Back to overview 31.09.2021

ETC Group Crypto Minutes Week #35

Cuba’s central bank is the latest to accept Bitcoin, long-term ETH and BTC holders refuse to sell and US regulators start watching the $85bn DeFi market.

ETC Group Crypto Minutes Week #34

Sign up for our newsletter in order to access all our industry-leading content

Subscribe Already a subscriber?

Cuba accepts Bitcoin

Cuba’s central bank has started accepting Bitcoin and other cryptocurrencies. A 26 August resolution signed by the Banco Central de Cuba President, Marta Sabina Wilson Gonzalez, notes that the use of “certain virtual assets in commercial transactions” is now enabled throughout the Central American country.

The text of the law leaves the door open for the adoption of a range of cryptocurrencies nationally, but local media reported that both bitcoin (BTC) and ether (ETH) will be accepted as the two most recognised and highest-value cryptocurrencies.

RESUELVO
PRIMERO: La presente Resolución tiene como objetivo establecer las normas a partir
de las cuales el Banco Central de Cuba regula el uso de determinados activos virtuales en
transacciones comerciales, así como el otorgamiento de licencia a proveedores de servicios de activos virtuales para operaciones relacionadas con la actividad financiera, cambiaria y de cobranzas o de pagos, en y desde el territorio nacional.
SEGUNDO: A los efectos de la presente Resolución, se entiende por activo virtual,
la representación digital de valor que se puede comercializar o transferir digitalmente y
utilizar para pagos o inversiones.
Este término comprende diversas acepciones utilizadas con iguales fines, tales como,
activo digital, criptoactivo, criptomoneda, criptodivisa, moneda virtual y moneda digital.
Se entiende por proveedor de servicios de activos virtuales, cualquier persona natural o
jurídica que como negocio o en actividades de negocios se dedica al intercambio entre activos
virtuales y monedas de curso legal; al intercambio entre una o más formas de activos virtuales; la transferencia de activos virtuales; la custodia o administración de activos virtuales o
instrumentos que permitan el control sobre activos virtuales; y a la participación y provisión
de servicios financieros relacionados con la oferta de un emisor o venta de un activo virtual.
— Extract from the Official Gazette of Cuba , 26 August 2021

It means Cuba is the latest Central American country to adopt cryptocurrency at a national level.

The same circular lays out the central bank’s definition of cryptocurrencies:

“Digital representations of value that can be transferred digitally and used for payments or investments.” Translated from Spanish

The use of cryptocurrency is not mandatory, unlike in Cuba’s neighbour to the south El Salvador, however the resolution does recognise cryptocurrencies as a means of payment exchange for banks and institutions, and says the central bank will grant licences to crypto service providers.

Spanish-language cryptocurrency news website CriptoNoticas was first to report on the resolution.

Cuba’s GDP is currently $103bn annually, according to data from The World Bank, putting it on a par with Ethiopia and Morocco, and just behind European countries like Hungary and Greece.

Part of the reason for this national adoption of cryptocurrencies is likely to be the cost of remittances. We already know that reducing the cost of remittances is key to the evolution of Bitcoin adoption in Central America and beyond. And that is the assessment of the region’s development bank, the CABEI, in conversation with Reuters this week. CABEI is offering El Salvador technical assistance on implementing the use of cryptocurrency.

“Everyone is watching if it goes well for El Salvador and if, for example, the cost of remittances drops substantially...other countries will probably seek that advantage and adopt it. Guatemala, Honduras and El Salvador are the countries that would have the most to gain if the adoption of bitcoin lowered the cost of sending remittances.” Dante Mossi, executive president, Central American Bank for Economic Integration

Cuba’s move indicates that grand experiments using crypto are now accelerating at an international level.

On-chain metrics show BTC, ETH holders unwilling to sell

Metrics compiled by data provider Glassnode show that long-term bitcoin and ether holders are unwilling to sell their coins.

The changing market behaviour indicates a bullish intent for both the Bitcoin and Ethereum trading markets as we head further into 2021.

