5th July 2023 > > Laser Digital and South Africa.

tl;dr

Laser Digital predicts a bright future for cryptos. South Africa joins an ever-growing list of countries providing a regulatory framework for crypto activities.

Market Snap

Market Wrap

Since the announcement of the proposed Blackrock spot BTC ETF, inflows to global exchange traded products have totalled 13,822 BTC according to Vetle Lunde, senior research analyst at K33 Research:

"Globally, BTC ETPs experienced inflows of 13,822 BTC in June, with the inflows kicking in after the BlackRock announcement on June 15. The flows have been strong across jurisdictions, with Canadian and European spot ETPs and U.S. futures ETFs all experiencing solid inflows."

That’s nearly half a billion dollars at current prices which initially sounds impressive but that amounts to just 0.07% of the market cap for BTC. Still, its price impact seems obvious to me, with BTC rallying 20% since June 15th.

If approval was given – and it remains a big if – for a spot BTC ETF, the inflows would be far greater than this.

Curious Cryptos’ Commentary – Laser Digital

Backed by Nomura, Laser Digital’s latest global survey reached out to investors that manage almost $5 TRILLION of assets:

https://a.storyblok.com/f/174183/x/8e97b105b3/laser-digital-research-report-v3.pdf

Taking each slide at a time, these the headlines:

- 82% are positive on BTC and ETH for the next 12 months.

- 91% want cryptos combined with traditional assets to protect against fiat debasement.

- 90% say that the backing of a large TradFi firm (e.g. Blackrock) is essential.

- 83% want exposure via a vehicle (e.g. ETF).

- 76% face legal or regulatory restrictions.

The killer conclusion:

“Nearly half (45%) say their and/or their clients’ total percentage exposure to digital assets will between 5% and 10% over the next three years and just 0.5% say they will have no exposure.”

…

McKinsey estimates that the global balance sheet is $1.6 QUINTILLION in assets, a number so vast one cannot seriously pretend to understand what It means. This is broken down into $610 TRILLION of real assets, $520 TRILLION of financial assets outside the financial sector, and $500 TRILLION within the financial sector.

If we assume that 3% of investment assets are directed into cryptos, then the market cap of gold, currently sitting at $12.75 TRILLION seems an eminently reasonable target to me. With just 21mm BTC ever to be mined that suggests a BTC price of over $600k per BTC, without taking utility into account.

Just saying is all.

Curious Cryptos’ Commentary – South Africa

The financial regulator for South Africa (FSCA) has decreed that all centralised cryptocurrency exchanges operating within South Africa will need a license to operate by the end of this year.

Commissioner Unathi Kamlana explained:

“There is potentially serious harm to financial investors when using crypto products, and therefore it makes sense for us to introduce the regulatory framework”.

Quite right, Unathi. The man is talking sense. Wide scale adoption of cryptos cannot happen without regulation.

Intriguingly, the Central Bank has requested that commercial banks provide lending and other banking services to the crypto industry. Apparently commercial banks have been reticent to do so, and Unathi is not happy about this:

“There’s better transparency if you are in the formal sector”.

Gensler could do worse than pick up the phone and have a long chat with Unathi to better understand his enlightened approach.