Florida Governor Ron DeSantis Proposes Creating a Cryptocurrency Payment System for State Fees

The American politician and attorney serving as the 46th governor of Florida, Ron DeSantis, announced the state’s 2022-23 budget proposal last week and proposed an idea to let businesses pay state fees with crypto assets. The governor’s “Freedom First Budget” suggests creating a department in Florida to accept state fees in cryptocurrencies.

Florida Governor’s Freedom First Budget Includes Crypto

The Republican governor of Florida, Ron DeSantis seems to be keen on allowing businesses in Florida to pay for state fees in crypto assets. Florida is becoming well known for its politicians who are positive about the digital currency economy as Miami Mayor Francis Suarez has been very vocal about supporting bitcoin. Suarez gets a portion of his salary in BTC and recently announced he plans to take a fraction of his 401k retirement plan and convert it into bitcoin.

A report published by Fortune says DeSantis has explained in recent times that he wants the Florida state government to become “crypto-friendly.” “Florida encourages cryptocurrency as a means of commerce and furthering Florida’s attractiveness to businesses and economic growth,” DeSantis wrote in Florida’s 2022-23 budget proposal.

During His Speech in Tallahassee, DeSantis Discussed Leveraging Blockchain Pilots to Bolster State-Operated Departments

DeSantis also spoke about the budget proposal in a speech on Thursday in Tallahassee. “Our view as the state government is this is something that we welcome and we want to make sure that the state government is crypto-friendly,” the Florida governor remarked. In addition to Miami’s Mayor Francis Suarez, crypto businesses like Blockchain.com, Etoro, and FTX have locations in Florida and Miami.

During his speech in Tallahassee, DeSantis also discussed blockchain technology. The Florida governor explained that the state aims to launch pilot programs that tether distributed ledger technology to state-operated entities like Florida Highway Safety and Motor Vehicles, and Medicaid payments. While DeSantis has officially launched his bid for reelection as the state’s governor, there are rumors DeSantis may run for president of the United States in 2024.

What do you think about Ron DeSantis proposing that Florida businesses could pay state fees with crypto assets? Let us know what you think about this subject in the comments section below.

Fan token market cap surged over 60% since June: Data

All fan tokens across Socios and Chiliz’s fan token ecosystem have sold for $250 million so far, founder and CEO said.

The fan token market has been growing in value this year, surging around $157 million in terms of total market capitalization since June.

According to data from major fan token website FanMarketCap, the market cap of all fan tokens is estimated to amount to slightly over $417 million at the time of writing. This is almost 60.4% up from the overall value of $260 million recorded in mid-June 2021, as Cointelegraph previously reported.

The fan token market’s daily trading volume amounts to $270.2 million at publishing time.

According to FanTokenStats, some of the most-valued fan tokens include Paris Saint-Germain (PSG) and Manchester City (CITY) issued by major fan token provider Socios and based on the Chiliz blockchain infrastructure. While PSG’s market capitalization is valued at just over $49 million, CITY’s market cap is at $38 million.

Binance, the world’s largest cryptocurrency exchange, is also a major fan token player, launching its own fan token platform in October 2021. Running on Binance’s token launch platform Binance Launchpad, the Lazio Fan Token (LAZIO) is among the biggest fan tokens with a market cap of roughly $51 million, according to FanTokenStats.

Socios and Chiliz founder and CEO Alexandre Dreyfus told Cointelegraph that all fan tokens across Socios and Chiliz’s fan token ecosystem have sold for $250 million so far. He predicted that the market size of fan tokens and social tokens will surge up to $10 billion in the next five years.

Fan tokens are a form of digital currency providing holders with access to a number of fan-related membership perks including voting on club decisions, merchandise designs, rewards as well as other fan engagement experiences within sports clubs and music fan clubs.

Dreyfus emphasized that fan tokens are not cryptocurrencies but rather digital assets: “You cannot spend fan tokens to buy something, you can own fan tokens to get fan benefits.” He still noted that fan tokens’ use cases are different for fans and traders. “Fans will hold, traders will trade,” Dreyfus said.

Related: Manchester City officials sign and suspend partnership with mysterious crypto firm within a week

According to the CEO, sources like CoinMarketCap (CMC) and CoinGecko do not correctly reflect the initial price of Socios-issued fan tokens, which is usually around $2 per token. As such, CITY was originally priced at $2 per token instead of $10, which is according to CMC and CoinGecko.