Bitcoin: HODL Waves
Ethereum: HODL Waves (Coins < 3m)
“In agreement with a minimal desire for long-term investors to spend coins, the Liveliness metric for both chains has entered a very strong downtrend [and] Bitcoin liveliness has re-entered a downtrend which has accelerated during this price rally. Ethereum supply shows a similar trend with a whopping 70% of the ETH coin supply dormant for at least three months. For both assets these uptrends in older coins supply commenced around March 2021, which therefore reflects a very strong demand to buy and hold throughout this bull market.” Glassnode, The Week On-Chain, 30 August 2021

‘Liveliness’ delineates whether more coin days are accumulated (investors hold BTC and ETH) or destroyed (investors spend their BTC or ETH) by total coin supply.

Downtrends in this metric suggest greater accumulation, where more dormancy and coin maturity is building up, and less spending is taking place. Steeper trends suggest stronger fundamental changes are at play.

Glassnode points out a structural downtrend in ‘younger’ bitcoin and ether being sold, which suggests more holders are clinging onto their BTC and ETH and not quickly returning it to the market.

Young coins are those created in the last three months, and are those most likely to be spent in periods of market volatility. Young BTC now represent only 15% of the total coin supply in circulation today.

SEC starts tracking DeFi

2020 was the so-called ‘DeFi summer’, when decentralised finance protocols broke through to the mainstream, and international media scrambled to understand markets with esoteric names, like Aave, MakerDAO and Uniswap.

Decentralised finance (DeFi) is an umbrella term for a range of fintech developments that use blockchain to enhance existing financial tools, everything from lending and borrowing markets, to derivatives (futures and options), yield aggregators and insurance.

DeFi marketplaces — largely based on Ethereum — have continued to grow strongly throughout 2021, even while media attention has shifted to the new hot market of NFTs (also mostly based on Ethereum). DeFiPrime records that the total value locked in DeFi protocols is now approaching its all time high, at $84.1bn.

This new set of digital asset marketplaces allow people to trade and lend cryptocurrencies with no middleman to set the rules or siphon off fees. Instead, smart contracts, mostly executed using the Ethereum blockchain’s virtual computer, define the terms of lending, borrowing or derivatives trades, and carry out functions automatically as soon as the conditions laid out in code are completed, for example, depositing coins in a particular wallet. Uniswap, DeFi’s largest trading venue with around $1.8bn daily volume, for example, is a collection of around 30,000 smart contracts running concurrently.

The appearance of these new tools has intrigued investors and regulators worldwide in equal measure.

And now the US market watchdog, the SEC — the gold standard for financial regulators globally — has signed a contract with blockchain analytics firm AnChain.AI to track transactions using these platforms. According to Forbes, the contract is worth $125,000 per year.

The upshot is that America’s Securities and Exchange Commission is now watching the $85bn DeFi market, with a view to implementing greater regulatory oversight on decentralised finance platforms.

The SEC is now under the leadership of former MIT professor Gary Gensler, who notably taught classes at the university blockchain and cryptocurrencies and released the lectures free on Youtube in 2018.

DeFi developers write software to automate transactions and then leave the code to do its job, allowing these smart contracts to run without a central entity in charge. They tend to argue that this kind of decentralisation defeats the need for oversight by the SEC.

However, Chairman Gensler told the Wall Street Journal that Uniswap et al each have features analogous to the kinds of entities that the SEC already oversees.

“There’s still a core group of folks that are not only writing the open source software, but they often have governance and fees...There’s some incentive structure for those promoters and sponsors in the middle of this.” Gary Gensler, chairman, SEC

Markets

BTC/USD

Bitcoin’s bullish run slid off this week, with a total 1.3% loss against the US dollar across the seven-day trading session. $50,000 remains a statistically significant resistance level, with BTC topping out only a few dollars shy of the round number at $49,879.08. The market is yet to reproduce the kind of speculative risk-on conditions that saw the original cryptocurrency race to an all-time high of more than $64,000 in April, but Bitcoin’s low point of $46,294.84 is the highest weekly low since mid-May 2021.

BTC/USD graph Data as of 31 Aug 2021 | Source: TradingView

ETH/USD

Ethereum reached a 15-week high in trading this week, continuing the irrepressible bull run that started with the London hard fork. $3,000 remains a significant barrier for bears, as ETH traders showed characteristically strong buying support in this region. That said, price volatility appears to be contracting, with ETH moving just 4.8% higher in total against the US dollar this week.

