30th June 2023 > > Ledger & Slovakia.

tl;dr

Ledger attempts to counteract some of the barriers to institutional adoption of cryptos, and Slovakia encourages retail adoption of cryptos.

Market Snap

Market Wrap

Fidelity’s application for a spot BTC ETF includes the Blackrock clause – a “surveillance sharing agreement” designed to address the SEC’s concerns about the potential for market manipulation of the BTC spot price.

The pressure on the SEC grows daily …

The morning we wake up to an approved spot BTC ETF in the US will likely see the biggest overnight gains ever seen for BTC in absolute and percentage terms. Meanwhile another assault on $31k was rejected, but not for long I suspect.

Curious Cryptos’ Commentary – Ledger action

We love a bit of Ledger action at CCC Towers. The Ledger Nano X is best-in-class for cold storage, and the functionality of Ledger Live improves all the time. Compared to other options such as Tangem (don’t even think about it) and Trezor (think about it then decide otherwise) the decision is a simple one.

Ledger have now turned their attention to the institutional market.

Wholescale adoption of cryptos by institutions is dependent on three issues. Most importantly is the controversial topic of regulation. After that comes the thorny issue of custody, and the regulation of custodians. Finally, pricing transparency and liquidity will be key determinants of the percentage of assets allocated once the first two stumbling blocks are removed.

As regards regulation, the Blackrock innovation (that cannot have passed you by if you are regular reader of the CCC) may possibly solve this problem once and for all.

Ledger, getting ahead of the game as always, has launched an initiative to address the two secondary problems getting in the way of institutional adoption of cryptos.

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Ledger have announced the launch of Ledger Enterprise Tradelink:

https://www.ledger.com/blog/ledger-announces-ledger-enterprise-tradelink

Key highlights of this press release:

“ … Ledger is entering the institutional trading technology market with the first open network to enable custodial trading via exchange and custodial partners.”

“Ledger is rolling out a solution … with flexibility, risk management, and regulatory compliance at the forefront.”

“Ledger provides an open governance framework where participants can join or build a network of trading counterparties. This allows fund managers to seamlessly manage their crypto assets and collateral across multiple custodial partners to effectively distribute their risk.”

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There is a world of difference between lofty ambitions and the implementation of those ideas, but this product is already up and running. So far, partners are all crypto companies, with no sign of a TradFi input.

I look forward to that issue being addressed soon.

Curious Cryptos’ Commentary – Slovakia

One of the many benefits of MiCA (Markets in Capital Assets), the EU’s flagship legislation showing the world how to attract crypto tax dollars, is the competition it will open between countries within the EU.

Slovakia has made a strong start by addressing some of the issues around personal taxation of crypto profits.

The tax rate on gains made after holding cryptos for more than twelve months has been reduced from anywhere between 10% and 25% plus a 14% health insurance contribution to a Liechtenstein type flat rate level of 7%.

I know this is a very unfashionable view, so Guardianistas please look away now, but flat taxes can be effective at raising the absolute amount of tax paid. Like I say, unfashionable, and there really is zero point in debating it.

Even more intriguingly, the first EUR 2,400 of cryptos received as income will be outside of your tax calculation, paving the way for a legitimate market in cryptos used as payments for labour.

And finally, and most cheering of all, an amendment to the constitution was passed on June 15th codifying the rights of citizens to pay for goods and services in cash. Legislator Miloš Svrček explained in no uncertain terms the need for this groundbreaking legislation:

“It is very important that there is a provision in the Constitution based on which we can defend ourselves in the future against any orders from the outside, saying there can only be digital euro and no other payment options.”

That’s a body blow for the ECB’s desire to enforce a Euro CBDC on all EU citizens. I can hear Convicted Criminal Christine Lagarde gnashing her teeth from here.

Expect other countries to follow soon, especially those in the eastern regions of the EU.