Author: Stephanie Bedard-Chateauneuf

Cryptocurrency exchange Binance finds itself entangled in a fresh legal battle as a new class-action lawsuit unfolds in Canada. Plaintiffs allege that Binance has run afoul of local securities regulations.

The Ontario Superior Court of Justice has initiated a certification motion for a class-action lawsuit against Binance. The core accusation revolves around the sale of crypto derivative products to retail investors without proper registration, according to the plaintiffs.

The lawsuit is seeking damages and the rescission of illicit derivative trades. Plaintiffs argue that tens of thousands of Canadian users engaged in Binance’s cryptocurrency derivatives offerings through its platform.

Further complicating matters, the Philippines Securities and Exchange Commission (SEC) has directed both Google and Apple to remove the Binance app from their respective app stores for users in the Philippines.

Emilio Aquino, chair of the SEC, emphasized that selling or offering unregistered securities to locals and operating as an unregistered broker breaches the country’s securities regulations. Removing Binance’s applications from digital app marketplaces, according to Aquino, is crucial to curb the proliferation of its illicit activities in the Philippines, which could otherwise have detrimental effects on the local economy.

Meanwhile, in the United States, prosecutors have recommended a 36-month prison sentence for Binance founder Changpeng “CZ” Zhao. This recommendation comes after Zhao pleaded guilty to charges related to money laundering.

In their filing to the U.S. District Court for the Western District of Washington, prosecutors underscored the gravity of Zhao’s deliberate violation of U.S. law and its repercussions. They argue that the proposed 36-month sentence, coupled with a $50 million fine, strikes an appropriate balance in addressing the pertinent legal factors and achieving the objectives of sentencing.

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Amidst a broader market crash, Ethereum experiences a 2.50% decline, fueling concerns of a potential drop to $3,000. Despite this setback, some investors maintain optimism for long-term gains, pointing to the possibility of a bullish trend triggered by Bitcoin Halving. However, ETH faces resistance even as it finds support at $2,850, with conflicting signals from technical indicators adding to market uncertainty.

Ethereum, the leading altcoin by market capitalization, has not escaped the recent market downturn, witnessing a 2.50% decline in price. Worries about a potential descent to $3,000 have emerged following this setback and amid broader concerns of a significant market correction.

Nevertheless, despite the current downturn, certain investors remain hopeful about Ethereum’s long-term trajectory. The historical precedent of Bitcoin Halving sparking an altcoin season hints at the potential for a future uptrend.

With a market capitalization of $382 billion, Ethereum has experienced an 18% drop over recent weeks. However, the ETH price has found support around the 50% Fibonacci level, approximately $2,850.

The consolidation on the weekly chart between the 50% and 61.80% Fibonacci levels has been prolonged by the latest downturn. The smaller rejection from the 50% Fib level suggests a possible bullish breakout, potentially leading to sustained levels above $3,000.

Can Ethereum Regain Momentum?

At its current trading price of $3,140, Ethereum displays an intraday Doji candle, highlighting the altcoin’s volatile nature. The resumption of an upward trend for Ethereum may occur if the market manages to avoid further losses.

Technical indicators offer a mixed outlook for Ethereum. The bearish crossover in the MACD and signal lines on the weekly chart reflects the recent pullback phase. However, a rebound from the 50% Fib level in ETH price could reignite positive momentum.

A potential breakout above the $3,265 resistance level may signal an entry opportunity for a bull run continuation. Such a scenario could test the formidable $4,000 resistance level, potentially resulting in a 25% increase.

However, while the likelihood of a drop to $3,000 remains minimal, it still concerns investors amidst the current market conditions. The prevailing uncertainty prompts investors to carefully evaluate the potential outcomes for Ethereum’s price movement.

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Industry insiders anticipate the Securities and Exchange Commission (SEC) will reject proposals for exchange-traded funds (ETFs) linked to the price of ether in the coming month, according to sources familiar with the matter.

Several firms, including VanEck and ARK Investment Management, have submitted applications to the SEC seeking approval for ETFs that would mirror the spot price movements of ether, the second-largest cryptocurrency by market capitalization. The SEC is slated to make decisions on VanEck’s and ARK’s applications by May 23 and May 24, respectively.

Meetings between these firms and the SEC in recent weeks have reportedly been disheartening, with agency staff offering little insight into the concerns surrounding the proposed ETFs. This stands in stark contrast to the extensive deliberations that preceded the approval of bitcoin-based ETFs earlier this year.