ETH/USD graph Data as of 31 Aug 2021 | Source: TradingView

LTC/USD

Further down the cryptoasset chain, the $11.5bn payments protocol Litecoin saw 4% shaved from its value against the US dollar this week. From a starting point of $182.50, LTC crept up by 3.4% to 188.62, before dipping slightly to end the week at $175.13. Still, this point in time represents the higher echelon of value creation for LTC, fully 68% higher than its 2021 low of $103.

LTC/USD graph Data as of 31 Aug 2021 | Source: https://www.tradingview.com/x/YJJe859c/

Disclosure | Copyright © 2021 ETC Group. All rights reserved

Sign up to our weekly newsletter & research publications

Be the first to get expert insights on the latest crypto news

Reach out
to learn more
Get in touch
The value of your investment may go down as well as up and past performance is no indication of future performance. Your capital is at risk.

Welcome to ETC Group

Please select your country of residence and investor profile in order to access content and information around our ETC products

Terms of Website Use

If you continue to use our website, you are deemed to have read and accepted our Terms and Conditions as set out below:

This website is for information only. It does not provide investment, tax or legal advice or recommendations. According to the applicable laws and regulations in your jurisdiction, some contents on this website or the access to certain contents on this website might be restricted.

Disclaimer: The material and information contained on this website is for informational purposes only and ETC Management Ltd, its affiliates, and subsidiaries are not soliciting any action based upon such material. The material and products do not represent or shall not be inferred as an offer or a recommendation to buy or sell a security, nor shall it be considered or treated as investment advice. Additionally, the material accessible through this website does not constitute a representation that the investments described herein are suitable or appropriate for any person. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on any information.

Distribution of Information:

The distribution of the information and material on this website may be restricted by law in certain countries. None of the information is directed at, or is intended for distribution to, or use by, any person or entity in any jurisdiction (by virtue of nationality, place of residence, domicile or registered office) where publication, distribution or use of such information would be contrary to local law or regulation.

You must inform yourself about, and observe any such restrictions in your jurisdiction and by accessing this website you represent that you have done so. The information on this website is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof).

By accepting these Terms and Conditions, you hereby confirm that according to the applicable laws and regulations of the relevant jurisdiction (be it the jurisdiction of your nationality, residence, incorporation of the company you are representing or current physical location) you are allowed access this website.

No contract

Use of this website does not result in a contractual relationship between the user and ETC Issuance GmbH. To that extent, no contractual or quasi-contractual claims arise against ETC Issuance GmbH as a consequence of visiting this website.

No offer

No content of this website should be considered as an offer to purchase any product or securities as described on this website. The prices and valuations published on this website are indicative and are for information purposes only, as is other information displayed on this website. Any person making offer of securities described on this website shall observe and strictly comply with restrictions on the usage of information pursuant to these Terms and Conditions, as well as any restriction imposed by a prospectus published with respect of any securities described or applicable laws and regulation, including without limitation restrictions imposed by the EU Prospectus Regulation (REGULATION (EU) 2017/1129 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 June 2017).

Authorised Investors

Any securities described on this website are not permitted to be offered for sale in all countries and are in each case reserved for investors who are authorised to purchase the securities. Selling restrictions applicable to specific products are set out in the relevant prospectus and should be read carefully by investors. Any restrictions imposed by the relevant prospectus are in addition and without prejudice to any restriction or prohibition established by laws or regulations of any jurisdiction.

United States Persons and legal entities resident in the United States

Securities issued by ETC Issuance GmbH or its affiliates have not been registered under the U.S. Securities Act of 1933, as amended, (the "Securities Act"). The Bonds are being offered outside the United States of America (the "United States" or "U.S.") in accordance with Regulation S under the Securities Act ("Regulation S"), and may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

The information provided on this website is not directed to any United States person or legal entity or any state thereof, or any of its territories or possessions.

U.S. PERSONS (AS DEFINED IN REGULATION S) AND LEGAL ENTITIES RESIDENT IN THE UNITED STATES MAY NOT ENTER THIS WEBSITE.

Information from this website may not be distributed or redistributed into the United States or into any jurisdiction where it is not permitted.