“You can’t see it on CoinMarketCap,” Dreyfus noted, adding that sources like CMC and CoinGecko don’t get fan token offering price but rather capture the listing price only. “Fan tokens are first pre-sold at fixed price during a flash sale before being listed,” he added.

Reelected Miami mayor to take 401k retirement savings partly in Bitcoin

Miami Mayor Francis Suarez also receives a part of his salary in Bitcoin with the help of a third-party payment processor Strike.

The long-standing mayor of Miami Francis Suarez has now announced plans to take a part of his 401(k) payout in Bitcoin (BTC) just a month after he started receiving salary in BTC. 

Soon after becoming the first United States lawmaker to accept a part of his salary in Bitcoin, Suarez wants to dedicate a part of his retirement savings to Bitcoin based on “a personal choice,” he said in an interview with Real Vision:

“I just think it is a good asset to be invested in. I think it’s one that’s obviously going to appreciate over time. It’s one that I believe in.”

Suarez highlighted that Bitcoin’s success is tightly tied to the confidence in the system, which is inherently an “open-source, un-manipulatable system”. The mayor revealed that he has started receiving salary payments in Bitcoin through the help of a third-party payment processor Strike.

The mayor also shared that the city government accepts fee payment in Bitcoin from Miami residents. While the Mayor explores the various options for enabling the Bitcoin payments for retirement savings, Suarez is certain to establish a relevant system by 2022.

Related: Miami will hand out free Bitcoin to residents from profits on city coin

In an effort to further drive Miami’s Bitcoin adoption drive, Mayor Suarez announced on Nov. 12 to give Bitcoin yield as a dividend directly to every eligible Miami resident.

As Cointelegraph reported, the city of Miami will divide and distribute the BTC yields to residents earned by staking its in-house cryptocurrency, MiamiCoin, which was initially launched by Citycoins to fund municipal projects by generating yield. In a bid to transform the city into a major cryptocurrency hub, Suarez said:

“We’re going to create digital wallets for our residents. And we’re going to give them Bitcoin directly from the yield of MiamiCoin.”

Altcoin Roundup: 3 metrics that traders can use to effectively analyze DeFi tokens

DeFi presents a wealth of opportunity for investors, but there are also risks. Here are three metrics investors use to analyze decentralized finance tokens and their associated protocols.

Much to the chagrin of cryptocurrency proponents who call for the immediate mass adoption of blockchain technology, there are many “digital landmines” that exist in the crypto ecosystem such as rug pulls and protocol hacks that can give new users the experience of being lost at sea. 

There’s more to investing than just technical analysis and gut feelings. Over the past year, a handful of blockchain analysis platforms launched dashboards with metrics that help provide greater insight into the fundamentals supporting — or the lack thereof — a cryptocurrency project.

Here are three key factors to take into consideration when evaluating whether an altcoin or decentralized finance (DeFi) project is a sound investment.

Check the project’s community and developer activity

One of the basic ways to get a read on a project is to look at the statistics that show the level of activity from the platform’s user base and developer community.

Many of the top protocols in the space offer analytics that track the growth in active users over time. On-chain dashboards like Dune Analytics offer more granular insights into this metric such as the following chart showing the daily new users on the Olympus protocol.

Olympus daily new users. Source: Dune Analytics

Other pertinent data points to consider when it comes to evaluating community activity include the average number of active wallets on a daily, weekly and monthly basis. Investors should also look at the number of transactions and volumes transacted on the protocol, as well as social media metrics such as Twitter mentions that can help with gauging investors’ sentiment about a particular project.

Alert systems like Cointelegraph Markets Pro provide up-to-date notifications on a project’s Twitter mention volumes and unusual changes in trading volume that can be an early sign that a cryptocurrency is turning bullish or bearish.

CT Markets Pro twitter and trading volume dashboard. Source: Cointelegraph Markets Pro

Regarding project development and developer activity, GitHub has been the go-to place for learning about upcoming upgrades, integrations and where the project is in its roadmap.

If a protocol is boasting about “soon to be released” features but showing little ongoing development or commits being submitted, it might be a sign to steer clear until the activity is better aligned with the claims.

On the other hand, spotting an under-the-radar project with steady development activity and a committed user base could be a positive sign.

Look for steady increases in total value locked

A second metric to look at when assessing the overall strength of a project is the sum of all assets deposited on the protocol, otherwise known as the total value locked (TVL).

