Crypto Market Analysis: October 4, 2021

Cryptoasset prices struggled to the end of September, failing to make gains for the majority of the month, or even hold ground in some cases.

However, major cryptoassets rebounded over the weekend on the back of positive comments from the SEC’s Gary Gensler.

Bitcoin had a strong week, despite falling to below $42,000 at the end of September. October’s arrival saw the cryptoasset jump in price over the weekend. It is now trading just below $48,000.

Ether likewise saw a start of October rally, having traded down to $2,800 at the end of last month. ETH jumped over the weekend, trading upwards and now around $3,350.

SEC head calls for cryptoasset consumer protection…but then reiterates support for ETFs linked to crypto

Gary Gensler has said that investors in crypto products deserve the same protections and safeguards against fraud and manipulation as bank depositors or purchasers of insurance policies.

The SEC boss acknowledged that the size of the crypto space now meant that it was time for investors to be covered in the same way as if they were investing in a more traditional asset such as a mutual fund. His comments were specifically regarding investors wanting returns from their assets on an annual basis.

However, despite heeding warnings, he did once again reiterate his support for exchange-traded funds (ETFs) on futures linked to the top cryptocurrency by market value, leading to speculation that the US might approve the vehicle.

Gensler singled out bitcoin ETFs in particular, which invest in futures contracts that trade on the Chicago Mercantile Exchange, having made similar comments in August also. Whatever the outcome, bitcoin bounced on the news of his comments, leading to renewed optimism.

Crypto is not “the second coming of the messiah” – Musk

Elon Musk has again put forward his views on crypto, telling US regulators to “do nothing”. His comments referred to his belief that possible government action could “slow down [crypto and bitcoin’s] advancement”.

An advocate of “letting it fly”, he hopes cryptoassets will eventually help reduce the errors and latency in legacy monetary systems.

Unlike previous comments, his views did not seem to impact price action dramatically, but considering regulation is such a hot topic at the moment, don’t be surprised if we see more and more comments weighing in on the space as it continues to capture public interest.

First crypto investment fund approved in Switzerland

Switzerland has broken new ground following the Swiss financial regulator issuing approvals for a domestic cryptoasset investment fund and a domestic digital asset custody service last week.

Just days after China’s central bank commented that bitcoin and other financial blockchains were a threat to economic stability, FINMA formally approved the first investment fund of its kind in Switzerland, in order to “facilitate serious innovation…in a consistently technology-neutral way”.

The new Crypto Market Index Fund will be open to “qualified investors”, enabling investment into cryptoassets with a “sufficiently large trading volume”.

Considering Switzerland has one of the largest banking sectors in the world and accounts for an estimated 25% of global cross border asset management, the chance for investors to gain additional exposure to cryptoassets could be exciting for the space.

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