Exclusion of liability for content

Some documents displayed on the website and its content are restricted to ”Professional Investors” only and are not intended for retail or private investors. By making use, opening, or downloading such documents, you agree that you are an “Institutional Investor” as defined here: https://www.handbook.fca.org.uk/handbook/COBS/3/5.html, and have read, understood and accepted the conditions.

Certain documents made available on this website may have been prepared and issued by persons other than ETC Issuance GmbH. This includes any prospectus and additional documents thereto. ETC Issuance GmbH is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, ETC Issuance GmbH shall not be responsible for any loss which is a direct or indirect result of reliance placed on any part of the website and it makes no warranty as to the accuracy of any information or content on the website. The terms and conditions of securities applicable to investors will be set out in the relevant prospectus, available on the website and should be read prior to making any investment.

Risk Warnings

You should always bear in mind that:

  • Cryptoassets are a highly volatile asset class. Your capital is at risk. The value of cryptoassets can go down as well as up and you can lose your entire investment.
  • Past performance is not an indication of future performance.
  • Rates of exchange may affect the value of investments.
  • Applications to invest in securities referred to on this website must only be made on the basis of the relevant prospectus.

Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuers before investing.

Changes of terms and conditions of website use

ETC Issuance GmbH reserves the right to modify or amend these Terms and Conditions at any time without prior warning.

Copyright

Content and design of this website are protected by copyright and other applicable laws. Any copying of the website or of its content requires the prior written consent of ETC Issuance GmbH.

Data Privacy Policy

ETC Issuance GmbH respects the privacy of users. Personal data, which are collected when visiting the website, are processed according to the requirements of the GDPR or equivalent national legislation. For details on data privacy, please see our Privacy Policy.

Hyperlinks

Some of the hyperlinks contained on this website may lead the user to external websites that are not under the control of ETC Issuance GmbH and for the content of which ETC Issuance GmbH is not responsible. When the user clicks on such a link, the user will leave the ETC Issuance GmbH website. ETC Issuance GmbH is not responsible for the content of any websites reached by means of such a link.

Cookies

ETC Issuance GmbH may collect data about your computer, including, where available, your IP address, operating system and browser type, for improvements to the website, system administration and other similar purposes. These are statistical data about users' browsing actions and patterns, and they do not identify any individual user of the website. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By agreeing to the cookie notice below you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps ETC Issuance GmbH to provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of this website without them.

Governing Law and Jurisdiction

ETC Issuance GmbH is a subsidiary of ETC Management Ltd, company number 12165332, with registered office at Gridiron, One Pancras Square, London, England, N1C 4AG. These Terms and Conditions and your access to and use of this website and the content are subject to the laws of England and Wales.

The products displayed on this website are not available for subscription or purchase by retail investors in your selected jurisdiction. Please contact your broker or financial adviser for further information.

If you continue to use our website, you are deemed to have read and accepted our Terms and Conditions as set out below:

This website is for information only. It does not provide investment, tax or legal advice or recommendations. According to the applicable laws and regulations in your jurisdiction, some contents on this website or the access to certain contents on this website might be restricted.

Disclaimer: The material and information contained on this website is for informational purposes only and ETC Management Ltd, its affiliates, and subsidiaries are not soliciting any action based upon such material. The material and products do not represent or shall not be inferred as an offer or a recommendation to buy or sell a security, nor shall it be considered or treated as investment advice. Additionally, the material accessible through this website does not constitute a representation that the investments described herein are suitable or appropriate for any person. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on any information.

Distribution of Information:

The distribution of the information and material on this website may be restricted by law in certain countries. None of the information is directed at, or is intended for distribution to, or use by, any person or entity in any jurisdiction (by virtue of nationality, place of residence, domicile or registered office) where publication, distribution or use of such information would be contrary to local law or regulation.

You must inform yourself about, and observe any such restrictions in your jurisdiction and by accessing this website you represent that you have done so. The information on this website is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof).

By accepting these Terms and Conditions, you hereby confirm that according to the applicable laws and regulations of the relevant jurisdiction (be it the jurisdiction of your nationality, residence, incorporation of the company you are representing or current physical location) you are allowed access this website.

No contract

Use of this website does not result in a contractual relationship between the user and ETC Issuance GmbH. To that extent, no contractual or quasi-contractual claims arise against ETC Issuance GmbH as a consequence of visiting this website.