For example, data from Defi Llama shows that the total value locked on the DeFi protocol DeFiChain (DFI) has been rising lately following a major protocol upgrade, with the TVL hitting new all-time highs on several days so far in December. This signals that momentum and interest in the project are increasing.

Total value locked on DeFiChain. Source: Defi Llama

DeFi aggregators like Defi Llama and DappRadar allow users to dive deeper into the data and look at the statistics for different blockchain networks such as the TVL on the Ethereum Network or Binance Smart Chain, as well as by individual projects like Curve and Trader Joe.

Protocols with a higher TVL tend to be more secure and trusted by the community, while projects that rank lower on the list generally carry more risk and tend to have less active communities.

Related: Point of no return? Crypto investment products could be key to mass adoption

Identify who the majority token holders are

Other factors to take into consideration are the benefits that token hodlers receive for holding and being active in the community. Investors should also look into the manner in which the token was launched and who the dominant token holders currently are.

For example, SushiSwap allows users to stake the native token SUSHI on the platform to receive a portion of the exchange fees generated, whereas Uniswap, the top decentralized exchange (DEX) in DeFi, currently offers no such feature.

While other factors like trading volume and daily users have made Uniswap a legitimate investment for many holders, some traders prefer to hold SUSHI because of its revenue-sharing model and multichain trading capabilities.

On the flip side, caution is warranted when excessive yields are offered for low liquidity, anonymously-run protocols with little community activity because this can be the perfect setup for catastrophic losses. In DeFi, these are called rug pulls, and typically they occur after a large amount of money has been deposited onto smart contracts controlled by a single anonymous party.

Examining the token distribution for the protocol, as well as keeping an eye on the percentage of tokens allocated to the developers and founders vs. the tokens held by the community can give some useful signal on whether a platform could fall victim to a rug pull or the whimsy of mercenary capital.

If most of the available supply is held by the creators and backers, there is always going to be a chance that these tokens will later be sold at market rate if or when early investors choose to exit their position.

Want more information about trading and investing in crypto markets?

  • TerraUSD (UST) adoption backs LUNA’s ascension to a new all-time high
  • Binance CEO reveals one key factor for token listings
  • DeFi: Who, what and how to regulate in a borderless, code-governed world?
  • Animoca Brands’ treasury increased in value by 5X over two months
  • 3 reasons why DeFiChain (DFI) price has gained 60% in December

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Analysts say Bitcoin’s open interest wipeout ‘will give way to further upside’

Bitcoin’s drop to $42,000 obliterated its open interest and liquidated a large swath of leveraged traders, but analysts say OI resets typically provide great buying opportunities.

The weekend is upon us and fear remains the dominant short-term sentiment in the cryptocurrency market. Earlier today Bitcoin (BTC) price dropped to $47,250 and investors are biting their nails after data from the U.S. consumer price index (CPI) shows inflation reaching a forty-year high at 6.8%.

Data from Cointelegraph Markets Pro and TradingView shows that a midday push by bulls to reclaim the $50,000 support level was handily defeated and sellers sent the price back below $48,000 which could possibly force another daily lower high for the top-ranked cryptocurrency. 

BTC/USDT 4-hour chart. Source: TradingView

With the prospect of a major run up in price to end the year all but dashed, traders have shifted their attention to managing risk and identifying the best levels to buy dips. Here’s a look at what analysts are saying about Bitcoin’s outlook heading into 2022.

Open interest wipeout “will give way to further upside”

As seen in previous instances where the price of BTC saw a rapid decline, there has been a significant decrease in the open interest (OI) for BTC on derivative exchanges as highlighted in a recent report from Delphi Digital. The report noted a 50% decrease in OI after this latest market downturn as over-leveraged longs positions were decimated.

BTC futures open interest vs. BTC price. Source: Delphi Digital

While the experience was likely an unpleasant one for traders who were overexposed, the analysts suggested that deleveraging events like this are beneficial over the long term and will often “give way to further upside” as the previous froth and over-exuberance are replaced with a more measured trading environment.

The sharp reduction in OI over the past month may also be signaling that the short-term bottom for BTC may be in according to Delphi Digital, and its possible that the current sell-off could be reaching the point of exhaustion.

Delphi Digital said,

“The 30-day % decline in OI for BTC has reached levels that previously signaled a bottom was forming (or wasn’t too far out).”

