News Updates September 07, 2022

1. S.Korea to set up securities market for crypto tokens

South Korea’s top financial regulator announced Tuesday a plan to open a separate digital securities market similar to the KOSPI (Korea Composite Stock Price Index), in a move to institutionalize and promote cryptocurrencies.

* The planned digital securities market will accommodate securities tokens, representing ownership rights or asset value using blockchain technology. However, the tokens will be required to be registered in the format of electronic securities.

* The Financial Services Commission (FSC) plans to have the Korea Exchange (KRX) operate the digital securities market, and have security companies broker the trades. 

* The proposal calls for the Korea Securities Depository to examine and register the listing of security tokens applied by the issuer or through a brokerage. The depository will also manage the total volume of listed tokens.

* For investor protection purposes, tokens will be distributed in the same method as existing securities. It will also allow over-the-counter transactions on a limited scale during the early stages of the market. 

* Earlier this year, President Yoon Suk-yeol’s administration announced that it will push to allow initial coin offerings (ICOs) and security token offerings (STOs).

  • Major securities companies in South Korea, including NH, KB and Shinhan, are each reportedly looking to establish digital asset exchanges in the first half of 2023.

2. Bitcoin Is on Verge of Further Downfall, But S&P 500 May Save It

Fear on the downside of the stock market forced Bitcoin to choose a downward direction last night. Nevertheless, there is still enough room for rather good news, because the most important index of the American stock market, the S&P 500, is still above $3,900, despite the fact that at the moment it has reached $3,883. As for now, the stock index of the world's largest companies is at a crossroads.

The growth scenario is possible under the conditions of an urgent launch of the Fed's "money printer." But here again, the accomplishment of important macro events will be needed, whether it is the beginning of a U.S.-China military conflict in the Pacific region or the emergence of a margin call of banks and systemically important companies.

 *Harsh reality for traditional and crypto markets*

Further declines are more likely due to fundamental factors. The Fed continues to belatedly fight inflation by raising its key rate and conducting tight monetary policy in general. There are fewer dollars in the system, and every participant in it suffers. Thus, total assets on the Fed's balance sheet fell by $64 billion in August.

In summary, the S&P 500 is poised to dip into the area around $2,700 unless the money printer starts up or something extraordinary happens on the global financial market. For Bitcoin, which has found local support around $18,500, this will mean further downfall, as for the crypto market in general.

3. Bitcoin Bets Look Bearish as Futures Trading Hits Record Level

The number of outstanding futures and perpetual contracts on bitcoin rises to a record, and traders are paying up to bet on further price declines – in a market that's already bearish.

Bitcoin's (BTC) futures market is now bigger than ever, and investors appear to be adding to bets on a continued price decline.
The bitcoin-denominated open interest (OI) in futures and perpetuals (futures with no expiry) tied to the largest cryptocurrency has risen to a new record high of 565,579 BTC ($10.6 billion), surpassing the previous peak of 548,096 BTC reached in February 2020, according to Arcane Research. The data covers positions on traditional commodities exchanges such as CME as well as crypto exchanges like Binance and Bybit.
Open interest refers to the number of contracts outstanding. While an uptick in open interest indicates an influx of money into the market, it doesn't provide much information about market positioning.

So traders often read open interest in conjunction with other metrics like futures basis – the difference between prices in futures and spot markets – and funding rates, which represents the cost of holding bullish or bearish positions. If the funding rates are negative, it means the market is leaning bearish.
The latter seems to be the case with bitcoin. "At the exchange level, open interest is always net neutral, but shorts [bearish trades] are definitely the aggressor now," Vetle Lunde, research analyst at Arcane, said.

4. India’s second-most populous state seeks to e-verify properties on the blockchain

The Indian state government of Maharashtra is taking steps to ensure the confidentiality of the data associated with newly purchased properties in order to foster consumer trust and increase the use of electronic registration of newly acquired real estate. 

Shravan Hardikar, the Inspector General of the Department of Registration and Stamps, said during a press conference that was conducted on Tuesday, September 7, in Mumbai that the department would employ blockchain technology to avoid the duplication of authentic agreement documents, the Economic Times reports.