No offer

No content of this website should be considered as an offer to purchase any product or securities as described on this website. The prices and valuations published on this website are indicative and are for information purposes only, as is other information displayed on this website. Any person making offer of securities described on this website shall observe and strictly comply with restrictions on the usage of information pursuant to these Terms and Conditions, as well as any restriction imposed by a prospectus published with respect of any securities described or applicable laws and regulation, including without limitation restrictions imposed by the EU Prospectus Regulation (REGULATION (EU) 2017/1129 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 June 2017).

Authorised Investors

Any securities described on this website are not permitted to be offered for sale in all countries and are in each case reserved for investors who are authorised to purchase the securities. Selling restrictions applicable to specific products are set out in the relevant prospectus and should be read carefully by investors. Any restrictions imposed by the relevant prospectus are in addition and without prejudice to any restriction or prohibition established by laws or regulations of any jurisdiction.

United States Persons and legal entities resident in the United States

Securities issued by ETC Issuance GmbH or its affiliates have not been registered under the U.S. Securities Act of 1933, as amended, (the "Securities Act"). The Bonds are being offered outside the United States of America (the "United States" or "U.S.") in accordance with Regulation S under the Securities Act ("Regulation S"), and may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

The information provided on this website is not directed to any United States person or legal entity or any state thereof, or any of its territories or possessions.

U.S. PERSONS (AS DEFINED IN REGULATION S) AND LEGAL ENTITIES RESIDENT IN THE UNITED STATES MAY NOT ENTER THIS WEBSITE.

Information from this website may not be distributed or redistributed into the United States or into any jurisdiction where it is not permitted.

Exclusion of liability for content

Some documents displayed on the website and its content are restricted to ”Professional Investors” only and are not intended for retail or private investors. By making use, opening, or downloading such documents, you agree that you are an “Institutional Investor” as defined here: https://www.handbook.fca.org.uk/handbook/COBS/3/5.html, and have read, understood and accepted the conditions.

Certain documents made available on this website may have been prepared and issued by persons other than ETC Issuance GmbH. This includes any prospectus and additional documents thereto. ETC Issuance GmbH is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, ETC Issuance GmbH shall not be responsible for any loss which is a direct or indirect result of reliance placed on any part of the website and it makes no warranty as to the accuracy of any information or content on the website. The terms and conditions of securities applicable to investors will be set out in the relevant prospectus, available on the website and should be read prior to making any investment.

Risk Warnings

You should always bear in mind that:

Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuers before investing.

Changes of terms and conditions of website use

ETC Issuance GmbH reserves the right to modify or amend these Terms and Conditions at any time without prior warning.

Copyright

Content and design of this website are protected by copyright and other applicable laws. Any copying of the website or of its content requires the prior written consent of ETC Issuance GmbH.

Data Privacy Policy

ETC Issuance GmbH respects the privacy of users. Personal data, which are collected when visiting the website, are processed according to the requirements of the GDPR or equivalent national legislation. For details on data privacy, please see our Privacy Policy.

Hyperlinks

Some of the hyperlinks contained on this website may lead the user to external websites that are not under the control of ETC Issuance GmbH and for the content of which ETC Issuance GmbH is not responsible. When the user clicks on such a link, the user will leave the ETC Issuance GmbH website. ETC Issuance GmbH is not responsible for the content of any websites reached by means of such a link.

Cookies

ETC Issuance GmbH may collect data about your computer, including, where available, your IP address, operating system and browser type, for improvements to the website, system administration and other similar purposes. These are statistical data about users' browsing actions and patterns, and they do not identify any individual user of the website. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By agreeing to the cookie notice below you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps ETC Issuance GmbH to provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of this website without them.

Governing Law and Jurisdiction

ETC Issuance GmbH is a subsidiary of ETC Management Ltd, company number 12165332, with registered office at Gridiron, One Pancras Square, London, England, N1C 4AG. These Terms and Conditions and your access to and use of this website and the content are subject to the laws of England and Wales.

We use cookies to improve your overall experience on our site, and to generally improve our website. Accept to continue your visit to our site.

To find out more, read our Privacy Policy

Besteuerung - Unverbindliche Information