Range-bound trading for BTC until 2022

According to Ben Lilly, co-founder of Jarvis Labs, the price of Bitcoin is likely “to stay in this trading range until at least the end of the month,” mainly due to the fact that Dec. 31st marks “the largest open interest in terms of open contracts.”

Lilly highlighted previous instances of major drawdowns resulting in a high number of liquidations as part of the reasoning and he explained that the market has typically taken some time to build momentum after these pullbacks.

BTC futures open interest. Source: Espresso

Lilly said,

“Luckily, for anybody wanting to accumulate on a weekly basis or at the bottom portion of the current trading range, this is a great setup.”

Related: Trader who called 2017 Bitcoin price crash raises concerns over ‘double top’

Should traders look for continuation of the uptrend?

A final bit of insight was provided by analyst and pseudonymous Twitter analyst ‘Rekt Capital’, who posted the following chart of BTC price trading between two key exponential moving averages.

BTC/USD 1-week chart. Source: Twitter

Rekt Capital said,

“Overall, BTC is consolidating inside the two key EMAs right now. Just like in May 2021. And just like in May… Continued price stability and consolidation in between these two EMAs will precede new macro uptrend continuation.”

The overall cryptocurrency market cap now stands at $2.238 trillion and Bitcoin’s dominance rate is 40.7%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Blockchain folk hero Nandy Martin hopes to build a better community for Haitians in Miami

So far, Martin has the support of both Cardano’s founder Charles Hoskinson and Miami’s District Commissioner Jeffrey Watson.

Haiti, a Western Caribbean country torn by a tragic past, natural disasters, poor leadership, and ineffective foreign aid, is not a country that comes to people’s minds when they think of blockchain adoption. For years, Haiti has been among the world’s poorest countries in terms of GDP per capita, as per data from the World Bank.

But Haitian-Canadian entrepreneur Nandy Martin, colloquially known as Captain Haiti for wandering the streets of his community in his superhero attire and signature shield prop, has ambitious goals to change that. Operating from the sunny domains of his humble abode in Miami’s Little Haiti, Martin launched the Little Haiti Coin on the Cardano blockchain as an initiative to clean up his community, drive business crypto adoption, and use it as a means to promote Haitian imports. In an exclusive interview with Cointelegraph, Captain Haiti discussed the dynamics of the Little Haitian Coin and the technological roadmap of the project going forward.

Captain Haiti and Cardano founder Charles Hoskinson |Source: Charles Hoskinson via Twitter

Cointelegraph: What inspired you to create the Little Haiti Coin and this venture?

Captain Haiti: There are so many nonprofits involved in Haitian society. For the last, I will say, minimum 60 to 70 years, and the situation has gotten worse despite their best efforts. So my approach to the country is totally capitalist, by integrating it into the world’s economic system. And that’s why I’ve created the Little Haiti coin, to allow folks there to get into the crypto era. So the goods that we have and the precious minerals we have in Haiti could have a vehicle to trade them to the world, take care of our people with our social program, etc.

CT: How are you turning that vision into reality?

CH: We have created 1 million Little Haiti Coin on the Cardano blockchain. The way that we are doing it, we have acquired a facility and partnership for a 5000 square feet facility in Little Haiti, so its residents can come and install a wallet where they’re going to receive one Little Haiti Coin. So the goal of the facility is to get the people to install the wallet and allow them to go and purchase products or products or goods in Little Haiti that are coming from Haiti. So the utility of the token is to provide the resident of Little Haiti and provide the world a discount from 10% to 100% of goods imported from Haiti.

CT: So how much remittance is coming from Haiti into the Little Haiti community in Miami?

CH: Our goal is to capture one-quarter of the remittance from Haitians worldwide to Haiti, or $1 billion. That’s a great question. Because the remittance to Haiti represents 36% of Haiti’s GDP. And the first phase was to get vendors in local businesses to have the Little Haiti Coin to want to accept that in our ad. And to do that, we approached the Commissioner of Miami District 5, Jeffrey Watson. And he had granted $200,000 to 40 local businesses to help import Haitian products and make them available to tourists visiting Little Haiti.

CT: What does progress look like for the Little Haiti Coin?

