cryptocurrency market has been moving at a great pace while many countries are trying to either catch up or curtail the use of Bitcoin. The Central Bank of Nigeria [CBN] was among the latter, who tried to ban the use of digital assets within the country.
On 22 February when the value of Bitcoin dipped briefly to $55k in the spot market, Nigeria was seeing a premium of 49% on BTC. This high premium resulted in the value of Bitcoin reaching close to $85k in the Nigerian market. Meanwhile, other countries such as South Africa and Malaysia were seeing a premium of just 4% and 4.01%, at the time of writing.
Interestingly, data suggests that Nigeria has been one of the best-performing countries in terms of crypto activity in 2020. The Bitcoin trading volume in Africa has been among the fastest-growing volumes in the world, with Nigeria leading the race. As per a report published by Blockchain.com, the country witnessed a 60% increase in usage of its wallet service since April 2020.
Meanwhile, the Google Trends data also suggested that Nigeria was leading in terms of Bitcoin interest over the past 90 days.
Whereas other regions like Austria, Switzerland, and Slovenia were not far behind.
Despite the ongoing feud regarding the Bitcoin ban, crypto operations in the country have been impacted. Reports suggested that the deposit on the Naijacrypto exchange dropped by 80% on the day the announcement of the ban was made. The ban has resulted in many banks discouraging crypto transactions and this has to led deposits taking a hit.
However, this ban is still under review, and users in the country will be looking forward to and hoping for the ban to be lifted, given the popularity of cryptocurrencies in the country.