5. Crypto Miner Bitdeer Delays $4B SPAC Deal Again

The SPAC taking crypto miner Bitdeer public at a $4 billion valuation has filed another extension, delaying the merger until December.

The SPAC firm taking cryptocurrency miner Bitdeer public at a $4 billion valuation has filed for another three-month extension.

The Blue Safari Group, a special purpose acquisition company, was supposed to merge with BitDeer by June 14 but filed an extension to push the deadline back to September 14. The combination was originally announced in November 2021

SPACs function as blank check companies. They’re set up and registered with the U.S. Securities and Exchange Commission (SEC) to raise capital and find a company to take public by acquisition or merger. These investment vehicles have become a popular way to take companies public because they bypass the longer process of an initial public offering, or IPO.

But the bear market has left many crypto firms waiting in the wings or worse.

Each delay has required a $575,000 cash infusion from Bitdeer. A press release filed with the SEC explains that "Bitdeer agreed to loan the Company [Blue Safari Group] an aggregate principal amount of $1.99 million in two tranches."

According to the terms, this second extension is the last that can be covered by the loan. It bears no interest and doesn't need to be repaid until the companies have completed their merger.

With its latest extension, Blue Safari Group will now have until December 14 to complete its combination with founder Jihan Wu’s Singapore-based mining firm Bitdeer.

6. FBI seeks Bitcoin wallet information of ransomware attackers
The FBI, along with two other federal agencies, CISA and MS-ISAC, asked U.S. citizens to report information that helps track the whereabouts of the hackers.

Three federal agencies in the United States — the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency and the Multi-State Information Sharing and Analysis Center — jointly issued an advisory seeking information to curb ransomware attacks. 

As part of the #StopRansomware campaign, the joint cybersecurity advisory alerted citizens of Vice Society, a ransomware-type program that encrypts data and demands ransom for decryption.

The trio anticipates a spike in ransomware attacks, primarily aimed at educational institutions, adding that “School districts with limited cybersecurity capabilities and constrained resources are often the most vulnerable.”

While proactive measures remain vital to counter ransomware, the FBI asked US citizens to report information that helps track the whereabouts of the hackers. Some key information the FBI seeks includes Bitcoin (BTC) wallet information, ransom notes and IP addresses linked to the attacker.

By using wallet addresses, authorities can backtrack illicit transactions on Bitcoin’s immutable blockchain without worrying about the trail going cold.

While Bitcoin enables frictionless cross-border transactions, most attackers prefer using fiat currencies to fund their illicit activities. It was also found that only 0.15% of activity on blockchains in 2021 was crime-related, which has been going down consistently year over year.

7. Bitcoin Drops to Historic Trendline but Bullish Signs Flash, Reversal Inbound? 

Bitcoin has been experiencing a prolonged bear market since the all-time high of $69K in November 2021. The past 24 hours have also proven to be quite a challenge for the cryptocurrency as it dropped below $19,000. Yet, the next few days or possibly weeks are likely to be critical for the mid-term future of BTC’s price.

The Weekly Chart
Historically, Bitcoin bear markets have concluded after participants underwent a phase of massive capitulation and distribution of their assets. Additionally, there is an ascending 9+ year trendline on BTC’s chart. This has always supported the price and marked the bear market bottoms.

As the following chart demonstrates, the price has declined to $18K. This level aligns with the above-mentioned support trendline, increasing the possibility of a trend reversal. 

Furthermore, the Weekly RSI indicator has dropped to the under-value range due to Bitcoin’s massive shakeout to the $20K region. It’s worth mentioning that bear markets have also typically ended when the Weekly RSI indicator entered this under-value territory.

Overall, if the price drops below the trendline, another decline could be imminent for Bitcoin towards lower price channels.

The 4-Hour Chart
On the 4-hour timeframe, after forming the same continuation correction pattern for the third time and consolidating inside, the price finally broke the lower threshold. This resulted in a massive decline to the $18K support level.

This is the most crucial level for the bulls to defend. If the bears successfully push the price below this critical level, another clash for power will likely occur.