CH: The first utility of the new Haiti coin was to clean up the neighborhood. Okay, because it is an area that is economically challenged. So do you have a lot of littering We work in partnership with the City of Miami, where anybody could sponsor to clean up one square foot of Little Haiti with $3. And what you receive and reward is one Little Haiti coin. So doing so, we had cleaned up over 300,000 square feet of Haiti.

CT: So, out of all blockchains, why did you choose Cardano specifically to launch the Little Haiti coin?

CH: After meeting Charles Hoskinson, at that instant, I knew that somebody that is so innovative, and somebody that has been in this world, and descriptor world for that long for that person to be so humble, and also willing to participate and play around with the shield, etc. So I had to dig into Cardano. And then I’ve discovered Cardano’s mission to help create a better world for big organizations like the small one and people like me. So I felt that I had a home in Cardano for the Little Haiti Coin.

CT: Where do you see the technology heading one or two years from now?

CH: Yes, the project is going fast. The first thing is, I’ve created the Captain Haiti gaming token on the Binance Chain to educate the world about crypto. We will be releasing it on January 1. We already have 10,000 downloads of the game on the Play Store.

Screenshot of Captain Haiti game | Source: Captain Haiti

And all we have to do is to get the kids to play. And as the kids are playing, we are burning the circulating supply. This ring in questions, Hey, what is circulating supply? What is inflation? What is deflation? It’s also about educating and changing the perception of people about Haiti.

And then also have the Cardano Beach facility. So we provide you an NFT that gets like the deed of your square footage that you’re renting, for, say, a co-working space. And once we have the hub, we invite the whole population to create their Cardano ID right here in Little Haiti.

South Africa’s financial regulator plans to introduce framework aimed at protecting vulnerable crypto investors: report

“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky,” said Unathi Kamlana.

Unathi Kamlana, the commissioner of South Africa’s Financial Sector Conduct Authority has reportedly said the government’s rollout of a crypto framework would be aimed at mitigating any potential risks.

According to a Friday report from Bloomberg, Kamlana said the financial regulator planned to present a regulatory framework early in 2022 intended to protect investors from “potentially highly risky” crypto assets. The commissioner said any framework on crypto would be created in coordination with the Prudential Authority and Financial Surveillance Board of the South African Reserve Bank.

“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky,” said Kamlana. “We must be very careful to not just legitimize them.”

The FSCA commissioner’s comments follow South Africa’s Intergovernmental Fintech Working Group saying in June it would be laying the groundwork for the “phased and structured” regulation of cryptocurrencies in South Africa. The African nation’s policy on crypto has largely been one of noninterference, but also in warning the public that there was little protection or recourse from the government for scams or fraud.

When the co-founder of South African crypto investment platform AfriCrypt allegedly vanished with billions in user funds, the FSCA said it could not take action as crypto assets were unregulated in the country. After receiving a warning, major crypto exchange Binance also challenged the FSCA’s authority as South Africa’s financial regulator, arguing instead that the country’s Financial Intelligence Centre ensured crypto firms were in compliance with local laws.

Related: South African asset manager denies stealing billions from users, claims $5M was lost in hack

In May, the South African Reserve Bank began an exploratory study on rolling out a central bank digital currency, or CBDC. The central bank is also part of a pilot program with those in Australia, Singapore, and Malaysia to trial international settlements using CBDCs.

FLUX, SFP and Badger DAO surge even as Bitcoin price falls to $47K

BTC price continues to soften, but new exchange listings and protocol upgrades provided a much-needed boost for FLUX, SFP and BADGER.

The year-long mantra that the crypto market would see a blow-off top in December has proven to be a dud thus far and for the last week, most cryptocurrencies have been under sell pressure and Bitcoin (BTC) is encountering difficulty in trading above $47,000. 

That said, it’s not all bad news for cryptocurrency holders on Dec. 10 because several altcoins have managed to post double-digit gains due to new exchange listings and protocol upgrades.

Top 7 coins with the highest 24-hour price change. Source: Cointelegraph Markets Pro

Data from Cointelegraph Markets Pro and TradingView shows that the biggest gainers over the past 24-hours were Flux (FLUX), SafePal (SFP) and Badger DAO (BADGER).

FLUX benefits from the “Binance bump”

Flux is a GPU mineable proof-of-work protocol aimed at creating a scalable decentralized cloud infrastructure for Web 3.0 applications.

VORTECSâ„¢ data and the NewsQuakesâ„¢ alerts from Cointelegraph Markets Pro began to detect a bullish outlook for FLUX on Dec. 9, prior to the recent price rise.

