Nasdaq-listed cryptocurrency exchange Coinbase has thrown its weight behind Grayscale Investments' application to convert its Ethereum Trust into a spot Ether exchange-traded product (ETP).

Options contracts for Bitcoin are suggesting a potential surge in price following the upcoming halving event, according to an analyst who inferred the sentiment from the positioning of strike prices and the put-call ratio for options expiring in June.

Hong Kong’s government has reaffirmed its commitment to advancing legislation for the regulation of stablecoins and digital asset over-the-counter (OTC) trading services.

Top stories in the Crypto Roundup today:

• Coinbase Backs Grayscale’s Ethereum ETP Bid
• Bitcoin Options Signal Bullish Outlook After Halving
• Hong Kong Reaffirms Plan to Regulate Stablecoins and Crypto OTC Trading Services
• Total Stablecoin Market Cap Reaches Highest Level Since Start Of 2023 

Coinbase Backs Grayscale’s Ethereum ETP Bid

Nasdaq-listed cryptocurrency exchange Coinbase has thrown its weight behind Grayscale Investments' application to convert its Ethereum Trust into a spot Ether exchange-traded product (ETP).

In a 27-page letter submitted to the Securities and Exchange Commission (SEC), Coinbase outlined several key arguments supporting the approval of the ETP. Central to Coinbase’s argument is the classification of ETH as a commodity, not a security, as reflected by the approval of Ether futures by the Commodity Futures Trading Commission (CFTC), SEC officials’ statements, and court rulings.

Beyond that, Coinbase emphasized the inherent security of Ethereum’s Proof-of-Stake consensus algorithm, arguing it demonstrably mitigates the risk of fraud and manipulation through its decentralized structure, distributed ownership, and robust liquidity.

Drawing parallels with the recently approved spot Bitcoin ETFs, Coinbase contends that the rationale for their approval applies equally, if not more strongly, to an Ethereum ETP. The exchange pointed to the Ethereum market’s liquid and dispersed nature, with tight spreads indicative of its maturity and efficiency.

Additionally, they argue that the close correlation between Bitcoin and Ethereum futures ETFs renders it arbitrary for the SEC to approve one but not the other, while underscoring the network’s security mechanisms and their ability to limit manipulation and fraud.

Finally, Coinbase emphasizes its own robust market surveillance capabilities and its existing agreement with the Chicago Mercantile Exchange

Bitcoin Options Signal Bullish Outlook After Halving

Options contracts for Bitcoin are suggesting a potential surge in price following the upcoming halving event, according to an analyst who inferred the sentiment from the positioning of strike prices and the put-call ratio for options expiring in June.

Luuk Strijers, Deribit's Chief Commercial Officer, said that the positioning of strike prices and the put-call ratio for June point towards optimism among investors. For June, the put-call ratio stands at a notably low 0.28, compared to 0.55 for March, signaling a stronger bullish sentiment for the post-halving period.

A put-call ratio below 1 indicates a predominance of calls (bets on price increases) over puts (bets on price decreases), suggesting that investors are leaning towards an uptick in Bitcoin's price.

Strijers pointed out that for the June 28 expiry, there's a noticeable concentration of call options with strike prices ranging from $60,000 to $75,000. This clustering around higher strike prices suggests that many in the market anticipate or are positioning for Bitcoin to breach the $60,000 mark after the halving event.

Additionally, the March expiry also shows a significant number of calls at the $60,000 strike price. However, Strijers interprets this as traders speculating on potential price volatility as the halving event nears.

Hong Kong Reaffirms Plan to Regulate Stablecoins and Crypto OTC Trading Services

Hong Kong’s government has reaffirmed its commitment to advancing legislation for the regulation of stablecoins and digital asset over-the-counter (OTC) trading services.

This comes after the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) launched a public consultation in December to discuss the regulation of stablecoin issuers. The FSTB also launched a consultation on licensing OTC trading services earlier this month.

Christopher Hui, the Secretary for Financial Services and the Treasury, indicated that the government plans to introduce the necessary bills for these licensing regimes to the Legislative Council “as soon as applicable.”

Hong Kong, a special administrative region of China, is aligning its regulatory approach with global trends by tightening oversight of the cryptocurrency sector. The city has also been active in setting guidelines for crypto custodial services and is considering the approval of a spot bitcoin exchange-traded fund (ETF).

Total Stablecoin Market Cap Reaches Highest Level Since Start Of 2023

As of February 16th, the total market capitalization of stablecoins experienced a 1.95% increase, reaching $138 billion. This rise represents the fifth month of consecutive growth and the highest market capitalization for stablecoins observed since the beginning of 2023.

In terms of trading volume, January saw a 4.54% increase in stablecoin trading, with volumes hitting $1.04 trillion on centralized exchanges (CEXs), the highest since December 2021. February is poised to surpass this, with trading volumes already reaching $440 billion on CEXs by mid-month.

Despite this growth in market capitalization and trading volume, stablecoins’ market dominance has seen a decline to 7.09% from 8.15% in January. This marks the sixth consecutive month of decline and the lowest dominance level since December 2021.

Dig deeper into the stablecoin sector through CCData’s latest Stablecoins & CBDCs report.

State of the Crypto by Top Tier Exchange Volume

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