Led by crypto skeptic Gary Gensler, the SEC had historically rejected bitcoin ETFs due to concerns over market manipulation. However, pressure mounted after Grayscale Investments successfully challenged the SEC’s stance in court, leading to the recent approval of spot bitcoin ETFs. Despite arguments from ETF issuers citing precedents set by bitcoin ETFs and ether futures-based ETFs approved last year, the SEC appears poised to deny the current filings, signaling a setback for the cryptocurrency industry.

While some issuers intend to submit additional documentation to the SEC to prolong discussions, expectations of a rejection have already impacted ether’s price. Although the cryptocurrency has seen a modest increase in value this year, it has lagged behind bitcoin, which reached new all-time highs recently.

The SEC’s scrutiny of ether ETFs has been limited thus far, with only a few meetings reported, including one with crypto exchange Coinbase. Coinbase argued that the rationale behind approving bitcoin ETFs should extend to ether products, given the correlation between ether futures and the spot market.

If the SEC rejects the ether ETFs, it may be due to concerns regarding the availability and reliability of statistical data on the ether market. Some observers speculate that the SEC may require more time to assess the impact of ether futures trading before greenlighting spot ETFs.

Despite the anticipated rejection, some industry insiders believe that legal challenges could eventually pave the way for ether ETFs. However, for now, the prospect of approval remains uncertain, leaving the cryptocurrency market in a state of flux.

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Bitwise Chief Investment Officer Matt Hougan recently shared insights in an investor note, envisioning a significant drop of 50% in Bitcoin’s volatility alongside increasing institutional involvement leading up to the 2028 halving.

Hougan’s analysis points to Bitcoin’s historical patterns, notably its surge to a new all-time high just weeks before the 2024 halving. He anticipates this trend to persist post-halving, propelling Bitcoin’s value upward, much like its ascent from a modest $13 valuation during its initial halving in 2012.

Reaffirming previous forecasts, Hougan remains confident in Bitcoin’s trajectory toward a $250,000 valuation in the years ahead.

He attributes this sustained growth to Bitcoin’s growing recognition within the financial landscape, particularly following the debut of spot Bitcoin ETFs, which have witnessed remarkable performance since their launch.

Institutional Impact

Highlighting the transformative effect of spot Bitcoin ETFs, Hougan underscores their role in attracting a fresh wave of institutional investors. These entities, including financial advisors and large financial institutions, are known for their disciplined approach to trading, which contrasts with the speculative behavior of retail investors that has historically characterized Bitcoin markets.

Hougan predicts that the influx of institutional capital through Bitcoin ETFs will contribute significantly to the projected 50% reduction in Bitcoin’s volatility by the next halving.

He envisions a future where Bitcoin becomes a standard component in diversified investment portfolios, potentially constituting 5% or more of allocations. This projection reflects a growing confidence in Bitcoin’s maturation and reduced price fluctuations.

$200 Billion AUM

Hougan anticipates that institutional investments in Bitcoin ETFs could surpass $200 billion, driven by increased market accessibility and deeper financial integration. This influx of capital is expected to enhance market stability and cement Bitcoin’s status as a mainstream financial asset.

While acknowledging the inherent risks associated with cryptocurrency investments, including market volatility and regulatory uncertainties, Hougan paints a picture of a future where Bitcoin achieves widespread institutional adoption and emerges as a staple in investment portfolios, fundamentally reshaping market dynamics by the 2028 halving.

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Hong Kong is gearing up to debut its spot bitcoin and ether exchange traded funds (ETFs) on April 30, as announced by three asset managers on Wednesday.

This move positions Hong Kong as a trailblazer in Asia, becoming the first in the region to embrace cryptocurrency products as mainstream investment tools. The regulatory green light from the Securities and Futures Commission, as indicated on the Hong Kong markets watchdog’s website, underscores the city’s commitment to fostering a conducive environment for digital asset investment.

While mainland China maintains a ban on cryptocurrency, Hong Kong is actively positioning itself as a global digital asset hub, a strategic move aimed at enhancing its status as a financial epicenter. Over the past decade, Hong Kong has seen the presence of several leading international crypto exchanges and funds, although regulatory requirements have sometimes led to fluctuations in their operations.

The approval of these new products in Hong Kong follows closely on the heels of the United States’ introduction of its inaugural ETFs tracking spot bitcoin just three months ago. The U.S. ETFs have already witnessed significant traction, with approximately $12 billion in net inflows, contributing to a notable surge in bitcoin’s value earlier this year.crypto 

China Asset Management, Harvest Fund Management, and Bosera Asset Management, alongside local cryptocurrency firm Hashkey, are spearheading the launch of these ETFs in Hong Kong, with a target date of April 30. Against the backdrop of bitcoin’s impressive 50% year-to-date appreciation and its record-breaking high of $73,803 in March, the cryptocurrency was trading around $65,000 on Wednesday.

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