The VORTECSâ„¢ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECSâ„¢ Score (green) vs. FLUX price. Source: Cointelegraph Markets Pro

As seen in the chart above, the NewsQuakeâ„¢ system put out an alert for FLUX on Dec. 9, less than an hour before the price began to spike 150% over the next day.

The announcement that helped spark the rapid price rise in FLUX was a notification that Binance would be list FLUX token on its platform. Shortly after this announcement, FLUX price rallied to a new all-time high at $4.01.

SafePal adds support for nine new networks

The SafePal project is a cryptocurrency hardware and software wallet solution for investors who hold assets on the Ethereum, Binance Smart Chain and Tron networks.

Data from Cointelegraph Markets Pro and TradingView shows that after hitting a low of $1.55 on Dec. 6, the price of SFP has climbed 45.84% to hit a daily high at $2.27 on Dec. 10 as its 24-hour trading volume spiked 50% to $158 million.

SFP/USDT 4-hour chart. Source: TradingView

The building strength for SFP comes as the project released an updated version of its wallet app and added support for Cardano, Nervos Network, Avalanche, Fantom, HECO Chain, Songbird, BOBA Network, Optimism and Arbitrum.

Related: Trader who called 2017 Bitcoin price crash raises concerns over ‘double top’

Badger DAO prepares to reactivate its smart contracts

Badger DAO is an open-source decentralized autonomous organization focused on building products and infrastructure that increase the utility of Bitcoin in the decentralized finance landscape.

VORTECSâ„¢ data from Cointelegraph Markets Pro began to detect a bullish outlook for BADGER on Dec. 9, prior to the recent price rise.

VORTECSâ„¢ Score (green) vs. BADGER price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECSâ„¢ Score for BADGER spiked into the green zone and hit a high of 75 on Dec. 9, around three hours before the price increased 48% over the day.

The positive price action for BADGER comes as the protocol tries to bounce back from a Dec. 2 exploit that resulted in the halting of the project’s smart contracts.

The overall cryptocurrency market cap now stands at $2.218 trillion and Bitcoin’s dominance rate is 40.7%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Indian PM calls for cryptocurrencies to ’empower’ democracy at global summit

Narendra Modi also called for a global standard on cryptocurrencies and major social media platforms in an effort to facilitate free and fair elections and governance.

Cryptocurrency made an appearance at a global online summit for world leaders in a speech from Indian Prime Minister Narendra Modi.

At Friday’s events for the Summit for Democracy hosted by U.S. President Joe Biden, Modi said India would be willing to offer other countries “innovative digital solutions” to facilitate free and fair elections and governance. In addition, the Prime Minister called for a global standard on cryptocurrencies and major social media platforms, likely referring to the impact some have had on politics in India as well as many other countries:

“We must also jointly shape global norms for emerging technologies like social media and cryptocurrencies so that they are used to empower democracy, not to undermine it […] By working together, democracies can meet the aspirations of our citizens.”

Indian Prime Minister Narendra Modi speaking at Friday’s Summit for Democracy

As the Prime Minister of India, Modi represented roughly 1.4 billion people at the summit, the largest democracy in the world by a large margin. His remarks came as the Indian government prepares to consider a bill that could ban certain cryptocurrencies, but also encourage the creation of a digital rupee. 

Different reports have suggested that the legislation is aimed at regulating crypto rather than banning it. The same bill has previously appeared on the Indian parliament’s agenda but has not yet led to a vote. The Reserve Bank of India also had a blanket ban on crypto on the books until March 2020, when the country’s supreme court overturned it.

Related: Lines in the sand: US Congress is bringing partisan politics to crypto

Despite the lack of regulatory clarity in India, Modi has called on countries to work together on crypto and blockchain and urged others to consider the ethics when using the technology. The next general election in India is expected to occur in 2024 when citizens will choose new members for the country’s lower house of parliament.

“It is important that all democratic nations work together on [crypto] and ensure it does not end up in wrong hands, which can spoil our youth,” said the PM in a Nov. 17 tweet.

Point of no return? Crypto investment products could be key to mass adoption

Cryptocurrency investment products could be a missing piece of the puzzle towards mass adoption, and are now becoming increasingly more common.

The first Bitcoin (BTC) futures exchange-traded fund (ETF) was launched in the United States back on October 19, 2021. Since then, a number of other cryptocurrency investment products have been launched in various markets.

That first ETF, the ProShares Bitcoin Strategy ETF, quickly became one of the top ETFs of all time by trading volume on its debut, and soon after, several other Bitcoin futures ETFs were launched in the United States, providing investors with different investment options.

To Martha Reyes, head of research at cryptocurrency trading platform Bequant, these options are important. Speaking to Cointelegraph, Reyes pointed out that in traditional finance, ETFs have “proved to be incredibly popular in recent years, with ETF assets expected to reach $14 trillion by 2024.”

Reyes said that investors who have been on the sidelines of the market may now choose to invest in cryptocurrencies if they prefer the “low cost, flexibility and convenience [of ETFs], especially as they then do not have to custody the crypto themselves.”

Custodying crypto assets, Reyes said, can prove a “technical barrier to some non-crypto natives.” The launch of crypto ETFs may offer investors the type of diversification they want in their portfolios through crypto, although some may want to access the market “via baskets reflecting different trends in this rapidly evolving market.” She added:

“Others prefer to be more hands on or have a combination of strategies. The important thing is that investors have options.”

Several options have, in fact, been launched over the last few weeks. United States-based firm WisdomTree has listed its cryptocurrency exchange-traded product (ETP), Crypto Mega cap Equal Weight ETP, on Euronext exchanges in Paris and Amsterdam.

Trading under the ticker symbol MEGA, the product is backed by physical cryptocurrencies including Bitcoin and Ether (ETH) and is rebalanced quarterly. WisdomTree also launched its WisdomTree Crypto Market (BLOC) and WisdomTree Crypto Altcoin (WALT) ETPs in Europe.

Similarly, in December, Bitcoin Capital AG released two ETPs on the SIX Swiss Exchange, offering investors exposure to Bitcoin and Ether. These products are actively managed by FICAS AG and are available to institutional, professional and private investors.

These products have so far been successful and more options are being launched on a regular basis, effectively boosting investors’ options in the market. To some experts, these products are part of the next step cryptocurrencies need to take to be widely adopted.

Investment products and adoption

To Reyes, participation in these investment products is so far “primarily institutional,” especially in countries like the United States in which only futures products are trading. She said that retail investors “are cognizant of the added rollover costs of a future versus a spot ETF, meaning underperformance versus the underlying.”

Reyes added that for “wide retail participation, we would probably need to see a spot product.”

Speaking to Cointelegraph Sui Chung, CEO of FCA-regulated crypto indices provider CF Benchmarks, said that cryptocurrency investment products are “significant drivers of mass adoption,” and while the firm would “like to see a wider choice of avenues” the impact of these products could still be significant:

“We shouldn’t underestimate the impact these products have in bringing new investors and capital to crypto assets and how this can accelerate long-term adoption.”

Karan Sood, CEO and managing director at Cboe Vest, an asset management partner of Cboe Global Markets, told Cointelegraph that increased participation from a diverse set of investors is “good for the market,” as it “increases liquidity and helps build out the market infrastructure.”

Sood said that before investing, investors should review their possibilities carefully as some products were initially launched to provide investors access to the cryptocurrency market, while others “try to provide a solution to Bitcoin’s extreme volatility problem.”

According to Sood, volatility is “endemic to the crypto asset space,” and sell-offs in which Bitcoin and other crypto assets lose over half of their value are fairly common, so much so that drops of over 20% are to be expected. He added:

“However, what is new is the availability of funds that allows investors to access Bitcoin exposure with strategies designed to reduce the impact of severe sustained declines.”

These funds, he said, take the “managed volatility set of investment strategies extensively used in conventional asset classes” and apply them to Bitcoin futures to protect investors against the cryptocurrency’s volatility.

This volatility is believed to be keeping some institutional investors on the sidelines and stopped regulators like the U.S. Securities and Exchange Commission (SEC) from finding ways to properly protect investors and accommodate for the innovation in the space.

To Chung, the cryptocurrency market has matured to the point there are now “core” exchanges like Coinbase and Kraken that ensure fair and manipulation-free trading, so market manipulation should not be a problem. Regulated products are, nevertheless, preferable for institutions and more conservative investors.

Considering the lack of a spot Bitcoin ETF in the U.S. and the disadvantages of futures-based products mentioned by Reyes above, retail investors are left either gaining exposure from other markets or buying crypto directly. These options are, nevertheless, not optimal for some.

Early stages for crypto investment products

Buying cryptocurrencies on the spot market has been the go-to strategy for most crypto investors over the last few years, but more conservative investors who may want to diversify their portfolios may be uncomfortable with the lack of regulation in the market.

As Cboe Vest’s Sood put it, when compared to the “trading and custody infrastructure that exists for conventional assets such as stocks, bonds and funds, there is little in the form of regulation.” This lack of regulation, he said, has been “exemplified by the persistent news about the loss of keys, hacking of systems and fraud in trading in crypto assets.”

Bitcoin futures investment products operate under the Commodity Futures Trading Commissions’ regulations, while mutual funds with exposure to Bitcoin are actively managed by regulated entities with a rich history of providing strong investor protections.

Taking into account these differences, Sood pointed out that “unless there is a change in the regulation of spot Bitcoin, there is a sound basis for BTC futures-based investments but not for spot-based investments.”

Notably, spot Bitcoin ETFs are available in various jurisdictions. In December, Fidelity Canada launched one such product called the Fidelity Advantage Bitcoin ETF. It trades on the Toronto Stock Exchange and is denominated both in Canadian and United States dollars.

Sood said that regulations in the U.S. may be a burden for investment product manufacturers but have “delivered substantial value and protections to U.S. investors over the years.” These protections, he said, have “stood the test of time over decades” and, as such, investors should opt for products regulated in the country if possible. 

While futures-based investment products may not be optimal for retail investors, Sood argued that some sophisticated products have been launched to offer investors the cryptocurrency exposure they may be looking for. He concluded:

“Investing in funds overseas may expose U.S. investors to undue unique risks and tax burdens.“

Bequant’s Reyes pointed out that cryptocurrency ETFs have less than $20 billion in assets under management across 50 products, which means we are “still in the early stages of the adoption” of these products.

Nevertheless, she sees the approval of a futures ETF and rejection of a spot ETF as “inconsistent,” as in other jurisdictions, spot ETFs are already being traded. Making matters worse, a futures product “primarily benefits institutional investors as it is too expensive for individual investors.

Grayscale Investments has notably fired back at the SEC for rejecting VanEck’s spot Bitcoin ETF application, issuing a letter arguing the SEC is wrong to reject such products after approving several Bitcoin futures ETFs.

CF Benchmarks CEO Sui Chung said that while futures products are regulated instruments with oversight from the CFTC, it “isn’t so clear cut for spot Bitcoin,” and the SEC has a challenge in balancing its enforcement mandate with what U.S. investors want.

However, Chung noted that Bitcoin futures ETFs have already “sparked an irreversible change” as they are available “to every single member of the investing public in the world’s deepest capital market.”

Markets, he said, haven’t experienced significant disruptions and “the sky hasn’t fallen in,” meaning that we “have passed the point of no return.” To Chung, firms who can offer investors ETFs that can help diversify and grow their portfolios “will be the winners.”

Making crypto more accessible

A Bitcoin spot ETF could make cryptocurrencies more accessible but to the above experts, the crypto ETF is about more than a product with physical exposure — it’s about making cryptocurrency exposure more accessible.

To Reyes, futures ETFs trading in the U.S. are a “trial run in eventually approving a spot ETF.” Such an ETF, she concluded, would be greatly beneficial:

“A spot Bitcoin ETF would fuel mainstream retail adoption of Bitcoin further. Some investors prefer the ease of accessing the market this way rather than through dedicated crypto exchanges.”

Reyes welcomed regulation, noting that the more regulated fiat-to-crypto on-ramps there are the better, as these platforms can help signal regulatory concerns are easing, further driving up demand for cryptocurrencies.

Chung said that cryptocurrency investment products can lead to mass adoption by ensuring that investors deal with less friction when entering the market, as it may be easier to buy an ETP via an existing brokerage account than to open an account at a cryptocurrency trading platform:

“We don’t want to be dogmatic about how people invest and learn about crypto and its possibilities, our job is simply to open up as many avenues as possible and drive adoption.”

While it isn’t clear when the SEC will approve a Bitcoin spot ETF or whether existing solutions are enough for more conservative investors to make a move, new investment products are making it easier for investors to gain exposure to the space.

Over time, the trend should continue and new products will launch, allowing cryptocurrencies to fully develop in the market as a new asset class that could help hedge against inflation or economic downturns.